• 10/30/2009
    1:45 PM
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Metro Wi-Fi: RIP?

Rapid technology evolution and economies of scale argue against municipalities as wireless service providers. As for metro Wi-Fi, I think the future is clear. It's the wrong technology for the job.
There's nobody I know who's done a better job of tracking the metro Wi-Fi market than Glenn Fleishman, whose Wi-Fi Net News web site is a great destination for people interested in wireless news analysis. That doesn't mean I've always agreed with Glenn, especially at the intersection of wireless technology and public policy.

Back in February, 2005, Glenn blogged about a point-counterpoint article I wrote along with David Haskin, whose Mobile Pipeline website was a venue for some of my writing. The topic was municipal broadband and the role that metropolitan Wi-Fi networks were playing. At the time, I was arguing that most metro Wi-Fi projects were ill-conceived and unlikely to succeed. Because incumbent service providers were making similar arguments (but for different reasons), I was accused by some of being a shill for entrenched interests. I even received e-mails suggesting that I was being paid by one of these companies to write my columns. Rest assured, the only financial transactions that have ever taken place between myself and a service provider is when I pay my bill.

Unlike some analysts who opposed metro Wi-Fi based on arguments that it was unfair for government to compete with the private sector (the arguments were similar to those currently being waged about the public option in healthcare reform), my primary argument against these systems was based on the limitations of the technology and the lack of viable business models. Wi-Fi is fundamentally a small-cell LAN technology. While it is technically possible to build metro-scale Wi-Fi networks, it's not easy to do, requiring much greater cell density than traditional cellular systems or emerging 4G systems, especially if indoor coverage is a goal.

Greater cell density translates into higher costs, both for build-out of the network and also for backhaul services from the Wi-Fi mesh nodes to the Internet. And since Wi-Fi uses unlicensed spectrum, it is virtually impossible to offer reasonable service guarantees, especially in densely populated areas supporting thousands of private Wi-Fi networks. The clincher lies in the fact that most people equate Wi-Fi with "free," so even if these companies were able to build out a reliable network, people aren't willing to pay for it.

Glenn continues to write about metro Wi-Fi companies abandoning the business and networks being shut down. Last week, he chronicled the adventures of Longmont Colorado, analyzing a recent article by Craig Settles, founder and president of successful.com and a long-time proponent of metro Wi-Fi. Longmont found itself the owner of an orphaned metro Wi-Fi network when its business partner Kite Networks went belly-up. Now Longmont has to decide what to do with it. I have a suggestion: cut your losses and sell the equipment on eBay. Continuing to invest in this kind of network is highly unlikely to benefit the citizens of Longmont. Truth be told, based on personal experience, I have my reservations about the ability of municipal governments to run customer-facing broadband networks, but even if the network civil servants of Longmont are special, it's still the wrong technology.
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