And Lompoc isn't alone. Across the United States, many cities are
finding their Wi-Fi projects costing more and drawing less interest
than expected, leading to worries that a number will fail, resulting
in millions of dollars in wasted tax dollars or grants when there
had been roads to build and crime to fight.
More than $230 million
was spent in the United States last year, and the industry online
projects $460 million will be spent in 2007.
Without revenues they had counted on to offset that spending,
elected officials might have to break promises or find money in
already-tight budgets to subsidize the systems for the low-income
families and city workers who depend on the access. Cities might end
up running the systems if companies abandon networks they had built.
The worries come as big cities like Philadelphia and Portland,
Ore., complete pilots and expand their much-hyped networks.
"They are the monorails of this decade: the wrong technology,
totally overpromised and completely undelivered," said Anthony
Townsend, research director at the Institute for the Future, a think
Municipal Wi-Fi projects use the same technology behind wireless
access in coffee shops, airports and home networks. Hundreds or
thousands of antennas are installed atop street lamps and other
fixtures. Laptops and other devices have Wi-Fi cards that relay data
to the Internet through those antennas, using open, unregulated
broadcast frequencies. In theory, one could check e-mail and surf
the Web from anywhere.
About 175 U.S. cities or regions have citywide or partial
systems, and a similar number plan them, according to Esme Vos,
founder of MuniWireless.
Rhode Island has proposed a statewide network, while one in
California would span dozens of Silicon Valley municipalities. San
Francisco, Los Angeles, Chicago and Atlanta also want one.
Because systems are just coming online, it's premature to say how
many or which ones will fail under current operating plans, but the
early signs are troubling.
"I will be surprised if the majority of these are successful and
they do not prove to be drains on taxpayers' money," said Michael
Balhoff, former telecom equity analyst with Legg Mason Inc. "The
government is getting into hotly contested services."
Most communities, including Lompoc, paid for their projects.
Elsewhere, private companies agreed to absorb costs for the chance
to sell services or ads.
The vendors remain confident despite technical and other
problems. Chuck Haas, MetroFi Inc.'s chief executive, said Wi-Fi
networks are far cheaper to build than cable and DSL, which is
broadband over phone lines.
Demand could grow once more cell phones can make Wi-Fi calls and
as city workers improve productivity by reading electric meters
remotely, for instance.
Balhoff, however, believes the successful projects are most
likely to be in remote places that traditional service providers
skip -- and fewer and fewer of those areas exist. Cities, he said,
should focus on incentives to draw providers.
In Lompoc's case, officials say construction was delayed about a
year once they realized wireless antennas had to be packed more
closely together. Then the city learned that its stucco homes have a
wire mesh that blocks signals, making Internet service poor or
nonexistent indoors without extra equipment.
But more importantly, just as Lompoc committed to the network,
cable and telephone companies arrived with better equipment and
service, undercutting the city's offerings.
"It seemed like we announced we were going to do this and that
and the next day we got trucks from the providers doing this and
that, when we've been asking for years and nothing ever happened,"
Lompoc Mayor Dick DeWees said.
D.A. Taylor, who runs a software business from her home, said
Lompoc's Wi-Fi service lacks key features she gets through DSL.
"It's a really great idea, but they didn't spend a lot of time
thinking who their target market was," Taylor said.
DeWees acknowledged that Lompoc might have to pull the plug if it
cannot boost subscriptions, but he said the city still has an
aggressive marketing push in store. Lompoc recently slashed prices
by $9, to $16 a month, for the main household plan.
Just a few years ago, these municipal wireless projects seemed
[to top of second column]
Politicians got to tout Internet access for city workers and poorer
households -- many programs include giveaways for lower-income
families. Some cities bear no upfront costs when a company pays for
construction in exchange for rights to use fixtures like lamp poles.
Vendors like EarthLink Inc. saw a chance to offset declines in
dial-up subscriptions. MetroFi, offering free service, got to join
the burgeoning market for online advertising. Google Inc. also is
jumping in for the ads, partnering with EarthLink in San Francisco,
although the city's Board of Supervisors is resisting their joint
As projects get deployed, both sides are seeing chinks in their
Many cities and vendors underestimated the number of wireless
antennas needed. MobilePro Corp.'s Kite Networks wound up tripling
the access points in Tempe, Ariz., adding roughly $1 million, or
more than doubling the costs.
"The industry is really in its infancy, and what works on paper
doesn't work that same way once you get into the real world," said
Jerry Sullivan, Kite's chief executive.
Networks like St. Cloud, Fla., and Portland, meanwhile, shared
Lompoc's difficulties penetrating building walls, requiring indoor
users to buy signal boosters for as much as $150. And when it works,
service can be slower than cable and DSL.
"There's an antenna literally at the curb of my house, but when
I've tried to log on, it cuts in and out," said Landon Dirgo, who
runs a computer repair shop in Lompoc.
One recent sunny afternoon in Portland, few could be found
surfing the Internet from the city's downtown parks.
Mari Borden, a student at Portland State, said she couldn't
connect to MetroFi's free network from several locations, even
though her computer could detect a signal (MetroFi officials say
users might need stronger wireless cards to send back a signal).
The vendors insist they have been upfront with customers about
limitations. But MetroFi's Adrian van Haaften said managing
expectations can be challenging.
EarthLink said it has 2,000 customers in four markets -- New
Orleans; Milpitas and Anaheim, Calif.; and Philadelphia -- paying
$22 or less a month. MetroFi said it had 8,000 free users in
Portland in April, averaging 10 hours online; the city says about
1,000 use the network on any given day.
Although both companies say their numbers are good given that
their networks aren't fully built yet, they also are realigning
MetroFi will insist that future contracts commit cities to spend
a specific amount for public safety and other municipal
applications. EarthLink, which recently suspended new bids while it
focuses on existing projects, said it would likely seek minimums,
Glenn Fleishman, editor of the Wi-Fi Networking News site, said
vendors could no longer afford to treat projects as test beds and
loss leaders for winning publicity and new business.
Municipalities, meanwhile, are becoming more cautious. Applying
lessons from other municipalities, Boston plans to raise money
upfront from local groups and businesses and avoid tax dollars or a
Competition and expectations will only increase as DSL and cable
modems get faster.
Users today are struggling with e-mail and the Web over some
wireless systems, yet video and online games will require even more
"Most people, if they are going to do serious work, aren't looking
to be sitting in a park," said Eric Rabe, a spokesman for DSL
provider Verizon Communications Inc. "They want to be at a desk
where they have their papers or business records."
Lompoc's backers, though, still claim success, "even if the whole
network were to be written off tomorrow," said Mark McKibben,
Lompoc's former wireless consultant.
"Prices dropped and quality of service went up," he said. "That's
the way a lot of cities look at it. They don't look at business
profits and losses. They see it as a driver for quality of life."
from file received from AP
Digital; article by Anick Jesdanun, AP Internet writer]