Wi-Fi wonderland: debatable point: should cities or companies provide service?

GOOGLE Inc. has offered to wire up San Francisco for wireless broadband access, for free. Philadelphia is embarking on a citywide Wi-Fi plan, to be built by EarthLink Inc., which would charge users about $20 per month. And the City of Long Beach opened up bidding for a Wi-Fi project.

The idea of having citywide access to the Internet has pitted telecom and cable companies against Internet companies, and is energizing lobbyists and community groups all over the nation. In weighing the pros and cons of launching municipal Wi-Fi (short for Wireless Fidelity), a central question has emerged: Has broadband access achieved public utility status-like water, electricity or gas--that a city should be obligated to provide?

Background

A blanket of wireless access would take the current hotspots--an Internet cafe, for example--and extend them throughout a city. Parks, street comers, buses, restaurants, libraries and office buildings would all be covered within the scope of a wireless signal.

Hotspots exist within the radius of a Wi-Fi antenna, often called a hub. To cover an entire city, thousands of antennas must be placed on rooftops and light poles. The antennae need electricity, and eventually the signals connect to a fiber line that offers broadband access.

Reacting to complaints that telecom and cable companies are not adequately providing affordable broadband access, officials in some cities are in a rush to get wired. Philadelphia's mayor announced his "Wireless Philadelphia" initiative last year, aimed at improving opportunities in the cities' urban areas and offering access to low-income residents. EarthLink is paying for Philadelphia's Wi-Fi deployment, estimated at between $10 million and $16 million.

Wireless efforts in L.A. got a jumpstart under former Mayor James Hahn, with a panel to study the feasibility of "unwiring" the city. So far, Pershing Square has free wireless access, but the rest of the city is a patchwork of hundreds of access points; some are free, some require an account with a network.

Local companies involved in the Wi-Fi explosion include Santa Monica-based Boingo Wireless Inc., a leading Wi-Fi "hotspot" network with more than 20,000 Internet cafes and airports in its network. Though headquartered in Atlanta, EarthLink's municipal broadband team works out of its Pasadena office, and Marina del Rey-based 5G Wireless Inc. deploys Wi-Fi networks at college campuses and small municipalities nationwide.

Pros--Attracts Businesses, Residents

Average broadband prices are running more than $30 a month and the U.S. ranks behind the United Kingdom and South Korea in Internet penetration, according to a recent survey--two good reasons, proponents argue, for providing a new way to deliver broadband.

"There's a need for more broadband, so community networks are a great way ,of using new Wi-Fi technology to do it," said David Hagan, chief executive of Boingo Wireless.

City officials see Wi-Fi networks as a way to attract businesses and residents, but there are also municipal functions. "In most cities, 50 percent of the public work force is mobile," said Craig Newman, director of municipal broadband for EarthLink. "If you're a fireman, you could have the fastest mobile network available to download the plan of the building you're about to walk into."

Municipal proposals in the works involve private-public partnerships, where a private company offers to fund the deployment of the network and the city offers to lease space on light poles and fiber lines. In some cases, cities are offering to subsidize service. "We've done our homework," said EarthLink's Newman. "We're fairly confident about the cost of these networks."

Community groups see citywide Wi-Fi as a way of bridging the "digital divide" between poor and wealthy communities. Being a wireless hub could also attract new businesses and fuel growth.

Cons--Usurping the Marketplace

Critics claim citywide Wi-Fi will be a lot more complicated--and expensive--than people may think.

"Google did a nice job of stealing headlines by saying they'll do it for free, but I don't think that was San Francisco's intent," said Hagan, referring to Mayor Gavin Newsome's pledge to blanket the city with broadband access. "These networks are not free to build--they're cheaper than building a traditional in-ground network, but they're not free."

Verizon Communications Inc., Sprint PCS Group, SBC Communications Inc. and Comcast Corp. have been lobbying to stop municipal deployment of Wi-Fi networks for both competitive and logistical reasons. Wi-Fi operates on an unlicensed spectrum, so deploying a citywide blanket could interfere with existing wireless customers. "It could either make it so that your service works slower, or you don't get service at all," said Phil Redman, an analyst with research finn Gartner Inc.

Hidden and operational costs are also an issue. "It's going to cost more than they expect it to, and it's not going to work as well as they expect it to," Redman said.

Even if a private company absorbs the cost of building the network, maintenance and overrun costs will likely be absorbed by the city--not EarthLink or Google. "EarthLink isn't just doing this out of the kindness of their hearts--they want to make money," Redman said. "So now the city's getting involved with a company that's trying to make a profit? I thought cities were non-profit."

There's something else: EarthLink is an Internet service provider--not a wireless provider--so despite its eagerness to launch Wi-Fi networks all over the place, that has not been its core competency. Same goes for Google. "Even specialized Wi-Fi services, like T-mobile, are struggling--and wireless is what they do," Redman said.

Outlook

The costs and capabilities of wiring a city for public broadband access are central to the current debate. And that leaves the prospect of citywide access up in the air.

"This is new technology for a lot of people. You have to educate them at every step," said Carl Weisman, vice president of engineering at 5G Wireless. Setting up these networks will take months, if not years, with a business model still being formed.

And providing cheap broadband access is just one piece of citywide Wi-Fi, Hagan points out. "Having the broadband connection doesn't do anything unless you have a device to connect to it," he said. "What's the plan for PCs? You don't hear much about that."