From Capitol Hill in Washington, D.C., to the streets of San Francisco, the pros and cons of municipal wireless broadband networks have been debated during the past few years regarding their appropriate place in a free-market economy.
These oft-heated discussions have generated pockets of legislation aimed at preventing government entities from building networks that compete against private carriers in providing broadband access to consumers and businesses. Combined with other market forces, the result has been the evolution of business models in which government entities can reap the benefits of wireless broadband in their communities without having to risk public funds to deploy and maintain the networks.
Technically, these networks utilize a wide swath of radio frequencies — from 900 MHz to 5. 8 GHz — and an ever-expanding array of solutions — Wi-Fi, WiMAX and mesh technologies (see story on page 50), to name a few — to provide a variety of applications in their coverage areas. And each seems to be based on a different business model.
“I don’t think any of our deployments have been the same,” said Rick Rotondo, director of marketing for Motorola’s mesh-networks product group. “It’s definitely not a case of one size fits all.”
But these differences are trivial compared with the underlying theme: Momentum behind community-supported wireless broadband networks has reached unprecedented levels, with new deployments being announced on a weekly basis. As a result, the promise of affordable wireless broadband — for consumers, businesses and public safety — increasingly is becoming more a rule than an exception.
After the Sept. 11, 2001, terrorist attacks, many early municipal wireless networks were built primarily to serve the mobile data needs of public-safety entities and often were funded with the help of the Department of Homeland Security. For emergency-response groups accustomed to CDPD data rates of less than 10 kb/s, the ability to access information quickly changed the dynamics of day-to-day operations.
And the benefit was not just limited to public safety. Similar efficiencies could be gained in other areas of municipal government, such as public works and inspections.
In fact, city of New Orleans officials repeatedly have noted that the city’s recovery efforts in the aftermath of Hurricane Katrina have been helped immeasurably by the availability of Wi-Fi in the city. Not only was a Wi-Fi connection the first link to the outside world for the mayor after the hurricane and floods wiped out other forms of communications, but wireless broadband let city inspectors increase their workload from less than 40 inspections per day to as many as 500 per day after the hurricane.
But in the early days of wireless broadband, cost was a significant barrier to entry. Without large economies of scale to reduce costs, wireless network deployments were quite expensive at a time when many municipalities were strapped financially, as tax revenues slumped with the post-9/11 economy. As a result, many early deployments provided spotty coverage that had limited utility.
Meanwhile, the landscape for competitive wireline telephone carriers, or CLECs, was changing drastically. After the passage of the 1996 Telecom Act, the so-called Baby Bells were forced to let these upstarts use their networks at prices dictated by state regulators. In areas where competitors’ lobbying was successful, CLECs could provide high-speed Internet service to customers for much less than it would cost to build their own networks. (Many of them were ISPs that registered as CLECs and paid the accompanying fees to gain a regulatory advantage.)
But the FCC nixed this arrangement after incumbent wireline telephone carriers — primarily the Baby Bells — convinced federal officials that it discouraged them from investing in new technologies to improve their networks. With users demanding more than dial-up Internet access and having no regulatory protection in negotiations with incumbent providers, CLECs and ISPs both scrambled for a method to keep their customers in a broadband world.
For many, wireless broadband quickly became a logical choice, offering a way to provide broadband access to customers without the expensive proposition of having to dig trenches through neighborhoods. In addition, wireless solutions offer the ability to serve customers outside their homes in an increasingly mobile world.
“As we went through that process, we picked this solution and quickly realized this was much more than a third pipe to the home,” said Bill Tolpegin, vice president of development and planning for EarthLink’s municipal-networks division. “It was a naturally differentiated network from day one, so it’s going to be able to support a wide variety of other things besides just access. You start with access, but where you end up is much greater than just access.
“This is definitely a key initiative for EarthLink.”
This realization, combined with many government entities’ desire to close the “digital divide” in their communities by ensuring that all constituents would have affordable broadband access, has led to a deployment model that has swept the country, from Grand Haven, Mich., to large metropolitan areas like Philadelphia and San Francisco.
“The most common model we’ve seen — which we think is a win-win for the cities and EarthLink — is where a third party comes in and pays for the network and operates it on an open-access basis,” Tolpegin said. “What that really does is enable a wide range of applications. We’ll work on access, but … public-safety, utility and public-works applications can also work on these networks.”
For government entities, such an arrangement can relieve a number of pressure points previously associated with deploying a wireless network.
First, a commercial entity can deploy a network much more quickly than a municipality because it has greater expertise and does not need to engage in a prolonged public debate or public bidding process on the matter. Quicker deployments let the city’s residents enjoy the benefit of the network sooner, and local officials can cite broadband availability as they market the area in an attempt to drive economic development.
Second, having a third party build the network provides budget relief. Although the city may pay the third-party provider monthly fees for usage if it chooses to use the network, it is not saddled with the debt associated with a large capital expenditure or the ongoing costs associated with network maintenance, operation and customer support.
Third, there is no need to fear that federal or state legislation will be enacted that will undermine the network. Lobbyists for giant telecom and cable companies have long fought the provisioning of broadband access to the public by government entities, claiming that the government should not be competing with private, tax-paying companies for customers — particularly in an endeavor as risky as communications, an arena littered with economic failures by even the most high-profile businesses.
Impact on cities
On the surface, public-access broadband would not seem to have much to do with enterprise-level broadband deployments for businesses and municipalities, but industry experts note that they are related. Consumer-level broadband deployments help create the economies of scale needed to reduce prices associated with network equipment and access devices for enterprises. In addition, the existence of wireless broadband makes it more economical for investments to be made in fiber deployments used for backhaul.
“That’s the thing people tend to forget — yes, these are wireless networks, but you still have to get [signals] back to a wired network eventually,” said Stephen Rayment, chief technology officer and co-founder of BelAir Networks, which has made numerous municipal deployments.
With the third-party model, cities do not have the debt obligations associated with a network buildout, as the provider is responsible for those financial concerns. In most cases, the provider seeks a deal that lets it have access to key city infrastructure — notably, streetlights and tops of city buildings — upon which to locate network nodes and access points.
In return, cities are looking for a variety of things. Some want free or low-cost network access for municipal personnel, others want the provider to offer a low-cost or free access option to residents, while others simply opt to derive revenue from a lease arrangement.
In some smaller municipalities, a provider may want the city to subscribe as an “anchor tenant” to justify the economics of building out the network. In larger cities, that’s usually not the case, said Craig Newman, municipal wireless business development manager for Motorola’s Canopy group.
“Anchor tenancy is a ‘nice have’ but not a ‘must have’” to third-party providers focused more on reaching broadband customers, said Newman, who previously worked with EarthLink as it bid on various municipal broadband projects.
In fact, city involvement is not even a necessity, as Internet Service Provider Softcom has demonstrated in Galt, Calif. Instead of locating network equipment on streetlights that had differing levels of support and power, Softcom asked residents if they would be willing to host the equipment in their homes in return for getting high-speed wireless access — 4 MB/s downlink and 2 MB/s uplink — for $14.95 per month.
The response was “much more successful than I ever could have imagined,” Softcom CEO Kevin Triplett said.
Triplett said the response was great enough that Softcom was able to locate its equipment in ideal locations at about $10 per month per house. Combined with a base station node located on a city water tower, the network is working as planned.
Some providers might be afraid that the equipment would be in jeopardy when a house is sold, but Triplett said real estate agents actually are featuring the low-cost Internet access as a selling point when marketing the homes.
“[The network nodes have] lovingly become known by different little names — ‘beer keg’ is one of the more popular ones,” Galt Mayor Darryl Clare said (see photo on page 94). “They’ve become bragging rights or a badge of courage for the people who have them.”
Clare said the city supports the Softcom venture. Although the city’s use of the network is limited at the moment, it likely will become a bigger customer in the future.
“The city clerk has already implemented using the Wi-Fi throughout city hall,” Clare said. “We’re running it parallel to our T-1 lines right now. Eventually, we’ll drop the T-1 lines and go exclusively to Softcom. It’s a substantial cost savings and gives us greater flexibility.”
This deployment will let city council members access municipal databases with their laptops during council meetings, among other benefits, Clare said. Meanwhile, the city is considering using the Softcom network as a data link for its first responders, which currently don’t have a wireless data service, he said.
Evolution just beginning
The Galt deployment is a typical example of the way municipalities enter the wireless broadband world. Many begin the venture looking to satisfy one need only to realize an endless possibility of applications are available once a broadband network is in place.
In addition to public-safety and public-access applications, cities and utilities are discovering they can use the networks to remotely read meters and support computer programs in public schools. Similarly, providers are getting increasingly creative, with many offering free access to residents willing to look at localized advertisements over their Web browsers.
“It’s kind of like your free weekly community newspaper,” said Chuck Haas, CEO of MetroFi, which is offering free service to those willing to look at ads or an ad-free service for $19.95 per month.
This model also is being used by Azulstar in Rio Rancho, N.M., and has been proposed by a Google/EarthLink joint bid in San Francisco (see story on page 14). Given the number of free Internet providers that went out of business in the late 1990s, many wonder whether advertising revenue alone is enough to make third-party ventures feasible.
“Google is probably the only company that has a chance to do that in way that will work,” Softcom’s Triplett said.
Cities likely will try to insulate themselves from the provider’s financial health by seeking irrefutable rights of use that ensure prioritization for municipal traffic during times of heavy use, as well as benchmark service levels, said Bert Williams, senior director of marketing for Tropos.
In some cases, cities wanting to maintain control over their network will ask the provider to dedicate a virtual network to the municipality. Other times, hardware could be dedicated.
For example, a provider could control the 2.4 GHz radio in a MotoMesh deployment for public access while letting the municipality use the other 2.4 GHz radio and the 4.9 GHz radios for its own use, said Motorola’s Rotondo. Because all these radios are in a single MotoMesh node, the provider and city could reach an arrangement to share the cost of the single deployment that creates multiple networks.
“Those discussions are, in fact, happening,” Rotondo said. “It’s coming.”
And although the economic justification for each of these municipal networks seems to be different today, Rotondo said he foresees an increasing uniformity in their applications over time.
“We think the business models are going to shake out over time and that these networks are going to start to look similar,” he said. “They may start off different, but we think they will converge to the same place.”
Key applications for community wireless broadband networks
Can be used to help address the “digital divide” within a community
Lets officers receive updates and file reports from vehicles instead of losing time on the street
Lets inspectors be more efficient by processing applications in the field
City administration data:
Gives elected officials and staff a way to quickly access city information
Can support video monitoring from fixed and mobile cameras
Can eliminate the need for truck rolls to gather utility billing information
Method for high-speed access in schools and libraries