It's The Unintended Benefits Of Muni WiFi That Are The Profitable Ones

from the lets-hear-it-for-unforeseen-effects dept

Critics of municipal WiFi networks -- often incumbent broadband providers' hired guns -- like to trot out the argument that the networks can't be profitable as ISPs, and therefore shouldn't bother with building or supporting their networks. The problem with this argument is that it ignores all the other applications such networks can offer cities and focuses solely on the ISP element. Public internet access often isn't the main motivation behind the network, but rather an added benefit to the internal applications for which a city uses a wireless network -- and those applications can reduce costs for the localities in other areas, making the threshold for profitability less severe and less important. Case in point is the newly announced plans for a network in Burleson, Texas, a small town outside Ft. Worth: and it's chosen Chevron's Energy Solutions unit as its partner. That may sound like an odd choice, but it highlights the primary functions of the network are applications like automated meter-reading, maintenance and monitoring, with the sale of public internet access secondary. These sorts of unintended benefits popped up when offices installed WiFi networks and quickly found that they could offer a lot more than simply the elimination of ethernet cables. Cities and muni-network vendors are likewise realizing there's more to offer than citywide internet service, and these side benefits can make muni WiFi worth the investment for local governments -- and make profitability much easier.


Reader Comments (rss)

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  1.  
    identicon
    Louis J. Guertin, Mar 29th, 2006 @ 11:36am

    If a government entity wants to install a wi-fi network for its own use, no problem. I strongly believe that NO government entity should provide a service that competes anything provided by the private sector. In my case that covers wi-fi services, municipal liquor stores, health club facilities, golf courses, ski areas etc. The list is a long one. And I have a wi-fi LAN, drink socially, exercise, belong to a golf club, used to be a skier and I mountain bike.

     

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  2.  
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    Karl, Mar 29th, 2006 @ 12:30pm

    But...

    "If a government entity wants to install a wi-fi network for its own use, no problem. I strongly believe that NO government entity should provide a service that competes anything provided by the private sector."

    The solution should not be to ban them because of some over-arching philosophical fear that private industry will be crushed by "Uncle Sam ISP".

    If residents of such a town vote for such a project, even if they want to use taxpayer funds, it should be up to that town to decide.

    There are endless instances of neighborhoods private enterprise deems unprofitable to serve. Yet private enterprise wants to pass laws banning those towns from serving themselves.

    There is a massive disconnect there that is not solved by philosophical free-market fans judging what is, or is not, in a community's best interest (particularly if they don't live there).

     

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  3.  
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    anonymous coward, Mar 29th, 2006 @ 12:42pm

    chevron running a muni wifi network? how much did they have to donate to the mayor's re-election fund and how many of the mayor's relatives did they have to hire to get that?

     

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  4.  
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    KAB, Mar 29th, 2006 @ 1:04pm

    umm

    If a government entity wants to install a wi-fi network for its own use, no problem. I strongly believe that NO government entity should provide a service that competes anything provided by the private sector."

    Darn... government providing bridges and roads they are competing with my private river crossing and streets. If it weren't for them I'd still be charging folks to cross the river and drive on dirt roads. Their paved roads put me out of business.

    Maybe they Telcos wouldn't be so scared if their product was worth the price they charge. It's their loss for not getting in on the bottom of Muni Wifi.

     

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  5.  
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    greg, Mar 29th, 2006 @ 1:17pm

    crazy

    From my experience as an IT employee for a small city I have found that there are two states of mind involved with a municipal WiFi.

    One is the public wants WiFI because they think the will get free internet access.
    Two, is the non-tech heads of the city think they are going to make a bunch of money from providing WIFI.

    Unfortunately you can't achieve both very easily. Both these ideas are based on one major misconception and that is that WIFI is cheap and easy to install. They seem to think you can magically through up a bunch of antennas and suddenly you have free internet. Let me just say this once and very clearly. WIFI is expensive! the equipment is not cheap and can be very finicky. There are all kinds of implementation issues concerning radio interference and I'm not going to even get in to regular maintenance not to mention you need to pay for some kind of high bandwidth service for all those connections. In the end my questions are, why should the public expect free internet at a great cost to the tax payers? Two, if it isn't going to be for free who the hell is going to pay 10$ - 20$ for a local low bandwidth internet access when you can get a sprint or Verizon card for $50 and go anywhere in the country with it. Personally I think these cities are going to loose there shirts and eventually pass it off to private industry when it becomes and expensive dismal failure.

     

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  6.  
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    Wizard Prang, Mar 29th, 2006 @ 1:47pm

    Ever used a public golf course or park?

    I see where you are coming from... but public wi-fi (along with Cable TV, Electricity, gas, etc.) seems to be in a nebulous area between the public and private sectors.

    Free markets do not always mean freedom from monopolies... the "competition" in the private sector have mostly evaporated. Most people have only one local phone provider, one cable TV company, one power company etc. Once there might have been competition, but no more. This is disturbing.

    On the one hand, I do not like the idea of tax-funded wi-fi; on the other, I would be the first to sign up for it and give the Cable company the old heave-ho. Thanks to their intransigence and foot-dragging we are far behind many Asian and European countries in terms of broadband speed and availability.

    It's a question of competition; Municipal wifi will either stimulate, stifle or squelch competition. I'm not sure which.

     

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  7.  
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    Ponder, Mar 29th, 2006 @ 1:57pm

    What about goverment's who get an outside company into build and operate the network, and pay then a certain rate for their use. This means that the WiFi still stays under the control of the government, but the money comes from company use and private use. A water board want to use it to wirelessly read meter? Well if they pay £x they can. Same for any company. Indiviuals pay for a connection on a yearly or one off payment, to get a pass code to keep the network secure.

     

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  8.  
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    Joe, Mar 29th, 2006 @ 2:19pm

    The public vs. Taxpayers...

    >why should the public expect free internet at a great cost
    >to the tax payers?

    Funny, the public==the taxpayers in my book.

    Why shouldnt the taxpayers be allowed to provide wifi for themselves?

     

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  9.  
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    greg, Mar 29th, 2006 @ 3:05pm

    Re: The public vs. Taxpayers...

    Yes they are one in the same and no they arn't. For example.

    If a person lives in the city then they are a local tax payer and part of the public.

    But

    If a person is visiting a city they are not a local tax payer but are part of the public.

    Both will want free internet but only one is paying for it...

     

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  10.  
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    Faz, Mar 29th, 2006 @ 3:11pm

    the fact that government wifi can track my moves is what bothers me, not that i have anything to hide but the idea does. then again same can be said for cell phones now

     

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  11.  
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    Packet, Mar 29th, 2006 @ 4:11pm

    The bigger issue with govt wifi...

    ..is security, which will not exist.
    To keep it simple and make it easily accessible it will follow the hotels and other hotspots = no encryption or at best, WEP which is pointless.

    Even if govt did "secure" it - think. When has GOVT ever
    actually secured anything? (trust us..)

    So you'll have to spend $ for a commercial VPN service or be sure that more than a few of your fellow citizens are running packet sniffers and easily have your email, passwords, identity, etc.

    Think the FBI is backlogged now - ha.

    Nothing is free.

     

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  12.  
    identicon
    Dam, Mar 29th, 2006 @ 5:09pm

    Re: Ever used a public golf course or park?

    On the one hand, I do not like the idea of tax-funded wi-fi; on the other, I would be the first to sign up for it and give the Cable company the old heave-ho. Thanks to their intransigence and foot-dragging we are far behind many Asian and European countries in terms of broadband speed and availability.


    For years, I have been an advocate of local municipalities putting in the copper and/or fiber and leasing bandwidth to competing cable services or ISPs. My technical knowledge is limited in the area of wi-fi, but if it can be carried over ethernet, it should be able to go over wi-fi, and that means competing services can be leased wi-fi bandwidth.

    If the US is behind in internet connectivity, it's because there is no competition, and the entry fee is simply too steep for most would-be providers. Laying fiber or copper is a huge investment and few young or mature companies can afford to do it. Municipalities can float bond issues and in doing so, the market will make sure the leased bandwidth will be profitable and be able to pay the bond issue back.

    This is no different than building roads. Without them, few businesses and few homes would ever be built in a municipality. Expanding roadways and other infrastructure usually pays off for the local tax base.

    The Asian and European internet users may have mouth watering 100MBps service, but at what cost? Most other countries have confiscatory taxation; that's how it gets done. I may have a slower connection, but at least I'm not subsidizing a goverment bureaucracy.

     

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  13.  
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    Brian, Mar 30th, 2006 @ 2:39am

    Cross-subsidies

    The fact is that government, and the services they run, are going wireless. The question is whether they do it strictly with taxpayer money in the form of floated bonds or in a public-private partnership or they make use of some form of cross-subsidies from public and business utilization of the wireless network that they build out. From a financial standpoint, it makes sense to take advantage of public and business subscriptions to the wireless service. I can't see it ever being absolutely free unless the private half of a public-private partnership is getting an alternate revenue stream (e.g. Google ads) but that option is out there as well.

    As for security issues, if the municipality is using the same network for services they are going to have to lock down the network somehow. Having worked in the computer security field since the early '80's, it is possible to lock down the inward facing side of a network; I do it all the time (and usually leave a honeypot as a cracker magnet ;-). You can even do it with free software and given the newer technologies out there, you can even check for compliance on connnecting machines before they are allowed on the muni-WiFi. It isn't rocket-science. I know rocket science. It just requires someone who knows what the frag they are doing. and a willingness to pay for their talent. Which is the fundamental problem for/with government in that respect. One nice thing, all the government CIO's/CSO's talk to each other so hopefully they'll learn quickly.

     

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  14.  
    identicon
    Drew, Mar 31st, 2006 @ 1:46pm

    Market != Free Market

    Just because a "private" business CAN provide a service, doesn't mean they SHOULD provide that service, especially if they cant' do it efficiently.

    A good market is efficient. It has many buyers and many sellers. The broadband market is inefficient. It has many buyers and VERY few sellers. The government created this inefficiency by prohibiting competition in certain markets.

    In order to resolve this inefficiency, the government should either open the market to competition, or BECOME the competition. Municipal ISPs, like many municipal services, would likely be beaten in quality and price by a private enterprise. But the point is, THE COMPETITION would drive this increase in quality and pricing...

    Without it, we're left with inferior services for outrageous prices.

     

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  15.  
    icon
    aiyanalunette (profile), Sep 15th, 2010 @ 10:09am

    If your looking for restraint cables I recommend you use http://www.cmacable.com

     

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  16.  
    identicon
    Johnny, Apr 24th, 2013 @ 8:50am

    I would also recommend you take a look at http://www.cccables.com

     

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