EarthLink Reconsidering Muni-WiFi Business?

As embattled muni Wi-Fi steps back and re-adjusts its role in the world, it seems more and more that the public access aspect of Metro-scale Wi-Fi is seen as a bad idea, while the government operations aspect is growing to be seen as the more suitable fit. Where does that leave you if you are a public access player in this market? Well, that’s exactly the question EarthLink is struggling to answer right now. The ISP is going to put future Muni Wi-Fi plans on hold as it evaluates the economics, markets, and performance of its existing four contract cities. That’s not to say that Earthlink will bail on Metro Wi-Fi, but it certainly supports our thesis that these networks were over-hyped and need to be re-evaluated. The CFO, Kevin Dotts, says Earthlink is “‘not yet able to establish that comfort level’ that the investments are really profitable”. This willingness to reconsider is one of the advantages of a private/public partnership in that governments are more likely to bluster forward with good ideas and bad alike, since they are politically motivated, and can pass the bill to you later on. Private companies, however, are the canaries in the coal mine; they will bail when the models don’t make sense. Earthlink, SureWest, and Google are all good examples of companies with little vested interest in the technology – they just want a good solution. Watch the canaries.

Earthlink may well revitalize their efforts in the space, with adjustments. But I’m not sure where a (largely) consumer ISP is going to find a clear role in a Metro Wi-Fi future with government operations as the anchor subscriber.

It bears repeating that if the market eventually agrees that municipal government operations are the driving force behind successful Metro Wi-Fi, then we must also question the drive for ubiquitous coverage. You see, ubiquity is much, much more expensive than hotzones or single APs. Yet a few dozen or so hotzones in a city like Chaska or St. Cloud may be all that it takes to provide the benefits to municipal operations. Building inspectors can easily be given a map of the AP locations, and can drive a short distance instead of having to drive all the way into City Hall. This still provides most of the benefits of ubiquitous coverage, but lowers cost, complexity, maintenance, etc.

Thus, my theory is that when these grandiose notions of public access are scaled back to re-emphasize municipal ops use, the next thing to scale back will be the need for blanket coverage. And then there's no need for a Metro Wi-Fi Mesh. A few dozen, simple and cheap APs with DSL will do the trick. No partnerships are needed, a town could easily build/manage this by themselves.

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