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Non-Profit Wireless in Boston

Steven Titch
August 2, 2006, 3:22pm

Taking a new direction in municipal wireless, the city of Boston is proposing the creation of a non-profit corporation to own and manage a citywide wireless network. It represents something of a "third way" for muni wireless. After coming to terms with the failure rate of city-owned telecom networks, most cities have decided to award Wi-Fi contracts to ISPs such as EarthLink and MetroFi. If non-profits participate, they are usually part of the effort to bridge digital divide issues, as is the case in the Philadelphia plan. Boston would differ from these. Under the plans issued earlier this week, the city would place the responsibility of raising the $16 million to $20 million need to fund the network on the shoulders of a private non-profit group, which would own the network. No commercial ISPs could have a stake (although they might be permitted to manage operations). At the same time, no taxpayer money would be used. The city would purchase services from the non-profit, which would be allowed to use city right-of-way. It represents a bold move toward communitarian technology, and has received support from traditional supporters of the municipal movement, although many still believe (sigh) it would be better if local government owned the operation outright. But even Boston Mayor Thomas Menino had a good argument against this: a non-profit also assures independence from the city and continuity for the project. A future administration could let a city-owned system languish. The plan triggered a lengthy series of talkbacks at muniwireless.com, as to whether the government can actually outperform the private or nonprofit sector in providing wireless services, notable because Marty Hahnfeld, senior vice president of marketing at SkyPilot Networks, a vendor of wireless mesh network technology to service providers makes points such as...
A point to consider: Today, there are fewer well funded efforts in the Muni WiFi service provider (builder/owner/operator) game than one would expect – why is this? The space is red-hot right? Why is the same private equity community which usually over-funds every tech trend with a chance being so careful? The reason is simple, the costs and risks associated with building, operating, and supporting networks are high and the ability to turn a profit doing requires a lot of know-how and efficiency. We learned this in spades between 1997-2002 with the CLEC implosion. What makes this any less a risk when the city takes the role of owner of a single network? What happens when one of these networks needs subsidies 100-200% beyond the original budget forecast? Doesn't that network then become subject to being "at odds" much the same as you cite on the private network scenario?
...without being called a telco shill. Read the entire thread here.


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