Where Art Thou Muni Fi?

By Glenn Fleishman March 16, 2009

Seattle never had a plan for city-wide Wi-Fi. Pilot projects in downtown parks, Columbia City, and the University District remain just that. An ambitious attempt to get a private firm to put fiber optic cabling through Seattle is stalled years after its start; there was an option in that proposal for a provider to put in a metropolitan Wi-Fi network, but it wasn't required.

Seattle's failure to have a Wi-Fi strategy now seems like a brilliant move: Only one major municipal network out of dozens in the U.S. worked out—and more promising private networks have emerged.

For a while, it seemed like every major city had some kind of wireless plan: San Francisco and Philadelphia were the first—followed at various points by Saint Louis, Houston, Portland (Ore.), the entire Silicon Valley, Miami-Dade County, Chicago, and many others.

At the start of "muni Fi," in 2004, Wi-Fi was seen as a panacea for crossing the digital divide: A way of bringing high-speed broadband for free to homes that either weren't well served by the incumbent wired providers—those using coaxial cable or telephone wire—or where prices were unaffordable for lower-income individuals and families.

That shortly transformed into a publicly funded “giveaway” of broadband, because the notion raised the ire of taxpayers and right-wing think tanks (some of them sock puppets for the telecom industry). Giving away broadband would make private firms suffer, the argument went, and require those already paying for broadband to subsidize everyone else.

Forget that that kind of subsidy exists across American society and industry—tobacco crops, anyone?—but it was a sticking point that cities with urban rot and failing schools, like Philadelphia, could hardly overcome.

But at first, it seemed promising. In mid-2005, Internet service providers were lining up to build Wi-Fi networks at no cost to cities that issued requests for proposals (RFPs). The cities would define the scope of the network, the resources they could provide, and the kind of city business that could be incorporated into the deal. Most of the time, cities committed $0 in services. Amazingly, providers bit.

All the muni Fi providers who said they'd bear all the cost of building a network were in it for the revenue that they couldn't get from wires: Cable and phone companies have made it nearly impossible through new laws, courts, and regulation for competitors to use wire in the ground or on poles at a "wholesale" price that lets a competitor actually offer service in competition with the incumbent.

Muni Fi providers like EarthLink were willing to offer unlimited Wi-Fi to the home (via a $100 to $200 signal booster that could be leased, too) and while roaming for about $20 per month because this would let them move dial-up customers to a more expensive plan while increasing margins and control. They could also pick up customers who had avoided broadband due to cost, or broadband customers who would rather pay less and who didn't need whatever speed they were getting.

Only one firm, MetroFi, focused on advertising-supported service—with an optional ad-free subscription price—and that model didn't prove out in the end, either.

Seattle never got on board for muni Fi, perhaps because we had just enough Internet everywhere. Comcast, Qwest, and Speakeasy (a local competitive DSL firm sold to Best Buy last year) contended for enough business in enough parts of town that the hue and cry never seemed to erupt here.

Seattle was also early in having not just Wi-Fi in coffeeshops, but in a lot of other locations, including King County library branches, the revamped Seattle Central Library, and lots of other categories of business. Starbucks put Wi-Fi in across its Seattle stores early as well.

(By the way, Seattle has a long-running independent wireless group that's been pursuing and building a separate cost-free, unrestricted use wireless interchange network that allows parties to hook into central wireless points up on towers and building tops. Seattle Wireless' network isn't for end users on laptops, but for any organization that wants to be part of a telecom-free infrastructure.)

But outside of Seattle, companies like EarthLink, MetroFi, Kite Networks, US Internet, and many others poured tens of millions of dollars into buying cutting-edge outdoor, high-wattage Wi-Fi nodes and stringing them around cities.

In the end, it came mostly to naught. It turns out that cable and DSL firms don't sit still. In the arc from 2004 to 2007, when municipally encouraged Wi-Fi came to a crashing halt in the build-it-free model, broadband speeds and broadband coverage went way up. In cities with poor service that had Wi-Fi plans underway, incumbents took that as a challenge and offered cheap one-year introductory rates, built more infrastructure (these were the boom times and they had capital to burn), and generally got better.

Portland contracted with MetroFi for its network. MetroFi had already built some networks in the San Francisco Bay Area, and was working on several more around the country. Portland was its biggest endeavor.

MetroFi ultimately couldn't afford to complete the network, and asked the city to sign on as a so-called anchor tenant, agreeing to and in some cases pre-paying for services to be delivered. Portland demurred, saying that wasn't part of the deal. MetroFi faced the same situation in other cities in which it had won bids but not yet built any networks, including Toledo, Ohio, and Anchorage, Alaska.

Other providers followed suit or preceded MetroFi in leaving the market. EarthLink retreated into its very lucrative, but constantly shrinking dial-up business. (When I wrote an article for The Economist about the death of dial-up a few years ago, a researcher on the topic of U.S. connectivity summarized those remaining on dial-up as, in brief, rural, elderly, or obstinate. Or a combination of all three. People who couldn't get broadband, didn't understand it, or simply didn't want it. Cost is also an issue.)

The only successful big-city Wi-Fi network in the U.S. is in Minneapolis, and it's successful in part because the city committed to millions of dollars of service agreements as part of US Internet Wireless (USIW) building the network. Even there, there's a small but significant dead zone due to a problem with decorative power poles not being set up correctly for mounting outdoor Wi-Fi nodes. (Success, by the way, is measured by statements made by the company; years into the project, it reports over 10,000 customers, and it's still operating, both of which are positive signs.)

The reason for all this is that Wi-Fi was designed to be used indoors, with overlapping "cells" providing wider coverage—think about pointing several flashlights at the ground to create a larger area of light, overlapped so there's no gap between them. Microsoft has thousands of Wi-Fi nodes across its campus, as do many large corporations and universities.

The greatest potential today for Wi-Fi like coverage lies east, in Kirkland, with Clearwire. The company is actually Clearwire 2.0: Craig McCaw's Clearwire was reformed into a new entity with the same name and 51 percent ownership by Sprint Nextel.

Clearwire 2.0 has raised billions beyond its first incarnation to build a national wireless broadband network using technology called WiMax. Clearwire's current Puget Sound network uses a pre-WiMax technology that's slower and less resilient than the real stuff. WiMax can offer downstream rates of several megabits per second, and Clearwire put Seattle on its 2009 roadmap for launch.

WiMax has everything Wi-Fi does not when it comes to outdoors. Using exclusive licensed spectrum that Sprint and Clearwire pooled into Clearwire 2.0, WiMax base stations can push out far higher power than Wi-Fi gateways may. Wi-Fi uses unlicensed spectrum open to all, but it comes with many limits to avoid interference.

The downside of WiMax is a lack of accountability to the community. The best part of muni Fi was that cities were taking some control over their business and community development by asking providers to cover most of a city, not the most lucrative or most populated parts, many of which already have two or more broadband options.

WiMax isn't inherently a technology for private businesses, but the way in which the U.S. (and most countries) allot and control spectrum makes it difficult for government to both possess appropriate frequencies for building a wireless broadband network of any type, and the resources to deploy such a network. You need to have a huge network typically to afford the fixed costs to make the network work.

Quite small WiMax networks, covering towns with from 1 to 10 transmitters, are being built by regional firms using some spectrum that the FCC licensed in a sort of libertarian way: any one who wants a license may obtain one for a small fee, and all users of the same spectrum in the same area are expected to work out any problems with the FCC meddling. This spectrum is limited to less-populated areas of the U.S as it shares a military use in major cities, thus no big telecoms are interested. (Seattle/Tacoma is a major exception as a major market in which this special band is available.)

What's ironic is that Sprint Nextel and Clearwire assembled a good hunk of the national spectrum the new Clearwire is using for WiMax from educational institutions that Congress granted what was once seen as relatively unimportant frequencies to years ago for instructional television and some early forms of low-speed wireless networking. School districts and private institutions received anything from a pittance to millions of dollars to sub-license to Sprint and Clearwire.

There's also the private/public argument: Government shouldn't compete in a robust markets because it acts as both regulator and competitor, and softens private investment in technological advances. There's a lot to be said around that, especially living in a cable/DSL duopoly which was stalled for a long time over improvements in speed and drops in price."

But, of course, it was that very requirement that doomed muni Fi, as using Wi-Fi to build out city coverage is too expensive and too difficult when it's focused just on bringing residents Internet service.

Cell carriers AT&T and Verizon are committed to an even-faster wireless offering called LTE (Long Term Evolution), which we likely won't see in Seattle until 2012. However, both firms have purchased licenses that require them to build out across every license--relatively rural areas of Washington may wind up with tens of megabits per second available wirelessly at reasonable prices where no DSL or cable firm would ever reach, although it may be 2014 to 2016 before that happens.

Seattle may have erred in not having a broadband plan of some sort, Wi-Fi or otherwise, but by having dithered enough competitive services may enter the market this year that prices will be pushed down, speeds jacked up, and ubiquitous coverage a reality. The telecoms remain in charge, but competition may loosen their grip.
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