Municipal Wi-Fi Networks: Easier Said Than Done

<p>After a flurry of announcements regarding blanketing cities with free Internet access, the actual forecast for these wireless networks looks rather bleak.</p>
September 15, 2007, 9am PDT | Christian Madera | @cpmadera
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"...Municipal Wi-Fi schemes have been struggling to make ends meet. EarthLink, which runs networks in Philadelphia and New Orleans, recently admitted that "the Wi-Fi business as currently constituted will not provide an acceptable return." This week the firm said it would lay off 900 workers, including the head of its municipal Wi-Fi division, the future of which is now in doubt."

The root of the problem is that city-wide Wi-Fi, which relies on outdoor radio transmitters, does not provide good access inside buildings, since it uses weak signals which do not always penetrate thick exterior walls. Proponents of the technology also underestimated the number of transmitters that would be needed to provide blanket coverage. Most networks deployed between 2004 and 2006 used between 20% and 100% more nodes than expected, which pushed up costs.

Worse, the networks that have been completed have attracted few users. Taipei's city-wide WiFly system, the largest such network in the world, was reckoned to need 250,000 regular subscribers by the end of 2006 in order to break even, but had attracted only 30,000 by April 2007. America's biggest network, around Tempe, Arizona, was aiming for 32,000 subscribers, but had only 600 in April 2006 and has not provided figures since."

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Published on Friday, September 14, 2007 in The Economist
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