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June 17, 2008

Eleventh Hour Rescue for Phila. Network

By Glenn Fleishman

UPDATE: Investors announce plan to complete Philadelphia Wi-Fi, built wired network: Now this is clever, and a new way of thinking. A group of investors will take over EarthLink’s Wi-Fi network and complete it, while also building out business-grade wired service in competition with local carriers. The anchor tenants on the wired and wireless networks will provide the revenue to support the Wi-Fi side. This is not a new model, but this is the largest scale on which it’s being tried commercially.

The OneCommunity organization, started in Cleveland, and in the process of expanding to other communities, is a non-profit-focused effort based on having academic, municipal, and business stakeholders that would make use networks that were built. The lack of a profit motive allows the participants to get reasonably priced or even cheap service, while serving community, business, and economic development goals and also offering Wi-Fi at no cost. (OneCommunity benefits from 500 miles of donated fiber-optic backbone, too.)

The Wall Street Journal separately reported in a brief story that EarthLink’s CEO released a statement in support of this new group’s plan, and a spokesperson told the Journal that EarthLink would work closely with them on a transition.

Based on what I have heard in Philadelphia, Verizon and other players could use competition on the wireline side. Back in 2006, the city’s then-CIO Dianah Neff said in an interview that the city could replace 300 to 600 lower-speed, expensive wireline connections with point-to-multipoint wireless links that would leverage the Wi-Fi infrastructure’s backbone—its backhaul distribution network—to reduce the city’s cost while improving connectivity.

That same opportunity exists today, and it’s a big reason that Towerstream has expanded so rapidly. Towerstream and its competitors can bring out a T-1-and-faster competitive wireless product in as little as a day that rivals or is cheaper than the wireline alternative.

When you go to rates faster than T-1, costs often go way up; wireless broadband doesn’t have an automatic price hop into more expensive gear when you cross the 1.5 Mbps T-1 limit. That’s changing as fiber is brought to businesses (AT&T via its small business division), and alternative offerings such as a new 10 Mbps/10 Mbps Speakeasy offering hit the market.

In this scenario, the Wi-Fi network serves as a useful adjunct for resident, visitor, digital divide, and business purposes without being the sole pivot on which the entire service rests. We’ll see what happens. The folks who will run the network haven’t even picked their business name yet. How about, “The City of Brotherly Wireless.” (I’m not a naming consultant.)

EARLIER TODAY: Local investors poised to assume control of Philadelphia Wi-Fi network: The Philadelphia Inquirer says two local businessmen will form a new company to create a for-profit service that will have a combination of fees and advertising support. One of the two was briefly the head of the non-profit Wireless Philadelphia that technically is responsible for the network; the other, a former Verizon executive. Their announcement is expected later today.

Can they succeed where EarthLink (and others) failed? Possibly. If they get the same deal that EarthLink previously offered, they’re getting a lot of equipment for free and a quantifiable set of problems. I had written earlier it wasn’t a good deal for Phila. to accept the network, but a private operator that’s locally based and is trying to do good and get a return on its investment may be able to raise money and set more modest goals. Starting from scratch is a non-starter for any firm at this point.

What they desperately need to do if they acquire the network is immediately bulk out several critical square miles, convince the city to buy some service right away (point-to-point dedicated connections to replace wirelines comes to mind, but will an ex-Verizoner be able to convert municipal revenue that’s going to his old employer without qualms?), and show that the network can work.

The advertising part is interesting. MetroFi has shown that their particular flavor of ad-supported Wi-Fi doesn’t work. But their goal wasn’t crossing a digital divide, and the Portland, Ore., network was never given high marks by local users as to its robustness and reach.

Posted by Glennf at June 17, 2008 5:39 AM

Categories: Metro-Scale Networks, Municipal

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