Fast Company examines where metro-scale networks are heading: The writer looks at the state of municipal Wi-Fi and where it stands in light of recent changes. She interviewed me before EarthLink announced their plan to require "anchor tenancy" by municipalities for which networks they're bidding--that is, a contract in which the city agrees to purchase a minimum dollar amount of services over the life of the deal. MetroFi kicked in that provision themselves earlier this year.
I sound a bit negative in the article, as I expected that EarthLink might have exited the Wi-Fi business entirely, while honoring their existing network contracts, perhaps even selling off those networks to other firms. Instead, EarthLink chose a middle ground. But requiring a city to commit to services is like asking a city to spend money, even if the city's telecom/data spending remains neutral or goes down. EarthLink will likely participate in many fewer bids, and even if they win a bid, a binding deal is less certain because the service level negotiation will likely come only in detail after the bid.
So EarthLink isn't leaving the market, but they're no longer planning to put in anything like the dollars they have to date. They never released budgets of what they expected to spend overall, but I thought it was significant when the firm didn't submit a bid for Wireless Silicon Valley. That project seemed vast to me, and the estimates to build it have moved from $50m to $100m when it was announced to $100m to $150m today. EarthLink was wise to not step in that asphalt pit.
On the MetroFi front, I was quoted correctly when I'm cited saying, "MetroFi's lost four contracts they had in the bag, and I don't think that's an accident." Let me elaborate, though: I don't mean that MetroFi caused that to happen. Rather, that the anchor tenant requirement has caused a lot of rethink in cities that were previously all ready to go. (The four contracts I'm thinking of are Batavia/Geneva/St. Charles, Ill.; Toledo, Ohio; Anchorage, Alaska; and Corona, Calif.)
One thing is for certain: if you're a small town, you can kiss no-cost Wi-Fi goodbye. If you're medium-sized, you need to come with a budget in hand you're willing to sign over to a provider. And if you're truly large? You may be out of luck. That's right. Given EarthLink's experience in San Francisco, I expect that a city of that scale would have to commit to something like $2.5m to $5m per year in services, and negotiate a contract within a reasonable period of time. This means it's likely that large cities won't be able to come up with the dough to prime the pump, even if they're not paying a cent until the network is launched.