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« Google Displays Mountain View Wi-Fi Map | Main | MetroFi Partners with AT&T on Riverside, Calif., Bid »

July 20, 2006

Portland Signs MetroFi Contract

This has received wide play for some reason: The city council gave their official okay for the estimated $10m contract, the cost of which will be borne entirely by MetroFi. That firm said that they will start construction of the network immediately, building it over a period of two years. One losing bidder, VeriLAN, expresses skepticism over the free, ad-supported service model. And Personal Telco's head expect interference to be worse than advertised. The service is 1 Mbps down and 256 Kbps for free with a required ad banner at all times. A $20/month subscription removes the ad banner. Higher speeds should be available for some higher cost, although that wasn't discussed in this article.

One issue about ad-supported networks that hasn't been widely discussed is that the revenue model usually looks at substituting full-time, heavy monthly users who would otherwise pay $20 retail to a firm like EarthLink, MobilePro, or MetroFi getting service for free. But this ignores what will likely be a very large audience of occasional users who wouldn't pay the day rate for the service, and who might not like what is typically a ratcheted down free service in cities that also have for-fee services--they're usually slower, time limited, or have other restrictions.

Thus there's a residual additive ad revenue stream by capturing eyeballs from visitors, suburban residents who come in occasional, or those who have a high-speed connection at home and are only mobile at times. That may be part of the secret of cracking ad-supported free service, if that nut is profitable enough to crack in the long run.

2 Comments

Interference will be a constant challenge and will affect bandwidth. We've seen this with the Seattle WiFi project.

In addition, users will want to access the service from inside of a business or residence (don't think indoor coverage was mentioned).

I hope the ad supported idea works for them but in a metro area there will be plenty of other locations that offer free WiFi without the banner and at much faster speeds.

Greg

Keep in mind that Portland's city government wants to use the network in a substantial manner itself (why they got bids for it's installation) and that reduces how much the "public" aspect needs to raise in revenue for MetroFi.