MuniWireless explains EarthLink's new stance towards metro-scale networks: Carol Ellison writes that the new CEO of EarthLink said the firm's approach towards muni-Fi isn't working, and anchor tenancy will be required for future projects with a commitment for service on completion of the network. It's not unexpected, as it's precisely why MetroFi shifted their model. It's been several months since the free lunch ended, and municipalities are, I'm afraid, still reeling from the news that they may have to run financial analyses to determine cost conversation, and talk to voters about committing funds that they expect to get back in savings.
That's a different ballgame than "we build it, cities can choose to buy services" or even a true public-private partnership. This is a hybrid of a few different approaches, but it means the city still is in the position of being a customer, not a network builder. Cities now will put more at risk by committing funds towards services that might not be delivered if networks can't be completed or firms go out of business or exit markets. The risk increases because cities will have to terminate current services to reap savings, and thus put their connectivity and productivity in jeopardy against a new network. Cities might then be in a position to have to spend money suddenly to assume control of a failing network--depending on contract terms--to keep continuity of service.
This was true even when networks were being built at companies' expense with cities choosing to migrate services. But in this new anchor-tenant approach, cities have to commit before networks are built, even if they have objective, independent tests that have to be passed before they start paying money to the service provider.
Meanwhile, the Kite Networks division of MobilePro (a public company) is sold to Gobility (a private) one: The deal, announced today, but disclosed in an SEC filing July 10, indicates that Gobility is paying $2m in convertible debentures to MobilePro, meaning that it's a stock deal. Gobility must raise $3m in cash by August 15, according to the filing, or default, in which case MobilePro can pay a nominal amount to re-acquired Kite. Kite operates a few Wi-Fi networks, the largest ones in the Southwest, and provides Sprint-branded wireless broadband in the 2.5 GHz. Kite claims 17,000 customers across all its operations.
Here is how I see EarthLink. Their equipment (mainly Tropos) is only good for outdoor networks with average bandwidth and minimal users. This is well suited for government emergency services, mobile city workers, meter reading, etc.
Their current generation of technology is not designed for a large amount of home users (subscription fees). They dont have the speed to lure people away from cable/dsl. The network won't support a vast amount of simultaneous users. You can have the benefits of a mobile connection, but the vast majority of people lack the mobile device to truly take advantage of it.
Earthlink/Tropos loves to state how many wi-fi adapters are out there but so many of them are in devices not designed for this type of environment. Any device indoors will not work on their networks without a powerful booster. And the outdoor portable devices (smartphones/iphone/mp3 players) are not out there in great enough numbers yet. The mobile applications are also lacking, but iphone alone will greatly change that this year.
So their real only option is to milk the government contracts and fully utilize every service they can on the network. The rest is a waiting game for better mesh technology and the uptake of mobile devices to the masses.
It's going to be a rough year or two for them, but I think they are in a good position for the long run. Ubiquitous wireless is the future and to be the market leader will be very profitable. I just hope they have the funds to make it that far.