Former AOL exec John McKinley explains the five reasons that municipal Wi-Fi networks encountered problems and are faltering: Reader Steve Harvey forwarded me a link to this short essay which cogently sets forth the technical and pricing problems with the wave of metro-scale networks that are not being built. He calls muni-Fi a "dead-end approach," although McKinley seems to be referring more specifically to large-scale Wi-Fi as broadband, in-home replacement.

McKinley notes how the industry generalized the scattered success of moms-and-pops to build wireless point-to-multipoint networks over 2.4 GHz into a technically different approach: omnidirectional clouds of localized service. But McKinley writes, five pieces of reality intruded: Weather and trees; utility poles; CPE hassles; incumbent pushback; and "too little bandwidth, too late to matter. McKinley's familiar with the market from his time at AOL, which was considering building such networks (news to me).

I'll quibble with a few of his arguments and facts, including that mesh networking is at the heart of many of these city-wide networks. Ultimately, mesh is hardly used, except in Tropos configurations. Even then, the meshes aren't city-wide, but small clusters of nodes in which each cluster is separately backhauled via point-to-multipoint links. (Meraki is offering true mesh with low-powered radios, without promising robustness; we'll see how that plays out.) But most of what McKinley writes rings true.

Access to utility poles have dogged most large-scale Wi-Fi rollouts in the U.S., and I've written about it extensively here. The CPE hassles--the problems in getting a device in the home to receive outside signals--has turned into price instead of an installation problem. McKinley looks at the requirement for truckrolls, where installers come to a home to figure out the right placement of the receiver, but you don't need them; you just need to put a $150 to $300 high-gain Wi-Fi bridge in each home for about $40 to $50. That's a tricky problem.

Incumbent pushback is another well-covered situation on this blog. Incumbents, challenged by wireless, introduced new, cheaper service almost anywhere a wireless network was even begun, and rolled in the excavators to put more wire, fiber, and cable in where service was scarce. A lot of pricing is "limited," "trial," "for new customers," or "promotional," but much of it has lingered far longer than originally stated, too. With a duopoly, the threat of jumping from DSL to cable or vice-versa leads to carriers giving you deals, too.

Finally, the "too little bandwidth, too late to matter" item hits to the heart of where the market is. If you're focused on using Wi-Fi to replace dial-up, it's not too little bandwidth, especially if alternatives don't exist. But with the increasing creep of broadband, we're reaching a point where an ever-shrinking minority of Internet users--often, in fact, minority Internet users--have real interest in something faster than dial-up. I don't mean that people who don't have broadband don't all want it. But rather that studies by Pew and others show that there's a core of users who don't see broadband as needed or desirable; and some that live in circumstances where no wired connection will ever arrive due to cost.

That is, with more and more people having broadband access, there is a smaller pool of people who want to have it and can have it. The intersection of want and can is where Wi-Fi was supposed to fit in for residential users. That intersection shrinks every day.

So while Wi-Fi networks can't deliver broadband-competitive speeds, they are highly competitive with cellular 3G networks when outdoors. In the best-designed city-wide Wi-Fi networks, Novarum found that Wi-Fi service was faster than 3G. McKinley states that 3G is down to the $20 to $30 range, but I've never seen true 3G--faster than EDGE--at those rates. $40 per month with a smartphone bundle and $60 per month with a two-year commitment for a PC Card is more typical. And cell companies strictly limit how their networks are used due to scarce spectrum.

The one niche that Wi-Fi networks seem to have a real competitive edge is in mobile access at broadband speeds. The introduction of mobile WiMax in its real form next year, and 700 MHz networking in two or three years could change that market model. But as long as Wi-Fi is cheaper, less fettered, and truly mobile, it may still have an edge--it certainly has one right now, but almost no network was built with this particular model in mind.