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October 5, 2007

MetroFi's Portland Network Hits Roadblock, But May Progress

MetroFi's largest network buildout may or may not go forward: Mike Rogoway of The (Portland) Oregonian newspaper reports on his blog this morning that the mayor's office told him that MetroFi will stop building out the Portland network. Later in the day, after contacting MetroFi, I heard from a company spokesperson that the firm has not made any plans to halt the build out. The spokesperson said the company hasn't said in writing or otherwise that plans have changed; they're working with the mayor's office to resolve this confusion. Rogoway's report was updated, too.

This led me to Logan Kleier, the project manager for the city's Wi-Fi project. In an interview, Kleier explained that MetroFi has been seeking to get an anchor commitment from Portland in which the city would commit to spending dollars on a routine basis. However, "Their plan to complete the network is dependent on either the city's ability to become an anchor tenant or the completion of new venture capital rounds." This doesn't conflict with MetroFi's statement to me or a later statement to Rogoway at the Oregonian. MetroFi intends to keep building the network; Portland intends to not become an anchor tenant.

Kleier said, "We've been fairly clear from the RFP construction and the contract signature and all the way through today is that our relationship is a no-risk relationship, and does not involve anchor tenancy, and we continue to be clear about that." He said the city doesn't have a commitment to spend "even $5" under the terms of the deal. Kleier did note that the city continues to consider the usage numbers on the network as a positive development. "There is pent-up demand out there for it. You're just faced with a changing climate in how to pay for it," he said. The high use of the network "sometimes gets lost in the pessimism."

Portland, Minneapolis, and Philadelphia are the only municipal networks in major metropolitan areas still under construction. No other truly large and dense city has a network built or underway. The existing network will apparently keep operating; it covers about one-fifth of the city. (You can quibble about smaller towns over greater areas, and even suburbs like Tempe/Chandler. But those aren't the same thing.)

Portland's network has received an ongoing stream of criticism from local community wireless activists, reporters, and others, while receiving praise when and where it works. MetroFi has released ongoing statistics from the use of their ad-supported network which indicate it likely has more sessions and usage than any other Wi-Fi network in the world. Among other concerns was the lack of early discussion about the necessity for an indoor bridge. Portland's RFP and contract said it would be nice to have a network in which that kind of hardware wasn't generally needed, but didn't absolutely require access with normal Wi-Fi adapters in homes and businesses.

MetroFi has continued to state their commitment to building out Portland even as they shifted their business model for new deployments to require upfront contractual commitments to purchase services on the network they build. In my Economist piece of last month, I noted that Portland and Minneapolis were the only two big cities to have agreed to pay money upfront. Portland's agreement was pretty vague, though: they set a schedule of charges and likely services they might buy, and that, so far, hasn't translated into more than a few hundred dollars a year of commitments. Minneapolis, by contrast, has committed millions in service fees.

Some criticized my inclusion of Portland in that duo because of the lack of strict commitment. However, I'd argue that in contrast to the vast majority of big-city RFPs and contracts, Portland's specifically was inclusive of buying service; others specifically exclude that. San Francisco's contract with EarthLink, never signed, said in great detail that by building this network, EarthLink would have no privileged position in bidding for city contracts for telecom. Which seemed misguided at the time, and still does. Portland was clearly not an anchor tenant deal, however, and that's become the sticking point here.

Kleier said that he fields calls from other cities about the Portland project all the time, and talks to colleagues at conferences on the subject. When he brings up challenges, they're not always receptive. "If they're not in this place of deployment, they're not ready to hear it," he said.


MetroFi has NOT halted expansion of the Portland network. More outdoor access points will go live in the coming months (thereby expanding access to more Portland residents, businesses and visitors in more places), and we are making progress in our discussions with Pacific Power & Light (PPL) to gain access to new mounting assets in areas the network hasn't reached yet. We have also been in discussions with the City of Portland to follow up on their intended use of the network for municipal and public safety applications -- as these would help the City enhance or improve city services and public safety, while reducing the costs of their existing telecommunications expenditures. MetroFi's Portland network continues to be one of the most used muni Wi-Fi networks in the country, with over 17,800 unique users in September who cumulatively spent nearly 300,000 hours on the network in over 228,000 online sessions. It is absolutely a success story, and we thank the people of Portland for their support -- the fan letters have been wonderful! I am particularly fond of one letter we received from a woman who was using the MetroFi-Free service on her porch while waving to her neighbor across the street doing the same. Other testimonials can be found at: You can send yours to Thank you!

In this comment and the update Mike Rogoway provided, Denise Graab is not contradicting the original report on KGW. Scott Burton from KGW states in his report that MetroFi does intend to turn on the APs they have currently deployed but haven't activated (yellow on the map).

MetroFi does not seem to be refuting the City's claim that the deployment of new access points has been put on hold. They are merely offering to bring already deployed (i.e. paid for) access points on line. The various numbers offered for these soon-to-be active APs--"80" (Portland Business Journal), "dozens" (Mike Rogoway's update), and "more" (Ms. Graab's comment)--do not constitute a meaningful expansion toward their contract requirement of 95% coverage.

[Editor's Note: It's pretty clear from the statements that we have two interlocking items: The city isn't going to become an anchor tenant; MetroFi needs either anchor tenancy or more capital to build out. Since the former isn't happening, the latter must for the network to grow. The second graf of my article explains that. So MetroFi doesn't *intend* to stop building, but neither, apparently, do they have the funds to fully develop the network. I don't see them contradicting that.-gf]

It always fascinates me that MetroFi is installing nodes in the neighborhoods that already seem to have plenty of access opportunities, either through other services (like Starbucks paid service or the free nodes run by groups like PersonalTelcoProject), however there is no service in the parts of town without a lot of alternatives (neighborhoods like Arbor Lodge, Kenton, Portsmouth, etc.)

Once again, City Hall and their cronies are choosing the richer, more affluent communities that don't need the service over the "poorer" neighborhoods that could really use free service. I guess blacks and Hispanics that tend to live in these neighborhoods don't need Internet access, and once again North and inner NE neighborhoods are ignored by downtown.

[Editor's note: I don't have any particular knowledge about the politics of this situation, but I would note that MetroFi recommended its own initial deployment pattern, and that they chose neighborhoods in which they could find pole attachments and electricity.

Utility poles are the weak link in Wi-Fi, and it's likely that neighborhoods that are less served by broadband and have less retail infrastructure also have problems with the placement and availability of poles and room to put additional equipment on them, as well as adequate voltage.

So without discounting anything that you write about, it's always worth considering the obvious issue: as Willie Sutton robbed banks because "that's where the money was," MetroFi and other providers tend to roll networks out first where there's low-hanging fruit--where the poles are. The fewer poles and other places to hang Wi-Fi nodes, the more expensive it is per node to deploy.--gf]