MuniFi’s Weak Link: Public Use

Craig Settles, a consultant who studies all things MuniFi, sent out a report last night that says public access of city-wide Wi-Fi networks “will be widely viewed as financially the weakest pillar in the business case for municipal wireless,” by the end of 2007. Instead, mobile workforce applications will be “muni networks’ big ROI generator.”
You didn’t have to tell us that public use of MuniFi networks isn’t likely to be the saving grace it’s often painted as, and carries some real business concerns. The more we test out and examine city-wide Wi-Fi deployments like Milpitas and Mountain View, the more we are starting to realize that resident use based on a $20 plus subscription, might end up being pretty limited. Free services will likely be used more frequently, but the ad-based revenue model for free service is also so far unproven.

What we are starting to realize is that MuniFi isn’t a very attractive replacement for DSL or cable service, as use within homes isn’t always guaranteed, particularly without extra hardware. In San Francisco, EarthLink says a third of the households could need additional hardware ($50 to $100) that pulls in the Wi-Fi signal. When we previously reported on Google’s Mountain View network, the company had said that it is unlikely that a Wi-Fi-enabled laptop or computer with a conventional Wi-Fi card will work indoors at most locations — ie, extra hardware is needed.
For a free service, like in Mountain View and Portland, residents are more likely to use the service, even with some spotty connections. But in a city like San Francisco, (if the deal is approved,) EarthLink’s 1Mbps service will be offered for $21 per month to most residents.
If I lived in San Francisco I’d likely choose any of the other options over that choice — Google’s 300 kbps for free, $15 to $20 for comparable speeds with DSL, or cable’s more expensive but often faster options.
Settles says: “Public wireless access is good political sound-bite marketing, but the beef is mighty hard to round up.” We’re not sure how much of EarthLink’s profits are based on those $21 subscriptions, but given EarthLink is looking for revenues, not running for office, that could be its business model’s biggest concern.