January 17, 2008 By Andy Opsahl
Over the past several years, hundreds of U.S. cities launched municipal wireless initiatives, as widespread wireless Internet access became the latest must-have for local officials bent on keeping their communities economically competitive. But that activity cooled significantly in the latter half of 2007.
The chill stems from several factors. The implosion of the "free" business model that attracted wide interest in municipal Wi-Fi has left many cities unsure of how to pursue wireless Internet access on a community-wide scale. Furthermore, shortcomings with the wireless technologies used to deliver municipal networks created other unforeseen challenges.
The business-model problems are well documented. Many projects called for commercial network providers to foot the bill for citywide Wi-Fi networks in exchange for mounting wireless antennas on public light poles and other assets. Closing the digital divide was a driver for many of these undertakings, which pinned hopes of network use on the public's appetite for low-cost wireless Internet. For the most part, the networks struggled to attract enough subscribers to make them profitable.
These difficulties were on clear display in 2007 as EarthLink - a major player in the municipal wireless market - cut nearly half its work force after losing millions of dollars on the initiatives. EarthLink CEO Rolla Huff announced the company would back away from further municipal wireless projects until it found a viable business model.
On the technology side, municipal wireless initiatives often ran into higher-than-expected equipment costs, as the task of blanketing large urban areas with Wi-Fi coverage proved harder than anticipated. Cities and their private partners found that hundreds - if not thousands - of Wi-Fi access points were needed to provide adequate coverage.
Where does that leave cities, many of which still want municipal wireless networks?
Cities and commercial wireless providers will hash out better business models. But the lull in new development could offer local governments time to evaluate alternative technologies for simplifying the process of delivering widespread wireless coverage.
A Better Way?
WiMAX, which can produce a wireless cloud connectivity to an entire city using just a few base stations, is emerging as a viable alternative. WiMAX networks require access points roughly every two square miles for urban areas, and one every six square miles for rural areas. By contrast, Wi-Fi networks require anywhere from 24 to 40 access points per square mile for urban areas, said to Riz Khaliq, IBM global business executive for government. Depending on terrain, cities often need a few extra WiMAX antennas attached to buildings to complete the cloud. But that is simpler than installing hundreds of tiny Wi-Fi nodes all over town.
Depending on user proximity, WiMAX can offer stronger signals and faster service than Wi-Fi, but few local governments have implemented it. One reason is computer hardware with embedded WiMAX capabilities largely has not yet reached the market. By comparison, virtually all laptops and other mobile devices feature Wi-Fi capability.
But Wi-Fi's lock on hardware compatibility may end within the next few years: Intel has committed to release a plethora of mobile devices with embedded WiMAX compatibilities by 2008. Sprint continues its commitment to spread WiMAX networks across the United States despite its failed attempt to do so in partnership with Internet service provider Clearwire. Nokia and Cisco have also signaled strong interest in WiMAX through their investments, Khaliq said.
"Cisco's recent purchase of Navini, [a WiMAX equipment provider], is a big example of where WiMAX is becoming, essentially, industry standard," he said. "In the longer term, that's going to commoditize the network, which is going to improve the value and the reasons for these governments to make sure their government has the cloud over their station."
Some assert that local governments should stick to Wi-Fi because their hardware infrastructures are already Wi-Fi compliant. Many