W2i Philly: Competition Beneath the Collegiality As Wireless Business Begins to Mature

As the nascent municipal wireless industry has boomed in the last two years, there has been a sense that a rising tide was raising all of the boats. No longer. You could sense the competition beneath the collegiality at the Wireless Internet Institute's Digital Cities Convention, held December 5-6 in Philadelphia.

Conference-goers scooped their lunch from the buffet at the center of the room -- deli meats, assorted pastas, chicken, fish, and pot roast. The vendors -- some hopeful, others expectant -- stuck to their booths lining the walls, eyeing their potential customers and each other. The folks from Firetide touting their 5 ghz surveillance network had their sample camera trained on the "big spender" across the room: Earthlink.

"Some of these guys are on their fourth or fifth round of venture capital funding," the Motorola rep told me from behind a laptop at his booth. "That can't last." He predicted many of the companies with booths at the conference would be out of business within six months.

Or swallowed up. Motorola purchased MeshNetworks in 2004 and Wireless Valley in 2005. More recently, it announced a deal for Netopia, a maker of customer premises equipment for strengthening broadband signals. This approach has helped it secure the largest product line in the industry, complementing an extensive list of government contracts, especially in public safety communications.

But Bel Air still has pluck and what some consider the best radios in the business. "I didn't give a rat's ass which devices we used. I've got all of these guys' stuff in my lab," said Joe Caldwell from US Internet, standing in front of the Bel Air booth and motioning to the adjacent displays of their competitors. He said they chose Bel Air for their deployment in Minneapolis because their units performed the best and in spite of the fact that they cost "an arm and a leg."

Bel Air is not completely tied to US Internet. The equipment manufacturer was also touting its role in the independent eWashtenaw deployment in Washtenaw County, Michigan, and in the Dolphin Stadium deployment for Superbowl XLI. But Earthlink has been using Tropos and Motorola hardware, so when Earthlink win contracts that's bad news for Bel Air. Conversely, with such a huge fan at US Internet, Bel Air will benefit if US Internet wins any of the handful of projects in the south it's bidding on.

What about long term plans for US Internet? Caldwell repeated the claim I heard at MuniWireless in Minneapolis, that they are in it "for the long haul" and do not plan to sell the company. "There's a reason we put the US in front of our name," Caldwell said. But he also said five different companies have made offers.

Bel Air is continuing to innovate, integrating GSM capability into their devices. Jim Freeze wouldn't name the company, but he said a cellular provider was experimenting with using one of their mesh networks for backhaul phone traffic and that a second provider was about to start trying it out. Comcast is already a major investor in Bel Air and the cable giant has a close relationship with Sprint.

"Some people say wireless is not ready for primetime," Freeze said as part of his presentation to the conference. "That's nonsense."

And of course there's Cisco, another big spender. It didn't have a booth, but it was a sponsor of the event and a Sales Business Development Manager was there to moderate one of the panels, eat some lunch, and liaison with IBM.

Cisco has already started a big push to buy up smaller companies, especially with its nascent Media Solutions Group. Earlier this year, it bought Scientific Atlanta, a maker of consumer level set-top video boxes. Now they are reportedly in a bidding war with Motorola for