NEWS: EarthLink scales back, focuses muni Wi-Fi effort

<http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9018 218>

EarthLink Inc. is pulling in the reins on its municipal Wi-Fi
business, focusing on existing deals and big cities for the rest of
this year in a move that raises questions about the growing trend of
citywide wireless networks.

The Internet service provider will keep working on projects it's
already committed to and continue talking to other cities, but will
focus on large cities such as Los Angeles and Chicago, Chief
Financial Officer Kevin Dotts said in a conference call last week
after the release of EarthLink's first-quarter earnings. The company
lost $30 million in the quarter, or 24 cents a share, as more
subscribers left its traditional dial-up business.

For the rest of the year, EarthLink plans to focus on driving up
usage in large cities rather than launching new projects, Dotts said.
The company plans to cut in half its capital expenditures on
municipal Wi-Fi.

...

Reports of spotty service on some of the networks, along with
political spats and doubts about advertising prospects, have taken
some of the shine off the municipal Wi-Fi movement. EarthLink's
scaling back is likely to raise further questions about the economic
viability of the concept, though these projects are still in their
infancy.

The Atlanta service provider has won contracts for networks in
Houston, Corpus Christi, Texas, and other cities and has been chosen
along with Google Inc. for a high-profile proposal in San Francisco
that is embroiled in political controversy. But so far the company
only has about 2,000 monthly consumer subscribers to its municipal
Wi-Fi services, which executives estimated cost an average of $40 per
household to deploy.

[MORE]

Comments: Reality is setting in. Early rosy projections now look
increasingly over-optimistic. The San Francisco system faces serious
technical obstacles and still hasn't been proven. It's becoming more
and more clear that municipal Wi-Fi is a bad idea.

--
Best regards, FAQ for Wireless Internet: <http://Wireless.wikia.com>
John Navas FAQ for Wi-Fi: <http://wireless.wikia.com/wiki/Wi-Fi>
Wi-Fi How To: <http://wireless.wikia.com/wiki/Wi-Fi_HowTo>
Fixes to Wi-Fi Problems: <http://wireless.wikia.com/wiki/Wi-Fi_Fixes>

"Municipal Broadband Subsidies Are"
<http://www.heartland.org/Article.cfm?artId=21013>

Fifty-two municipal broadband systems have soaked up $840 million in
taxpayer money over the past 20 years while providing little benefit,
according to a study released in February.

Wi-Fi Waste: The Disaster of Municipal Communications Networks, by
Sonia Arrison, Dr. Ronald Rizzuto, and Vince Vasquez, published by
the Pacific Research Institute, represents the latest round-up of
municipal broadband financial performance.

The report confirms again what past studies have shown: Municipal
broadband systems invariably cost more and deliver less than
promised. They rely heavily on loans and transfers from established
municipal utilities such as electricity and water. Even with the
power of the public purse, 77 percent of the time municipal networks
can't pay their way, the report observes.

The survey examined 52 government-owned networks that compete in the
cable, broadband, and telephone markets. It concludes the
government-owned systems are "financial disasters."

[MORE]

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Fixes to Wi-Fi Problems: <http://wireless.wikia.com/wiki/Wi-Fi_Fixes>

Some of the things that make San Francisco muni Wi-Fi a bad idea:

* Sweetheart deal of less than $100/year to lease space on 1200 muni
utility poles, a taxpayer subsidy.

* Still no deal with PG&E for the needed additional 1200 utility pole
locations, cost could be much higher than sweetheart muni deal.

* No assurance system will work well even with 2400 utility poles,
likely to be many gaps in coverage.

* Free service is slow at 300 KB/sec, and likely to be even worse with
poor signal and/or network congestion.

* Fee services will effectively subsidize free service.

* Fee service prices higher than current market prices for DSL and
cable.

* Carriers will be motivated to sell fee service, or better equipment to
free subscribers, instead of fixing problems with free service.

* No assurance system will be upgraded to keep up with technology.

* System will be "taxed" at a rate of 5 percent (franchise fee).

* Won't even be tested before the end of 2007.

* Won't be completed until the end of 2008, with further delays likely.

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Fixes to Wi-Fi Problems: <http://wireless.wikia.com/wiki/Wi-Fi_Fixes>

John Navas <(E-Mail Removed)> hath wroth:

><http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9018 218>
>
> EarthLink Inc. is pulling in the reins on its municipal Wi-Fi
> business,

>Comments: Reality is setting in. Early rosy projections now look
>increasingly over-optimistic. The San Francisco system faces serious
>technical obstacles and still hasn't been proven. It's becoming more
>and more clear that municipal Wi-Fi is a bad idea.

You're being too nice. In my never humble opinion, municipal Wi-Fi is
a really awful idea. Massive municipal Wi-Fi and mesh deployments of
the size proposed by Earthlink have serious technical issues. The big
problem is that such large Wi-Fi systems do not scale well. What
works just fine for a small deployment, doesn't necessarily work the
same way with a massive deployment. There are also problems with
latency through too many hops, geographic routeing, cold spots[1],
lack of indoor coverage, interference, hacking, security, abuse,
maintenance, vandalism, reliability, general lack of support, ad
nasium.

For the cities, there's also no compelling revenue generating or
savings incentives. It's like when credit cards first appeared.
Nobody wanted to pay for a credit card because no merchants were
accepting them. So, the credit card companies had to run at a huge
loss for quite a while and literally give away cards and merchant
accounts. They were eventually saved from bankruptcy by the banks.
It's the same with muni-wireless. Very few are going to pay for a
wireless subscription without adequate coverage, decent performance,
and reliable service.

I figured (i.e. guessed) that Earthlink would get in over their heads
after some major deployment demonstrates what can be easily calculated
on the back of an envelope. I hadn't expected them to throw in the
towel quite this early. Scaling back really means "trying to wiggle
out of the contracts" and avoiding getting sued by the contracting
municipalities for breach-o-contract.

Anyone wanna take a (small) bet that Earthlink magically discovers
WiMax as a replacement for municipal wi-fi? Their partnership with
Digipath didn't exactly work as expected, but it's the only real
alternative for Earthlink as Wi-Fi has problems, dialup is dying, and
broadband cable and DSL are already monopolized. The catch with WiMax
is that it really only solves the technical problems. It does nothing
for the administrative, political, and financial problems.

[1] A wireless cold spot is the opposite of a wireless hot spot.

--
Jeff Liebermann (E-Mail Removed)
150 Felker St #D http://www.LearnByDestroying.com
Santa Cruz CA 95060 http://802.11junk.com
Skype: JeffLiebermann AE6KS 831-336-2558

On May 14, 11:02 am, John Navas <spamfilt...@navasgroup.com> wrote:
> Some of the things that make San Francisco muni Wi-Fi a bad idea:

I tend to agree that we are a long way from free internet wifi access.
TV and
movies tend to show scenes where the good and bad guys can freely
access
other systems from their laptops at super high speed anywhere they
happen
to be, when in reality there is nothing like that available. I've been
to several
US metro area with my laptop, and free available internet connectivity
is just
non-existent in most places. I've been tempted to fork over my $50 a
month
fee so I can get internet access through the cellphone providers,
but.. that's
just to frivolous spending for me at this point in my life. :-)

"SF Wi-Fi plan with Google and Earthlink shelved until July"
<http://www.theregister.com/2007/05/15/sf_wifi_delay/>

Concerns over quality and privacy not going away

San Francisco's plan to tap the resources of Google and EarthLink to
blanket the city with free, sluggish Wi-Fi has faced another delay,
as members of the Budget and Finance Committee voted to postpone
proceedings until July 11.

Since it was finalized in January, the plan has sharply divided San
Francisco's elected officials. It calls for EarthLink to pay the city
$2m over four years for the right to build, own and maintain a Wi-Fi
network that would be ubiquitous throughout the hilly, seven-mile by
seven-mile city. EarthLink would be permitted to sell a 1 MBPS
service for $22 per month, but would also be required to offer a free
service that offers 300 KBPS speed.

...

Several supervisors, however, have convincingly made the argument
that Newsom's plan to provide free service at painfully slow speeds
amounts to little more than sweeping the city's poorest into a new
sort of ghetto. Those of us who can afford it will continue using
services with bandwidth of anywhere from 1 MB to 10 MB to consume
video, chat with Skype or use 3-D, immersive services such as Second
Life (which we're told is the wave of the future). Meanwhile, the
mostly black and Asian people who showed at yesterday's rally will be
forced to ride at the back of Newsom's digital bus. Or so opponents'
argument goes.

Besides the sluggishness, there are other quality concerns. According
in Business Week, wireless consultant Novarum found it was able to
get connections only 72 per cent of the time when trying to access 20
sites in Anaheim, California, where EarthLink is currently setting up
a network that would be similar to San Francisco's. Critics note
that, in the absence of special gear, the EarthLink network won't
deliver a signal to people who live higher then two stories high or
whose living spaces are too far from the street.

Critics, including the American Civil Liberties Union, also point to
privacy concerns. To subsidize the free service, those using it agree
to allow Google to track information about their surfing habits.
There currently are no mechanisms in place to allow users to surf
anonymously or pseudonymously. "The contract, as written, is akin to
someone following you in the library to monitor and record what books
you are browsing," the ACLU warns.

[MORE]

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