In recent months, after major vendors like EarthLink pulled back from their once-ambitious plans to offer wireless broadband in many major American cities, the future of municipal wireless services was seen as dismal. It was disappointing to learn that a promising new local commons might not, in fact, be economically viable. The good news is, wi-fi is alive and well.
Esme Vos one of the leading champions of municipal wi-fi, points out in her 2007 State of the Market report that wi-fi is hardly stalled, as many people seem to think. Although the projected growth of wi-fi over the next several years has declined, it is still growing and is likely to exceed $900 million by the end of 2010, Vos predicts. But the growth will be concentrated on small and mid-sized cities, not the major cities, and it will have a different economic model than the one originally envisioned.
According to Vos, some 400 U.S. communities are now building wi-fi systems. The financial and management scenarios differ greatly. Sometimes the vendor will run the systems; other times, the city will. One big change is the business model. Instead of major vendors building the systems and reaping revenues from private subscriptions and advertising, the new business model is for the municipality to guarantee a certain minimal annual fee to the vendor, based on its usage.
Many cities now understand that the wi-fi systems are not just a substitute for wireless telecommunications; they realize that the systems are a cost-efficient and versatile infrastructure. Wi-fi can enhance government services, especially public safety and emergency services, while cutting costs and providing free Internet access to citizens. So in Burbank, California, for example, the city has been able to use wireless water and sewer meters and save the expense of human meter readers. Elsewhere police and fire departments use wi-fi to send photos from emergency situations to other first-responders.
I am reminded of a pioneering 2005 essay on why infrastructure should be treated as a commons, by law professor Brett Frischmann An Economic Theory of Infrastructure and Commons Management. Vos echoes many of the insights that Frischmann made in his essay. She told PC World “Looking back over the last couple of years, the main lesson I learned is that when a city sets up a citywide wi-fi network, they have to look at it as an infrastructure that carries a variety of services and applications. They can’t look at wireless itself as a service.”
Once wi-fi is built, it quickly becomes an indispensable platform for all sorts of unimagined uses. City support of wi-fi as infrastructure quickly pays for itself. It’s great to hear that wi-fi is merely in a transition, and not in a decline. Here’s hoping city governments are smart enough to retain enough control over the new wi-fi systems.
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