It is sad to see the coincidental announcements and raft of articles over the last month regarding the fate of city WiFi systems that were to be deployed in cities both big (San Francisco, Philadelphia) and small. The storied history of municipal WiFi systems goes back several years, and if there is one takeaway, it is this: this is a dead-end approach to our broadband issues in the US, and deserves a lot less public focus than it has garnered.

Let’s start with some background. The first (and most successful) WiFi-based systems in the US were the numerous WiFi networks built to serve rural and resort communities, who were struggling to find an alternative to either the poor man’s internet (dial-up), or the high priced satellite-based internet connections, who offered “midband” download links, complemented by a dial-up backhaul. Now, there was lots of hard work to bring these satellite solutions to market (we had one at GE Americom that we later sold to Gilat), but the customer premise equipment (CPE) costs were close to a thousand dollars, and the ongoing charges of $80-$120/month made it a really expensive solution to broadband-enable underserved markets. As such, it has remained a niche solution.

Stepping into this void were a number of local entrepreneurs using a combination of homebrewed and commercial gear to establish their own wireless networks, using the unlicensed spectrum that WiFi employs (2.4Ghz), and antenna technology that allowed long distance point-to-point communications. This is a critical design element to highlight: distance was achieved through focused signals, which was possible since the endpoints were well known (e.g., Farmer Smith’s antenna). It was an incredible grass roots success story, with 5,000+ WISPs (Wireless Internet Service Providers) created in a four year timeframe.

Entrepreneurs looked to see if the same leverage of the free 2.4GHz spectrum could be applied in more densely populated suburban and metropolitan locations. A number of companies sprang up. These included hardware companies like Tropos, Strix Systems, and BelAir Networks, as well as larger-scale WISPs like Clearwire Communications (started by Craig McCaw’s team).

Most of the solutions deployed used a technology called mesh networking, which allows for smart routing across a number of nodes to the best “backhaul” node (which was often connected to a high-speed terrestrial link to the WISP’s central node). This mesh technology was attractive on a number of levels. It allowed:

• Lower costs means for aggregating the traffic from different houses
• Simpler field installation
• Simpler topological design (remember, radio is a black art in some ways)
• Most importantly, ability to use “free” unlicensed spectrum for large portions of the network.

We looked at the technology closely at AOL. Could this allow us to offer cost-competitive broadband service to the US metropolitan markets? We installed test beds from two manufacturers to give us a first-hand view of the promise versus reality of the technology. We found that the performance of the connected homes was really not the right basis for a competitive broadband offering, both in terms of overall throughput (best classified as “midband”) as well as the day-to-day variance of throughput (no-one would want a connection where their performance varied 50+% from best to worst day).

So what are the real killers of municipal WiFi efforts in the US? There are 5 big factors that make these efforts a non-starter:

Rain, Snow, and Leaves

The unlicensed spectrum was a great catalyst for innovation (props to the FCC on that one), but it is innovation best applied to a select class of problems (in-premise communication and point-to-point non-urban communications). The 2.4Ghz spectrum is more prone to signal issues outdoors, where its biggest enemies are foliage, rain, and snow. This may be fine if you live in Vegas, but for all of the other big markets, it creates a service that isn’t competitive to cable or DSL (or even dial-up), from a quality of service perspective.

FYI, one reason the upcoming 700Mhz spectrum auction is so exciting is that because it is lower frequency spectrum, it is a great outdoor-friendly data solution. Best of luck to Google (and maybe Apple ) in the upcoming auction – I love to see non-traditional entrants!

Who owns the telephone and light poles?

In planning these efforts, you run into complexity upon complexity. One thing we ran into in pursuing one of these muni WiFi efforts was the issue (and pricetag) of getting access to streetlights and telephone poles to mount and power our mesh transceivers. This was just symptomatic of a larger issue. Everywhere we turned, someone had their hand out, making the costs creep up month after month, and increasing the logistical complexity of a fast rollout.

The cost and hassle of dealing with CPE costs and installation

The in-house equipment requirement included (at a minimum) a more sensitive antenna to be installed in the best location in a house/apartment to “talk” to the nearest mesh node, and, in addition, most vendor solutions also had their own higher-powered access points they required. Now you had the recouping of a material CPE expense to work into the overall economics, as well as the actual installation expense. It was also a real crapshoot in estimating how many actual truckrolls you would require per 100 houses in a large urban deployment, given the issue of getting the most out of the low power transmitters the FCC allowed in the 2.4 Ghz spectrum.

Incumbent pushback

In each major city, the incumbent phone company (ILEC) and cable company (MSO) are usually material local employers. In addition, each spend ungodly sums as part of their annual lobbying efforts. Any new entrant looking to establish an overlay network in their markets using “free” spectrum got these giants’ hackles up in a major way, and the back and forth negotiations with the involved city involved, at a minimum, lots of time, and sometimes, onerous terms and conditions imposed on the winning WISP.

Too little bandwidth, too late to matter

Ultimately, the use of these mesh WiFi solutions was the wrong tool for the job. A midband solution isn’t that compelling an offering, in our YouTube-obsessed world. Couple that with coverage and quality of service issues, and it just isn’t the right thing for cities to focus on as a tool to bridge the digital divide.

With unlimited data plans on 3G networks approaching the $20-30 range, and promotional DSL and cable data plans sub-$20, whatever cost advantage these networks envision just isn’t a reality.

Do we have a need to form a more competitive broadband strategy for the US? Yes, but it seems like there are much better paths (WiMax, etc.) for us to focus upon. It is time for the major cities to tone down the PR on these dead-end solutions, and work to come up with a new playbook that can bring broadband to the widest segment of their constituency at the right price.