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11/17/2006
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Even With Microsoft And Google On Board, City Wi-Fi Projects Have A Lot To Prove

More than 300 cities have or plan to have Wi-Fi networks. But the business models and even the technology still are being ironed out.

Everyone wants a piece of the municipal Wi-Fi market--even though no one is entirely sure how this business will turn out.

Microsoft entered the market last week as a partner of MetroFi, a wireless Internet access provider, for a Wi-Fi network in Portland, Ore. The pitch is that residents can get free access in exchange for ads served up by Microsoft or pay for an ad-free version. Google is considering a similar model for a Wi-Fi network in San Francisco, where it's partnering with EarthLink.

Corpus Christi built it. Now it needs a partner to run it.

Corpus Christi built it. Now it needs a partner to run it.
Microsoft plans to offer locally relevant MSN content and services, including weather, news, and local government services, as well as restaurant, nightlife, and movie listings. Like many city Wi-Fi efforts, this one starts small; the companies expect to have it available in Portland's downtown by year's end, but probably not across the city until 2008. The service will let users search for addresses or businesses and show those locations on a map. Advertisers will use Microsoft's adCenter platform to reach Wi-Fi users.

Many cities are getting municipal Wi-Fi plans rolling. In the United States, 154 cities, from Philadelphia to Chaska, Minn., have Wi-Fi networks across some span of the metro area, says Roberta Wiggins of the Yankee Group. Another 132 have networks under construction or proposed. Abroad, Taipei, Taiwan, has the most ambitious project, trying to cover 105 square miles in a wireless mesh. London, Paris, and Moscow have smaller-scale projects under way, and New York City is deploying Wi-Fi across its largest parks. If people in hundreds of cities really do get free, widespread Wi-Fi service, it has the potential to change how and where we use the Internet.

But first it has to be proven that muni Wi-Fi works. From a technological standpoint, early attempts show that deploying and maintaining a network of acceptable quality is a challenge. The model of ad-supported Web access is a leap into the unknown, and Wi-Fi technology could be leap-frogged by the increasing data speeds of cellular and eventually WiMax, which promises speed and coverage advantages.

The Latest Microsoft Vs. Google Battle
Microsoft's advertiser-supported Internet service in Portland initially will be available in the city's Pioneer Courthouse Square. MetroFi, which has agreements with 13 other U.S. cities to design, build, and operate municipal Wi-Fi networks, will build Portland's network and plans to offer an ad-free service for $20 a month. Within 10 to 24 months, the Wi-Fi network is expected to cover 95% of Portland, home to more than half a million people. Microsoft considers Wi-Fi "a natural complement to its focus on building software services," says Stefan Weitz, director of planning at Microsoft's MSN division. "We view this partnership as an opportunity to learn from how our advertisers and MetroFi customers benefit from the locally relevant content and ads," he says.


If it's Taipei, it must be Wi-Fi -- Photo by Richard Chung/Reuters

If it's Taipei, it must be Wi-Fi

Photo by Richard Chung/Reuters
And to make sure Google doesn't know something Microsoft doesn't. Google and EarthLink--one of the biggest service providers in muni Wi-Fi--in April won the bid to build a Wi-Fi network in San Francisco. Google won't say what services it will offer as EarthLink's anchor tenant, though it will likely involve serving up ads to users depending on their location and their search content. But Google won't place ads that greet users as they sign on. Before construction can begin, the two companies must negotiate a final contract with the San Francisco Board of Supervisors.

Google and Microsoft don't have the muni Wi-Fi market to themselves. In October, AT&T received approval for its first Wi-Fi network, which will provide free high-speed wireless Internet access throughout Riverside, Calif. AT&T plans to sell ads on the network's logon page and offer several plans based on access speeds. Cisco Systems and IBM, meantime, are part of a group called Metro Connect, which in September won the right to build a Wi-Fi network across four counties that make up Silicon Valley (beating, among others, MetroFi). With the help of Internet service provider Azulstar, they'll offer tiered services, from free access limited by connection speed and duration to paid voice- and video-quality services. Construction should start by year's end but will take years to span the valley's 1,500 square miles.

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It's remarkable progress for a movement that really only began in the last two years, when several U.S. cities saw free or cheap Wi-Fi as a way to overcome the "digital divide" that keeps low-income residents from getting online. More cities have followed with visions of spurring economic development and tourism. Some are now moving beyond pilots to offer services for residents, businesses, and city workers.

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