A city of around 44,000 in the coastal hills north of Santa Barbara, Lompoc, Calif., boasts many of the attractions that make the Golden State so appealing to millions of migrants: sea breezes, a relaxed way of life, great surfing, and so on. It also has one of the country's oldest municipal wireless networks, a project begun way back in 2004 and completed last fall. As such, Lompoc has enjoyed the benefits (and suffered the pitfalls) of being an early adopter.

In many ways Lompoc epitomizes the promise and the problems of municipal Wi-Fi. Built out by Pacific Coast Cabling using access points from Tropos Networks and Motorola Canopy backhaul gateways, the network now covers around 95% of the city's six square miles with high-speed Internet connectivity. Subscriber growth, however, has been slow to say the least. As of earlier this month, according to a report in the Lompoc Record, the network had 281 subscribers, far below the 4,000 needed for financial viability, or so said a 2003 study by McKibben Consulting.

From a technological standpoint, said Steve Blum, head of Tellus Venture Associates, who consulted on the project and currently serves as the interim wireless services administrator for the city of Lompoc, "the network is working fine." As for the business side, Blum said, "I would not characterize the level of subscribers right now as where we want to be or will be."

The main problem is competition. When Lompoc started considering a wireless network, in 2003, half the town had no Internet access and the other half had unreliable and slow DSL service from Verizon. The Internet access situation, said Blum, was "completely inadequate," and the decision to move forward with a city network was based on demand, expressed loudly and in person, from residents.

Then, once construction got under way, competition began appearing as if by magic.

"In December of 2004 the radios from Tropos were hung on light poles for the first time," recalls Blum. "Within days of that occurring, Comcast trucks showed up pulling fiber-optic cable. It was purely a coincidence, they said."

Verizon also quickly started offering high-speed, more reliable DSL service. By the time the city's system first went live in 2005, Lompoc citizens had three alternatives for residential broadband service.

The Lompoc network, said wireless consultant Craig Settles, author of the book Fighting The Good Fight For Municipal Wireless, "reflects the problems with cities that bank on a general consumer play to make the numbers work: If you're selling inexpensive access, and trying to make money off of it, it's very tough. That's the weakest possible avenue to a successful and financially viable network."

Lompoc has responded by dropping its rates from the original $20 a month to $9.95 for basic outdoor Wi-Fi hotspot service, and a premium $15.99 service that includes a bridge router to boost the signal for indoor coverage, plus technical support to make sure the network works inside homes and businesses. Those moves, of course, could boost subscriber numbers while reducing revenue per subscriber -- leaving the city no nearer its goal of breaking even on the service.

Perhaps more importantly, Lompoc is planning a trial of its first application for municipal service, to read parking and water meters. Such public service applications, many analysts say, will become the real backbone of municipal wireless networks, rather than the consumer Internet-access offerings they were first conceived for.

In any event, Blum said, the network will benefit Lompoc's citizens -- even if they don't sign up.

"Where before we were contemplating being the only broadband provider in town, we're now in a competitive environment and we're very happy to be there. The end result is going to be to the benefit of everybody in Lompoc."