Metro Wi-Fi: RIP?

There's nobody I know who's done a better job of tracking
the metro Wi-Fi market than Glenn Fleishman, whose Wi-Fi Net News web site is a
great destination for people interested in wireless news analysis. That doesn't
mean I've always agreed with Glenn, especially at the intersection of wireless
technology and public policy.

Back in February, 2005, Glenn blogged about a
point-counterpoint article I wrote along with David Haskin, whose Mobile Pipeline
website was a venue for some of my writing. The topic was municipal broadband
and the role that metropolitan Wi-Fi networks were playing. At the time, I was
arguing that most metro Wi-Fi projects were ill-conceived and unlikely to
succeed. Because incumbent service providers were making similar arguments (but
for different reasons), I was accused by some of being a shill for entrenched
interests. I even received e-mails suggesting that I was being paid by one of
these companies to write my columns. Rest assured, the only
financial transactions that have ever taken place between myself and a service
provider is when I pay my bill.

Unlike some analysts who opposed metro Wi-Fi based on
arguments that it was unfair for government to compete with the private sector
(the arguments were similar to those currently being waged about the public
option in healthcare reform), my primary argument against these systems was
based on the limitations of the technology and the lack of viable business
models. Wi-Fi is fundamentally a small-cell LAN technology. While it is
technically possible to build metro-scale Wi-Fi networks, it's not easy to do,
requiring much greater cell density than traditional cellular systems or
emerging 4G systems, especially if indoor coverage is a goal.

Greater cell
density translates into higher costs, both for build-out of the network and
also for backhaul services from the Wi-Fi mesh nodes to the Internet. And since
Wi-Fi uses unlicensed spectrum, it is virtually impossible to offer reasonable
service guarantees, especially in densely populated areas supporting thousands
of private Wi-Fi networks. The clincher lies in the fact that most people
equate Wi-Fi with "free," so even if these companies were able to build out a
reliable network, people aren't willing to pay for it.

Glenn continues to write about metro
Wi-Fi companies abandoning the business and networks being shut down. Last
week, he chronicled the adventures of Longmont Colorado, analyzing a recent
article by Craig Settles, founder and president of successful.com and a long-time
proponent of metro Wi-Fi. Longmont found itself the owner of an orphaned metro
Wi-Fi network when its business partner Kite Networks went belly-up. Now
Longmont has to decide what to do with it. I have a suggestion: cut your losses
and sell the equipment on eBay. Continuing to invest in this kind of network is
highly unlikely to benefit the citizens of Longmont. Truth be told, based on
personal experience, I have my reservations about the ability of municipal
governments to run customer-facing broadband networks, but even if the network civil
servants of Longmont are special, it's still the wrong technology.