"I expect them to fail," said Michael Balhoff, managing partner of Balhoff & Rowe LLC, a think tank and advocacy firm focused on the telecommunications industry. And with that failure will come risk to taxpayers, Balhoff added.
Esme Vos, editor of MuniWireless.com, a site that covers the municipal wireless movement, disagreed just as vehemently, claiming that the strongest muni Wi-Fi opponents, the incumbent telecommunications companies, just want to protect their business interests.
"They want to control the network," Vos said. "In most municipalities, it's cable and them. They don't want a third entity to build a competitor. They just don't like competition."
A number of smaller municipalities already have wireless networks in place, and construction is under way on networks in some big cities, such as Philadelphia. In fact, municipal wireless networks are being built -- or soon will be -- in about 300 U.S. municipalities, according to Vos.
The three most heatedly debated issues in the muni wireless debate are 1) Should government be involved in such projects, or should they be left to the private sector? 2) Are taxpayers at risk? and 3) Is wireless technology up to the task?
Vos and Balhoff provided their strong opinions on these issues in two separate interviews.
Should government do this?
Perhaps the most hotly debated issue related to muni Wi-Fi is whether government should be involved in such projects. Supporters such as Vos say muni Wi-Fi is no different from other utility services offered by municipalities, such as trash pickup or water. Plus, it's the municipalities' duty to provide such services when other service providers don't, Vos claimed.
"There's a digital divide," Vos said. "In New York City, large areas of the Bronx and Brooklyn don't have broadband or cable because the residents are poor. If the city wants to redevelop a poor area, how do you attract a real estate developer or tenants if there's no broadband? It would be like attracting people if there are no roads. You'd never attract businesses to these areas without broadband."
The lack of available broadband means a lack of opportunity for those who live in such neighborhoods, she added.
"If your family doesn't have or can't afford broadband, and your classmates who can afford it sit at home and do their research on the Internet, you're missing out and not learning on a lot of skills," Vos said.
Opponents like Balhoff don't believe cities have an obligation to provide such service.
"It's political posturing at its worst," Balhoff said. "There are ways to decide whether you'll subsidize people who live in certain communities or provide them with free technologies rather than saying you'll provide it across the entire population of the city."
Besides, he added, broadband prices already are low.
"Verizon offers DSL service in the same speed range [as municipal Wi-Fi] for as little as US$15 a month," Balhoff said. Just as important, he said, is that it just isn't right that governments are competing with private business.
"If these types of operations were compelling financial projects, then you'd have a rush of entrepreneurs putting in these types of services," Balhoff said. "That's the nature of the capitalist system we're part of. The fact that you don't see any carrier-class entities or even entrepreneurs rushing into this space means you should beware."
Taxpayer risk?
Vos and other proponents say there is little risk to taxpayers for two reasons. First, Vos claimed that public networks would pay for themselves even if the only subscriber was the city.
"The cities plan to use the network not just for public access but also for their own purposes, like public safety," she said. "Any employee who goes out is more efficient and saves the city money if they're on a citywide network. They can check records or file forms without returning to the office -- that sort of thing. Public employees become more efficient and the cities can cancel T1 lines, which is one reason why the [incumbent telecoms] aren't happy."
Second, in most cities, the financial risk is being assumed by third parties, Vos said. For example, EarthLink Inc. is paying the cost of installing the wireless network in Philadelphia. EarthLink gains access to city-owned utility poles but is getting no direct subsidies from the city, Vos said.
"There's relatively little risk [to taxpayers], because in that model, the city doesn't spend any money," Vos said. "They put out public tender and ask somebody to bear the cost." Providing access to city-owned assets like utility poles is necessary to keep the price down, Vos said.
In addition to selling access, EarthLink also must keep the network open so that other providers can sell access. That makes EarthLink both a wholesaler and retailer of access services. That helps EarthLink, and it helps ensure a competitive atmosphere for connectivity, Vos noted.
Balhoff says that despite appearances, there is risk to taxpayers.
"If it's so attractive for EarthLink to absorb the entire risk, why wouldn't they go in there without the headache of aligning themselves with the city of Philadelphia?" he asked. "Instead, it gets a partial endorsement from the city, and there are financial advantages that will accrue to EarthLink that, in effect, use taxpayer dollars and potentially create conflict of interest."
One concern should be what will happen if entities like EarthLink don't make enough money, Balhoff said. He stressed that the subscriber projections he has heard for Philadelphia are overly aggressive, and if subscription numbers aren't met, EarthLink's commitment could waver.
"They'll back away or cut their investment," Balhoff predicted. "The city believes it has gained an agreement with EarthLink to achieve certain public policies for effectively no financial risk. That's what's been presented to the press, but the reality is that EarthLink would not do something like this unless the risk was mitigated."
Is the technology up to the task?
The two sides in this debate also disagree about whether current technology is up to the task. For the foreseeable future, these projects will use Wi-Fi mesh technology, which creates a single large network using a series of special Wi-Fi access points placed strategically around the city, mostly on utility poles.
"This technology is fundamentally unproven right now," Balhoff said. "We don't fully know how satisfactorily the mesh networks will be able to cover the territory. We just don't have sufficient information. Keep in mind, I come from the financial industry that has watched a lot of promising technologies fail."
One big question, Balhoff and other critics claim, is whether the plethora of Wi-Fi networks operated by homes and enterprises will interfere with the public networks. Vos was optimistic that there wouldn't be severe technical problems but agreed that there isn't yet enough experience with large networks to know for sure.
"The network in Tempe, Ariz., is, to my knowledge, the biggest network up and running," she said. "I've heard conflicting reports. But keep in mind that it's like any wireless technology, and all wireless has issues. You walk down the street in the financial district of San Francisco and there are [cellular] dead spots. People don't expect perfection."
More important, Vos said, is that the technology will improve over time and can be upgraded. For example, the plan in Philadelphia is to eventually upgrade to mobile WiMax when that technology becomes viable, she noted.
What the future holds
The incumbent telecom operators initially lobbied hard, but with limited success, for state laws limiting the ability of municipalities to sponsor networks. Those efforts have since died out, Vos said.
"I wouldn't say [the incumbents] have given up, but they realize they couldn't win on a state-by-state level and have taken it up on a federal level as part of the rewrite of the [federal] Telecom Act," Vos said. "That's temporarily shelved for now, so they're re-evaluating."
Vos pointed to signs that the incumbents may be taking an "if you can't beat 'em, join 'em" approach. In particular, she noted that AT&T Inc. recently won the contract to install a municipally sponsored citywide Wi-Fi network in Riverside, Calif. In its press release, AT&T called the Riverside project its largest citywide Wi-Fi deployment "to date," implying that more such projects were anticipated.
Vos sees additional trends emerging, such as multiple municipalities working together for even larger Wi-Fi networks.
"We've moved from downtown hot zones to citywide and even countywide networks," she said. For example, Suffolk and Nassau counties on Long Island, N.Y., have put out a joint request for proposal for a single network to cover both counties, she said.
Whether you agree with municipal projects or not, they are becoming a reality. Whether they become successful, however, will be hotly debated for some time to come.