The IEEE 802.11n network from Ruckus Wireless is designed for outdoor public use, with multiple antennas and beam-forming mechanisms to get around obstacles. It will be implemented by system integrator SmartWave Technologies.

For municipal employees, the network will be secured, and the city also wants to make deals with local companies to use it as an extension of their own networks, Sammeta said. Another revenue possibility may be deals with mobile operators to offload traffic from their cellular networks. But the plan doesn't rely on making those deals, he said. "We're not hanging our hat on it," Sammeta said.

San Jose's new system will replace a series of public hotspots that the city set up with partner MetroFi in 2004. Those networks were supported by advertising, but the arrangement fell apart when went out of business in 2008. The annual $22,000 operational cost for the single new network will be about equal that of the old hotspots, Sammeta said.

Most local governments that tried or explored an ad-based network eventually rejected that approach because they didn't want to be in the advertising business, said Craig Settles, an independent broadband analyst who has watched the municipal Wi-Fi movement closely. Even if they outsourced advertising to a third party, governments could be left with headaches if that company failed, he said.

Instead, most of the newer Wi-Fi projects are being justified in the same way as San Jose's, through the things that a robust wireless network helps the government do, Settles said.