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Will Plug Be Pulled on Long Island Wi-Fi Plan?

July 28, 2008

By Reid J. Epstein, Newsday, Melville, N.Y.

Jul. 28–Long Island’s ambitious and belated Wi-Fi network is teetering on the price of a pole.

Negotiations between E-Path Communications, the fledgling Tampa Internet company with an agreement to build the network, and the Long Island Power Authority are stalled, people with knowledge of the situation said, because E-Path believes it should pay $9.68 a year in rent for each LIPA pole to which it attaches its equipment, while the utility wants $50.

The difference is based in differing interpretations of what kind of company E-Path is. LIPA considers the outfit a wireless venture, which pays $50 per pole. But privately held E-Path calls itself a telecommunications operator, which pays $9.68 each.

Extrapolated over the 20,000 poles necessary to build the proposed Islandwide wireless Internet network, company officials say the $806,400 annual difference would likely be fatal to the project’s chances, which are already imperiled by the slumping economy and the reality that no large Wi-Fi project has succeeded without a significant public investment.

“If we pay $50 and somebody else comes in as a telecom company and pays $9, we can’t compete,” said E-Path chief executive Joe Tortoretti. The industry standard for Wi-Fi networks is from $5 to $10 per pole, though cities that own their own utilities often give the access for free, according to Glenn Fleishman, the author of Wi-Fi Networking News, a Wi-Fi blog.

LIPA argues that E-Path fits none of the criteria of a telecommunications company. It doesn’t string fiber or wires from pole to pole, as Cablevision or Verizon do, and it is not licensed by the state Public Service Commission, as is required of telecommunications firm.

E-Path wants to be classified as a telecommunication operator because such firms are eligible for the regulated rate of $9.68, which is charged to telecoms like Cablevision under state law. But LIPA can charge what it says is the local market rate, $50, to wireless companies.

“E-Path wishes to be treated as a telecommunications provider, when in reality it is an information services provider,” LIPA spokesman Ed Dumas said. “We want to help facilitate the Wi-Fi goals envisioned by the counties, but we cannot ignore the regulations and grant unlicensed access rights to the firm.”

Tortoretti said his Washington, D.C., attorneys disagree with LIPA’s interpretation. But the attorney Tortoretti said represents E-Path, Charles Rohe, said he couldn’t speak about the company or the dispute.

Suffolk officials have stayed out of E-Path’s negotiations with LIPA, and the county and residents who were promised free Internet access still are waiting for a deal that officials now admit privately is unlikely.

Even Suffolk Legis. Wayne Horsley (D-Lindenhurst), who has been the project’s biggest cheerleader, admitted it is in difficult straits.

“Unless we get these agreements very soon, I think it could be in trouble,” he said.

In Nassau, where E-Path pledged to build a pilot project in Eisenhower Park, the situation is also muddled. E-Path has yet to reach an agreement with Nassau to build a network, as it did with Suffolk April 15.

Robert Checca, Nassau’s information technology director, said he is waiting for E-Path to sign a deal with LIPA. Dumas said the utility is waiting for E-Path to come to terms with the county before signing a Nassau agreement.

In Suffolk, Neil Toomb, an aide to County Executive Steve Levy, said the county, which initially planned for a pilot project along Route 110 in January, is ready to give E-Path a deadline.

“We really need a drop dead date from them,” he said. “When do they think they’ll be able to do it by?”

Such a discussion could take place Tuesday, when Tortoretti has meetings planned with Suffolk officials in Hauppauge to discuss the issue. The chief executive said he hopes the county will help with his LIPA dispute.

Toombs, however, said, “That’s not really our issue. That’s out of our control.”

And there is still the question of whether large-scale Wi-Fi efforts are viable. Projects in Philadelphia and San Francisco are on the verge of failure after much-hyped debuts. E-Path, which has yet to complete a Wi-Fi network, had a contract terminated by Delray Beach, Fla., after the company missed a series of deadlines, and saw a project in Trenton, N.J., die when the city council pulled funding E-Path requested.

The only successful large municipal Wi-Fi project is in Minneapolis, where the city invested millions of dollars to build the network and serves as its anchor tenant. Nassau and Suffolk have refused to invest in the project or consider anchor tenancy, though Suffolk spent $60,000 to write the project’s initial request for proposals.

Craig Plunkett, who has built small, private Wi-Fi networks on Long Island and in New York City, said the market for large-scale Wi-Fi projects is bleak, especially with retailers such as Starbucks now offering free Internet at its stores.

“I don’t see how they’re going to make money without an anchor tenant,” Plunkett said. “And if the county does sign up … they’ll have to rebid the whole thing.”

THE ISSUE

Negotiations for Long Island’s Wi-Fi network are stalled — over the price E-Path should pay to put its equipment on LIPA poles.

$9.68

What E-Path believes it should pay per pole

$50

What LIPA believes E-Path should pay

—–

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Copyright (c) 2008, Newsday, Melville, N.Y.

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