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San Francisco WiFi Proposal Out on a Tech Limb

Posted on: Friday, 19 August 2005, 21:00 CDT

Aug. 19--San Francisco Mayor Gavin Newsom got nationwide publicity last year by marrying gay couples in City Hall, but now he's launching a crusade he regards as even more controversial: building a high-speed wireless Internet system offering low-cost service to residents.

Newsom called a news conference Tuesday afternoon in the children's section of San Francisco's main public library to announce "TechConnect," described as "a new citywide initiative for universal, affordable, wireless broadband access."

TechConnect would compete with DSL service from SBC and cable modem service from Comcast, which already provide wired broadband access throughout the Bay Area for $25 to $60 a month.

Newsom first raised the possibility of such a city network last October in his annual State of the City speech.

"I made an announcement, just a little thing . . . and I couldn't believe the response across the country," Newsom said Tuesday. "I mean people were outraged, they were livid, they were putting (up) Web sites demanding to get rid of this mad mayor.

"Forget gay marriage, that was easy compared to the concern that people have about the world's culture coming to an end because these big companies may be challenged by small little towns like ours with big hearts."

This makes for great political theater, but for the sake of San Francisco residents, I hope the mayor is only grandstanding.

Municipal wireless systems are turning into this year's tech bubble, with manufacturers making lots of promises and boosters glossing over numerous engineering hurdles. Delivering Internet service is much more complicated than piping in tap water or picking up garbage, and cities could easily get overwhelmed with unproven equipment.

Some big projects are nonetheless moving forward.

Philadelphia this week narrowed the field of bidders to two -- teams headed by Hewlett-Packard and EarthLink -- to build a citywide network. The Philadelphia project so riled Verizon, the phone company for much of Pennsylvania, that it bullied the state Legislature into passing an awful law last year banning any other city in the state from building such a system.

On Thursday, Intel held a teleconference with reporters to tout a program called Digital Communities, where Intel engineers are helping cities from Taipei to Cleveland to Jerusalem in designing municipal wireless systems.

These systems use WiFi, the same technology found in many notebook computers, in wireless home network gear and at hotspots in Starbucks coffee shops and public spaces such as San Francisco's Union Square.

WiFi base stations, inside weatherproof cases installed on light poles, can deliver high-speed Internet service inexpensively throughout residential neighborhoods -- at least in theory.

Some cities are interested in these networks for use by their employees, such as meter readers, building inspectors, police officers, firefighters and emergency medical technicians. These networks are less expensive to build and maintain than projects that would also serve residents.

The reason cities give for wanting to provide home service is that today's broadband duopoly of DSL and cable keeps prices artificially high.

But it's not clear whether wireless can significantly undercut duopoly prices, at least not without taxpayer subsidies.

JupiterResearch, a technology analysis firm, issued a grim prediction in a June report:

"Developing and maintaining a municipal (wireless) network is costly, at an average of $150,000 per square mile over five years. On this basis, nearly 50 percent of initiatives will not break even with a benefit stream of $25 per user per month. . . . Initiatives will fail on unanticipated complexity as well as unmeasured and unachieved economic development goals."

Just before the report came out, SBC announced a promotional rate for DSL, with one year of service at $14.95 a month for new customers -- low enough to undercut any city program aiming to charge $20 or $25.

The broadband duopoly is also about to get lots of competition.

MetroFi of Mountain View is building privately financed wireless networks in Silicon Valley, with home service at $19.95 a month already available in Cupertino and Santa Clara. Service is coming to Sunnyvale in September and Mountain View in October.

Chuck Haas, MetroFi's CEO, told me Thursday his company will submit a proposal to San Francisco and is willing to cover the entire city out of its own pocket.

Intel, meanwhile, is advocating a new wireless technology called WiMax that could ultimately prove cheaper and faster than WiFi.

At Tuesday's news conference, Mayor Newsom said, "We have to either find a partner to do it, or we're going to have to write a big check."

Let's hope that's more grandstanding. The best thing San Francisco can do is invite as many private companies as possible to build networks, rather than threatening to spend tax money in ways that would only slow down the free-market process.

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Copyright (c) 2005, San Jose Mercury News, Calif.

Distributed by Knight Ridder/Tribune Business News.

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SBC, HPQ, ELNK, VZ,

Source: San Jose Mercury News

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