It was announced yesterday that EarthLink won the contract to build Philadelphia's municipal Wi-Fi infrastructure.
"Earthlink is going to be putting up the financing, and there will be a revenue stream that comes to Wireless Philadelphia so we can do our digital divide programs," [CIO Dianah] Neff said.And today, there is positive coverage on the front page of the Washington Post's Business Section, but Dan Rubin of Blinq points to a warning [1.5MB .pdf] from Balhoff & Rowe, LLC, a financial and regulartory firm.
The Balhoff & Rowe report warns:
The wireless models are frequently based on high penetration rates which are unrealistic; for example, Philadelphia sets a first-year market penetration rate of 13% in Philadelphia, which appears to be an unrealistic goal since the annual change in the national penetration rate is running about 7.5%, and the statistic suggests that the city will take all the incremental growth plus nearly the same amount of share from the incumbent carriers;
...
Using more realistic assumptions about the number of wireless nodes required as capacity expands, the City of Philadelphia may need to spend $35 million+ in capital alone during the project’s first five years.
The municipal Wi-Fi initiative is not solely a Philadelphia project. Other cities have also started to jump to initiate a plan for their own residents [WaPo]:
According to Free Press, about 300 municipalities around the country are undertaking broadband experiments, but only a few dozen are doing full-scale networks like Philadelphia's. On Monday, San Francisco said 26 companies, including EarthLink, Google Inc. and Cingular Wireless LLC, had submitted proposals to build its planned wireless network, which will cover roughly 47 square miles.
Philadelphia's initial Cloud Network stretching from Boathouse Row to City Hall/LOVE Park along with more pockets in Headhouse Square, Reading Terminal and the Convention Center, Independence Hall, among other areas outside of Center City, has been going on for over a year now. I've used the Cloud over at Logan Square, it's a simple process of a one-time logging into the system and that's it. I haven't tried it elsewhere yet [I have my own network at my apartment].
More from around our region and the web
Daily News interview with Earthlink executive Donald B. Berryman:
DN: Why is Earthlink agreeing to finance construction and maintenance of Wireless Philadelphia?Berryman: We suggested this as an alternative bid when we submitted our proposal. We thought it made more sense for an Internet-service provider to design, build and own the network. We could manage it to profitability and bring on additional subscribers and applications.
We also thought this was the best way for Wireless Philadelphia to get computers and training for low-income households. They wouldn't have to be concerned about raising money to build the network.
SFGate.com: Philadelphia Picks Earthlink for Wi-Fi:
The Wi-Fi network in Philadelphia is about the same as the one San Francisco is considering, though San Francisco is about a third of the size of Philadelphia. San Francisco has set out similar goals to cover the entire city, providing in-home service as well as roaming and portability capabilities.As a result, EarthLink said it will pursue a similar model in San Francisco. But the field in San Francisco will include new competitors with different business models, including Google, which plans to blanket the city and offer basic 300 Kbps for free.
The Philadelphia deal may give San Francisco leaders insight as to how to proceed with their municipal Wi-Fi program.
PCWorld: Philadelphia Picks Earthlink for Wi-Fi
ZDNet: Meet Earthlink: brainy, brash and utterly fearless
eWeek: Philly's Wi-Fi Contract May Be a Lifeline for EarthLink
PennLive: Wireless Philadelphia found deal hard to refuse, but risks abound
Metroblogging Philly: Philly's Got Earthlink: After being named "America's Next Great City" and Hosting Live 8, and now this? Philly's got it going on. Go Philly!
Philly Future's community interview with Dianah Neff, CIO of Philadelphia.
