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Municipal WiFi Costs Outweigh Benefits
TheSync writes "JupiterResearch claims that muni WiFi costs outweigh benefits. It can cost up to $150,000 per square mile over five years, which may not even provide each user a benefit of $25 a month. They suggest that such projects only be taken on as public-private partnerships."
First, the article says the average cost is $150,000, not up to $150k.
Second, it says an assumed $25/month benefit, not that it's not even $25/month. Also, Internet access costs me $40/month, so...
Third, it says the first five years, which includes all manner of infrastructure creation. Even a major network upgrade would likely cost less later on, because you don't have to find locations, put up towers, etc. I'd like to see the per year estimates, but I'm not subscribed to Jupiter's service.
If your town/city is going through the work and effort to build this manner of network, hopefully someone is going to notify your citizens and try to get them onboard. By Jupiter's reckoning, it takes an average 100 users per square mile to cover the costs. Now, if your city/town put any real effort into this project, you'd probably let people know that free Internet access is a $40 network card away. Get local computer stores to stock up on the cards and ask them to chip in on an ad campaign. They can offer a flat-rate installation service (with caveats for running into problems, etc)
That what was all this school was for... to teach us how to solve our own problems. -- janeowit
ive heard the same said about public transportation a few times, and im sure it was said about the power system(which is municipal, at least in some areas)
Until you get a fabric network that covers multiple square miles per basestation (a la WiMAX) You'll not see a municipal implementation over a metro area.
Sure there are exceptions (where town.size approaches zero) or (starbuck.count approaches infinity) but this is just the economics catching up with the technology.
If you've got a connection at home, and you've got a connection on the Bus, and you've got a connection via your cellphone, and yuo've got a connection via your coffee shop, why does a city have to be 100% covered by 802.11a/b/g? GPRS/EDGE/3g/future can (and initially will) pick up the slack.
"Draco dormiens nunquam titillandus."
Honestly, wi-fi in general needs to work better before people are going to use it exclusively. We just stopped using our town's free wi-fi because it sucked. And, I stopped using it in my house a few months back, also. I've never seen a solid, stable, fast wi-fi implementation. It's fun and cute for people checking their email quickly at Starfucks, but wi-fi still isn't there (from everything I've seen) for a regular, dedicated connection.
Hear me before it is too late! SHUN the evil of the Three P's, Public Private Partnership! Turn ye either to the left, to publically funded projects, or to the right, to the blessed land of private enterprise -- but walk not the middle path, the path of the Three P's!
Once, this land of England was fair and pleasant, with mighty Industry and caring Government working hand in hand! Then came the Three P's! They promised us cost savings and social responsibility, but they delivered nothing -- nothing save gigantic invoices and permanent damage to the environmental and social fabric of the nation!
Turn aside, oh turn, I beg you, America, from this path of wickedness! For the evil of Bloated Government Inefficiency is in them, and the sin of Greedy Private Contractors they likewise have! And the private half shall spend, yea spend and spend, and the public half will know not nor care where the money has gone!
Repent therefore, repent before they do unto you as they have unto Europe!
My words have the semblance of jest, but the danger is deadly serious.
Whence? Hence. Whither? Thither.
Remember that the research firm is part of Jupitier Media. A company which includes the following branches:
"The ClickZ.com Network offers cutting-edge commentary on Internet marketing and advertising from industry leaders as well as original case studies and unique insight.
The Graphics.com Network provides creative professionals with tutorials, news on the latest technologies, and community forums and galleries to display their work.
The internet.com, EarthWeb.com, DevX.com, ClickZ.com and Graphics.com Networks appeal to advertisers and vendors because they provide a community that only delivers information technology, Internet industry and creative professionals, 83% of whom make or influence technology purchasing decisions. Among our advertisers are some of the best known names in information technology and the Internet industry, including Computer Associates, Dell Computer Corporation, International Business Machines Corporation, Google, Microsoft Corporation and Oracle Corporation. " (Copied from their "About Jupitier Media" section)
Of course they back a public-private shared venture, what better way to insert ads into the public Wi-Fi network!
I don't know about anyone else but I'm getting skeptical about anything I read from Jupiter, Gartner or any of the big research firms. It's usually being paid for by someone with an agenda and, no surprise, the research tends to support the conclusions the customer wants. After a while you just stop paying attention to them. They've sold their credibility.
That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
Did anyone else see anything funny with a WiFi story being posted at 8:02.11 in the morning?
Nathan
This study needs to be looked at very skeptically, because there is a lot of money right now trying to discourage municipal wifi systems. Why? Because any new legislation being pushed by the telcom companies to ban municipal wifi as unfair competition would have to grandfather in any existing municipal wifi systems and allow them to continue to operate and even expand.
Many of the Wifi activists (Boston Area Wireles for example) are trying to convince local governments to at least establish a single note public Wifi system just so that they can continue to operate if the telecom industry manages to outlaw public networks.
It's pretty obvious which side of this battle has the money and motive to pay for "independent" research.
-braddock
I live in a New Jersey suburb, population 97,687, land area 30.1 square miles. So with 3,245 people per square mile, and assuming that $150,000 per square mile cost, that works out to $46.22 per person over 5 years, or about 77 cents a month. Now, granted that not every person will be a user, but I don't see how something like this could end up being prohibitively expensive. If only 1 in every 30 people is a user, it still works out to less than $25 a month, which is significantly cheaper than the broadband offerings in the area anyway.
Chuuch. Preach. Tabernacle.
"JupiterResearch provides unbiased research, analysis and advice, backed by proprietary data, to help companies profit from the impact of the Internet and emerging technologies on their business."
Thhat don't exactly strike me as comapatible when you're determining whether the governement can or cannot do something cost effectively. This is being sold to companies who, one would presume, would like to convince municipalities to NOT put in a competing (wireless) ISP.
To take my town as an example, we have 40,000 residents spread over 22 square miles. A lot of these are college students (I've excluded on-campus residents from that number) so I'll say 3 people per "household". That's 13,000 potential "subscribers", or 591 per square mile. I'd say more than half here have internet access of some type. If we GAVE away the wifi cards, we might double the infrastructure cost for the first 5 years (20,000x$40/5=160k).
I come up with $16.95 per month per internet-using household. Verizon (who was laying fiber down mainstreet last week) and Adelphia wouldn't be too happy, of course.
Before you think this might be too much money for a small town, we have a PPP for a new parking garage here (and retail shopping building). A developer convinced the town to float at $2M bond to help him build the building, and he gets to charge for parking during the day and for events. Even though we had to borrow the money to do it, the mayor claimed that the town would get (x) free evening and weekend parking spaces for only $20 a month. He forgot that we were borrowing the money, and the number was closer to $50 after interest expenses. That's more than the town pays to lease surface lot space 24/7/365. But, the mayor's been known to go out to lunch - on the developers tab - fairly frequently. Now that its built, of course, nobody wants the park there, because its too far to walk (2-3 blocks) to the "downtown shops", and is used only occasionally when the on-street parking is completely full.
Is it just my observation, or are there way too many stupid people in the world?
I love this reasoning. "It's too expensive to be worthwhile, so please pay a private firm to do it."
Mind the Gap
In the case of municipal WiFi, there are a huge number of public or semi-public hotspots all over major cities. The local governments would have to be offering a really good deal to make this beneficial to everyone. And if this is really a government service, though, one presumes it would be paid for via taxes of some kind. It would be better if the city got involved in helping private companies find places to put access points, perhaps providing some measure of physical security to those locations, for a fixed amount per location per month (let's say it's $3 per AP per month with a minimum of 1000 APs to cover a decent area). The company could then use some kind of authentication mechanism to make sure people connecting had paid for its service (maybe $25/mo).
The university I attend is modifying its wireless network to broadcast two seperate SSIDs - one that authenicated users (ie students, staff, faculty) can use (and is firewalled, etc) and a second that is wide open for anyone to use, but has no security whatsoever. Non-authenticated users could use a lower speed, and unsecured, version of the network (throttled back to a max of say 802.11b), while the paying subscribers would be able to use the higher available bandwidth (802.11a/g). This would allow people in lower income areas to still use the internet, but people who wanted more speed could pay for it.
Of course, with the new precedent set in Tampa Bay FL, how would municipalities actually be able to act on people using the network for illegal activity? (I personally think that it's the user's responsibility to not do anything illegal, but heaven help you if you believe in personal responsibility in America.)
Such muni WiFi projects could also impact other types of internet subscriptions (especially dial-up), and might be viewed as very anti-competitive to local, traditional ISPs.
antipaucity
heh, that would be 100 people per square mile before anyone gang rapes me on the math... it's early and I haven' thad my caffiene yet. My bad.
http://teasphere.wordpress.com - A little spot of tea
...or any of several small communities in this state if they'd prefer an inefficient WiFi network to no broadband at all.
Qwest has the DSL rights in Colorado pretty well locked up, and simply won't give service in the rural towns until it's damn good and ready..and that won't be anytime soon, because it hasn't even finished wiring Denver yet. Meanwhile, it's lobbying for a state law to ensure that its monopoly will continue to await Qwest's whim.
rj
150,000 per square mile over 5 years.
so that works out to 150,000/5 years/12 months = 2500 per square mile per month.
Which means that if you have 100 users in a square mile, which is far more than reasonable, you will be getting equivalent costs to benefits.
Let's say I misunderstood it, and it was 150,000 per square mile per year over 5 years. So then it would be 150,000/12 = 12500 ~ 500 users would be needed, again, really small number for a large city.
Finally, let's say I'm completely wrong and that 150,000 is per month. Then it would require 6000 users for there to be benefit. Which in a city like New York or San Francisco, is far more than reasonable.
Unless, of course, Jupiter is stating something way off, their math makes no sense at all. The cost they are giving is way more than reasonable for the benefits to the general population.
~ kjrose
Simply put: they aren't likely to. Mass transport systems haven't gotten rid of the highways, bike trails, or your own two feet, so i figure public WiFi won't kill off cable modems, etc. Public versions of a thing don't necessarily override the free enterprise system, they just try to provide a lowest common denominator.
Whether this effort does this successfully is what's being debated. It's likely that you will be able to get other forms of internet connection, because having a public version will just give the companies who provide it a point of comparison. But people who will be able to have at least that standard, which may be the point.
My problem with this effort is not the government possibly controlling internet access, it's a.) the governments that try to control web _content_, i.e. China, and b.) the fact that WiFi is useless for people too poor to afford computers. Are they going to provide computers, too? Because the cost per person goes up substantially at that rate- without it, though, it's a profound waste of money anyway.
Me, I'd like my town to have more funding for the library, which lets kids use the computers for homework if they don't have them at home. Or the digital bridge projects out there, which provide home computers for families that don't have them- and training to be able to use them.
"I'd say 'Have a good time,' but arson is still illegal.
I think you need to get out a little more. See, there are these things called "conversations", which allow a person-to-person transmission of ideas. And these "conversations" still occur all over the place. Visit your local coffeehouse, cafe, restaurant, or bar sometime, to see what I mean.
We no longer fight for our rights.
"We" (i.e. the great unwashed masses) no longer fight for our rights because we are fat and happy - some of the wealthiest people on the planet. Yes, yes, I know, "we" are not as wealthy as "the elite", but we're still far better off than most of the rest of the world. As a a result, "we" have become complacent and decadent.
Your elite-vs-the-workers class warfare rhetoric is charmingly quaint, but "so 20th Century". The vast majority of Americans are "middle class".
Why does everyone try to reduce every question to money alone? Oh yeah, they're selling stuff.
Governments should strive to provide services for as little cost as possible, but that doesn't mean that it should fail to provide a service at all if just because somebody declares it to be not cost-effective.
Guess what, public libraries are not cost-effective.
Public parks are not cost-effective.
I'm sure others can add their own examples. Cities provide these service because it benefits the residents and makes the city more attractive to others. E.g., it might encourage a company to locate new offices in this city instead of another to keep the employees happy, and unlike the usual "development incentives" these investments actually benefit the people, not a few executives.
Should cities provide wifi - even free wifi - in downtown and business areas? I think it should - because the public good (e.g., allowing people to check their email from anywhere in the area) outweighs the cost. If the city really, really needs to offset the cost it could impose a nominal head count on the employees in the area, and by "nominal" I mean $2/month/full-time equivalence person. It won't cover the entire cost but it's a symbolic gesture.
For every complex problem there is an answer that is clear, simple, and wrong. -- H L Mencken