California City Votes to Buy Back Its ‘Free’ Wi-Fi Network

Published May 10, 2010

Add Riverside, California, to the list of cities that have seen their plans to provide free wireless Internet access go not as well or as cheaply as planned.

The Riverside City Council voted in late March to take back its municipal wi-fi service—and the $1 million in annual maintenance costs—from AT&T, just two years after inking a partnership to provide free Internet access in the city.

In 2008 Riverside reached a five-year, $4 million pact with AT&T to build an 86-square-mile network. The contract prevents the city from reselling or leasing the network to another company until the remaining three years expire. The city has decided to run the network itself instead.

Taxpayers Left Holding the Bag
“Absolutely, muni wi-fi is dead,” said Chip Yager, director of operations for Motorola’s Mesh Networks Products Group.

Riverside’s residents can now either shut down the network or work with a sponsor such as Web search giant Google—which has dipped its toe into the Internet service provider (ISP) business—to help pay for the costs of providing free wi-fi service to city residents.

Riverside is not alone in having to clean up after promising residents free wi-fi. Similar projects failed in cities such as Chicago, Philadelphia, and San Francisco. Those cities, and scores more, created wi-fi networks run by local government but in partnership with an ISP to help defer costs.

In almost every case, the private partner determined the costs were too high and the business model—usually involving the sale of Web ads—didn’t work.

Learning Hard Lessons

Steven Titch, a telecom policy analyst at the Reason Foundation in Los Angeles, says Riverside is now learning the hard way how to spend more wisely.
“So-called free Internet service is now taking a back seat to the city’s own telecommunications priorities, a shift that will actually create taxpayer value and perhaps make these projects pay off in the long run,” Titch said.

Yager says he’s seeing more and more cities abandon grand plans to provide free wi-fi to residents and simply build smaller networks that will help public employees do their jobs while tooling around the city.

Muni-Only Model
“The evolution of municipal services networks means that cities can now leverage the same network for multiple purposes to address the needs of multiple public entities like public works, automated meter reading, and video surveillance,” Yager said.

“That newer model, of using the established wi-fi for city-provided services rather than directly providing access to residents, is what many cities are adopting these days,” Yager said.

Use Public Dollars Wisely
Titch agrees, saying, “If the benefits of the wireless network can be measured against real cost savings to a city, that’s great.

“Cities may play up the ‘free’ wi-fi aspect to save some face among public broadband activists,” he added. “But by the time it’s through loading surveillance, traffic, meter reading, telecommuting, and other applications on the network, there won’t be much capacity available to give away.”

Celeste Altus ([email protected]) writes from Martinez, California.