The tiny town of Timnath, Colorado has thrown in the towel on its publicly administered wi-fi program. Construction of the system three years ago cost the town $113,400. Annual maintenance costs are $103,026 for the system’s 45 users every year.
The wi-fi system provided service only to Timnath’s Old Town area, according to the Coloradoan, and the residents who used it complained about “slow and unreliable” speeds.
Interim Town Manager and Police Chief Sherri Wagner told the newspaper efforts to upgrade the system with rented high-speed lines were abandoned when the price tag was revealed as $387,000 a month. Rather than incur the additional costs, the town opted to dismantle the project and refund nearly $70,000 in wi-fi impact fees Timnath had collected from building permits to fund the network.
Costs Fall on Taxpayers
Municipal wi-fi networks are typically implemented with the intent that subscribers will pay all the costs, but questions remain about whether taxpayers are getting stuck contributing to these systems.
A city wi-fi network in Davidson, North Carolina, for example, has experienced tremendous financial problems, says Michael Sanera, director of research and local government studies at the John Locke Foundation, a think tank based in North Carolina.
“The taxpayers have had to bail them out,” Sanera said of the Davidson system.
“You can imagine if they do run into trouble, they’re not likely to allow the banks to take the town hall. In the sense that that is highly unlikely, they’re more likely to take the taxpayers’ money in either increased taxes or figuring how to funnel taxpayers’ money into solving these problems,” Sanera said.
“And the other issue is unfair competition with the private sector, I think that’s obvious: When a city that doesn’t pay taxes is in competition with a private firm that does pay taxes, that’s one obvious measure that it’s unfair competition,” he said.
Town to Refund Residents’ Money
Timnath town leaders are developing a plan to refund monies remaining in the Wi-Fi Capital Infrastructure Expansion Account to town residents. The phaseout of the municipal wi-fi system is expected to be completed by August.
Comcast Corporation is now working to provide Internet services to the town of Timnath.
Sanera says there’s no comparison between private-sector wi-fi services and government-issued wi-fi services.
“[Private sector companies] have more experience,” he said. “They are much more attuned to market forces in knowing what consumers want and how they want it.”
According to an April 20 memo from the city to Timnath residents, Comcast is installing underground lines to provide services to Old Town Timnath. “Residents should be able to access Comcast for Internet services by late summer, bringing faster, more reliable service than this system is currently offering,” the memo noted.
Alyssa Carducci ([email protected]) writes from Tampa, Florida.
“Timnath Pulls Plug on Wi-Fi Network,” The Coloradoan, Trevor Hughes, April 30, 2011: http://www.coloradoan.com/apps/pbcs.dll/article?AID=2011104300359