Ohio Town Proceeds with Wi-Fi Plan

Published May 1, 2008

With plans for citywide wireless Internet systems crumbling around the nation, Gahanna, Ohio is on schedule to become the first city in Ohio to begin work on such a system.

Dublin, Ohio-based DHB Networks will install the wi-fi network, and Gahanna will not own the system but will commit to becoming an “anchor tenant.” This will guarantee the city’s funding for the system and, once it is complete, will provide access for city government agencies to use the network, according to the agreement.

According to Kevin Marchese, director of the city’s technology department, the network is part of an overall broadband strategy for the city government. The city will mainly employ it for public service and public safety uses, but it will also be a resource for wireless meter readings.

While the city’s broadband strategy has already been approved, the city council will vote in April on whether to sign a contract with DHB Networks. If, as expected, the contract is approved, DHB Networks will begin construction in May, with the network scheduled to be up and running between January and June of next year.

Transmitters for the system would be located on the city’s utility rights of way.

Multimillion-Dollar Burden

The estimated cost of the planned network is $6.2 million over 10 years. The city will allocate $1.35 million over five years for the system. DHB Networks will sell subscriptions to the public to cover the rest of the costs. If DHB Networks, for whatever reason, decides it does not wish to maintain the network, it will revert to city ownership.

According to Marchese, the wi-fi system was the best technology to use as part of the city’s broadband strategy. “In the long run,” he said, “it will be very much more cost-effective” than other alternatives.

Gahanna, a suburb of Ohio’s capitol, Columbus, has a population of 33,000 within its 12 square miles. While other Ohio cities have wireless zones, this project if completed would make Gahanna the first in the state to deploy wi-fi over its entire area.

DHB Networks currently operates a small wireless network in Dublin, Ohio, covering only the city’s metro core. DHB also recently purchased a troubled citywide wi-fi system in Longmont, Colorado. It was chosen from a group of seven companies that bid on the Gahanna project.

Widespread System Failures

The launching of the Gahanna system comes at a time when many other cities are reconsidering their experiences with wi-fi.

David Hansen, president of the Buckeye Institute for Public Policy Solutions, sounds a note of caution. “With other cities’ wireless systems failing to live up to their initial promises, Gahanna taxpayers should closely examine this proposed deal,” he said. “History has shown that ventures such as this are risky. With the city using a different wi-fi model, hopefully the people of Gahanna can escape the fate that has befallen taxpayers in other cities.”

The heavily hyped municipal wi-fi system in Philadelphia, for instance, hit a significant roadblock in February after its corporate partner, Earthlink, pulled out of the deal. Other cities are experiencing similar problems. Some, such as Chicago, gave up on plans for citywide wireless systems after their corporate partners demanded they enter into “anchor tenant” agreements like the one pursued by DHB in Gahanna.

According to Marchese, in other cities “no one is ready to risk the leap of faith” on wi-fi, fearing the technology may become obsolete. In order to keep up with changing technology, DHB Networks will provide Gahanna with any network upgrades as technology progresses.

Private Ownership No Answer

Unlike wi-fi systems in some cities that have failed, the Gahanna system will be privately owned, with the city as a purchaser of services. For the public, a month of access to the network will likely cost $25.

In other cities, the public has proven reluctant to purchase such subscriptions. In Philadelphia, for instance, the expected number of subscribers did not materialize. Similarly, when Lompoc, California launched its wi-fi network, it lured far fewer subscribers than expected and suffered high customer cancellation rates.

Last year in Ohio the city of Toledo considered a wi-fi system similar to the one being proposed for Gahanna. Conflicts between Toledo’s mayor and other city officials torpedoed that deal.

Marc Kilmer ([email protected]) is a policy analyst for the Buckeye Institute for Public Policy Solutions.