Desperately Seeking Investors

By Carmen Nobel, Caron Carlson  |  Posted 2008-06-02 Email Print this article Print

Telephone and cable companies have overturned some municipal wi-fi projects, but advocates—including congress—are fighting back.

Desperately Seeking Investors

The problem, of course, is that not all cities can afford to do it themselves. Where public funding isn’t an option, cities and towns are struggling in the wake of the Earthlink failure. Some municipalities that banked on a model of investment by private-sector service providers are finding their prospects drying up.

“When Earthlink backed away, they sent a ripple through the whole marketplace,” says Phil Bertolini, deputy county executive and CIO for Oakland County, Mich. “There were some concerns that if Earthlink couldn’t do it, no one could.”

Oakland County is not using any taxpayer funds to pay for its wireless network. It’s letting a private-sector services company host it. But the county has ensured that the provider will have free access to hang access points on buildings and utility poles. Also, the county did the bureaucratic legwork to ensure that the service provider does not have to negotiate separately with more than 60 cities, villages and townships in the county. The Wireless Oakland plan is to provide 128k service for free, with higher bandwidth services offered for a fee.

Five hundred access points have been installed over 18.5 square miles, and 21,000 users are taking advantage of the free service, with more than 300 signing up for higher bandwidth, Bertolini reports. However, the marketplace has shown little interest in investing in a system expansion.

“We’re caught up in funding for future phases,” he says. “Our citizens really want it, and they’ll use it. But we’re behind schedule, and I don’t like it.”

In addition to investor skittishness following Earthlink’s pullout, there have been concerns about the viability of Wi-Fi technology. Plus, the Michigan economy is not faring well, so public financing for the Oakland network is not in the cards.

“Our governments in the state of Michigan are pretty strapped right now in terms of revenue,” Bertolini says. “When it comes to building out a broadband network, it’s a large capital expenditure, and who has the dollars right now?”


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