24 thoughts on “In New York, Downturn Kills Free W-Fi”

  1. Can’t say I’ll miss the access in the parks, I could barely ever pick up anything useable in the parks. That said, I continue to be surprised by the overall lack of pubic access across the city.

  2. @Bailey

    I wish we had that option in SF, where it is getting even more difficult to get free WiFi. On NYC and free WiFi access — i gotta be honest, you need to have free wifi access to be called a truly global city.

  3. Om,

    I enjoy reading gigaom posts, esp. the ones concerning telecom. So, don’t take the following personal.

    I would like to know why you think free wifi access is a must for a great city such as NYC or SF.

    Free wi-fi you say, paid by taxpaxers or from some kind of fantastic fund? Maybe you want tourists to pay for your free access, collected by some great tourism-tax scheme, controled and managed by city IT managers or some great wi-fi operator like Metro-Fi? (Oh, I forgot… they closed shop last year). What is, according to you, a sustainable plan? Meraki won’t be able to do it, FON also not. Who then? Also, what if the costs for city-wifi is much more than the WISPs planned for?

    There is no way city-wide wi-fi would ever be an option in NYC, and ten hot-spots didn’t even account for a drop in the NYC ocean. I don’t know whether it’s allowed to shamelessly plug a link to my blog post about this, but in any case, if you want to receive a copy of my White Paper, “Disastrous Flaws in Present Broadband Wireless Access Deployment and Business Models”, take a look at my blog’s post of 27th October 2008. I will refrain from posting the link.

    In that document, page 30, we specify the real cost for a first-class NYC city-wide wi-fi network: $335 million. For SF $31 million, and $62 million for Philadelphia. And that is based on an insane oversubscription ratio of 1:60!

    We have been warning for disastrous models since 2005, then again in 2007, and again last year – each time through white papers.

    Take care,

    Neal Lachman

  4. @Neal

    Thanks for the nice and intelligent comment. It is one of those strange things — i have started to work on a longish post which essentially was going to answer your questions. But now you have offered your whitepaper, I would love to take you up on that.

    I think there is merit to the idea of free wifi hot zones but that needs some planning and intelligence. the first model of muni was all wrong — it was coming at the problem from a different perspective.

    anyway lets continue the debate in a week or so when I finish my research.

  5. Om,

    I like the idea of free WiFi hotzones, especially in cities where they are a lot of people walking around, trying to find things. Several cities that own their fiber network (and the public utility) have created municipal wireless networks that are used for municipal applications and public Internet access (in parks and playgrounds). In one municipality, Rock Hill (South Carolina), the free WiFi service in the park is very popular among parents who attend softball league matches. They can take photos and upload them immediately from the park.

    So why not build a network for many applications and use the excess capacity to deliver free WiFi? Of course, the city paid for the deployment and maintenance of the network but they use it themselves for wireless automated meter reading, monitoring of water and sewage treatment plants, wireless video surveillance and so on. Since the cities own their fiber, they don’t need to buy it from a Level 3 or Qwest. The people already paid for the network via their taxes, shouldn’t they also get a direct benefit in the form of free WiFi service in public areas, especially since the municipality has excess capacity anyway?

    The frustrating thing about SF is that the city has a lot of fiber in the ground, city-owed, but they are constrained from using it (guess by whom). SF taxpayers paid for this stuff and should enjoy the benefits of a robust wired + wireless network not just in the form of WiFi access but also in improved municipal services. It drives me crazy to see municipal workers still doing things the same old way, as if it were the 1970s. The city could save so much money by using a combination of fiber and wireless for their own workers.

  6. Esme,

    As you know, I became a member of your Muni Wi-Fi group on Linkedin; I like to keep a tab on what’s going on. And just like GigaOm, I enjoy reading your blog too. In fact, the first source I mention in the article I am referring to below, comes from your distinguished blog.

    I am of the opinion that everything in a microcosm can be controlled and work like a charm. It doesn’t guarantee that it will work in larger environments. Hence me developing the world-shattering, heaven-shaking, mars-breaking “Law of Large Projects.”. 😉

    To answer the Muni-Wi-Fi and Community Fiber issue, I uploaded an (11-page!) answer on my blog, titled “Why it won’t Fly: Community Fiber & Muni Wi-Fi”.

    This post only concerns the politics and the market dynamics, and does not include the 35-page “disastrous models” white paper, wherein we give a clear view on what’s wrong in business and deployment models.

    Geez, it sounds like I don’t do anything else but nagging and writing analyses. Oh well, I hope you will enjoy my write-up, although I highly doubt it! 😉

  7. WIFI salon is using Altai Stuff. I wonder how they will treat their equipment. Can I buy them lol?

    Wired Town sounds a little bit weird to me. After browsing their site, they are just the same stuff…name changed, nothing changed.

  8. We speak to cities regularly, and every time we hear the city wants to give “free wi-fi” to every man, woman and child in their city, we duck. The better one is, “it will pay for itself in advertising dollars!” This article clearly shows that nothing free will last. And, it doesn’t have to be.

    With all the new 3G phones out there, City Wireless projects are making more sense, as long as the citizen realizes that it will cost him an annual fee of $100 bucks or some odd amount. No one who can afford an new IPhone will care, and will be rockin’ one speedy device. People just want good service.

    Most cities don’t have leaders with the foresight to understand the demand of the community for these necessary systems. The ones who do will be popular with my kids…
    Bobby Vassallo

    1. Bobby Vassallo is correct in that demand for public WiFi. He is the leading consultant, World-wide for municipal WiFi projects. Every old lady renewing and upgrading a phone from now on will be getting a 3G-4G phone. Demand on Cell cites will be enormous. Without public WiFi taking the pressure off the cell companies’ antennas, it will be hard to make a voice call. Do people still do that?

    2. Bobby Vassallo is correct in that demand for public WiFi. He should know as the leading consultant World-wide for municipal WiFi projects. I know of several projects City Wireless Consulting has done.

      Every old lady renewing or upgrading a cell phone from now on will be getting a 3G-4G phone. Demand on Cell cites will be enormous in another year or so. Without public WiFi taking the pressure off the cell companies’ antennas, it will be hard to make a voice call. Do people still do that?

  9. Dear Om,

    I write here to put some things into the public record, correct some misperceptions, and perhaps offer some hope for public Wi-Fi.

    I ran Wi-Fi Salon for five years, and none if it was easy. Raising money, securing sponsorship, building a 17 location network in the middle of ten of New York’s most prominent parks, usually large parks like Central Park or Prospect, where a working DSL line and even electricity was hard to find.

    The fulll buildout, starting in June 2006, was particularly painful. None of the park house locations where we set up had physical addresses in the Verizon database. They’d dispatch a technician, he’d show up blocks away outside the park, never find us, never phoned, and so it went. When we in time got lucky enough to find the technician to get him to the location, the state of the DSL lines, the copper running under the park was such that it was very often hard to find a working pair of wires to connect the line. As we were usually 5000+ feet from a Central Office, the connection was often shaky. It took between 12-15 tech visits to get the line in, and then there often were outages given the conditions.

    Seven months and $500K later we were up and running in all 17 locations. Only then were we allowed to announce that we had a network up, but by then it was winter. That’s city politics for you. We missed the entire summer season in 2006 as a result. In addition, hiring people to stand around in the parks waiting for people who never showed up for seven months cost me $250K.

    Please note that at no time throughout all this did the city offer to pay for any of this. We were in fact under contract with the parks department to pay them $7500 per quarter. Over the 4 years that we held the concession, I paid parks $120K.

    We were in fact all set for our second renewal for 2009, and needed but to pay our concession fee for Q3 and for Q4, which would have been the first quarter of the new concession year (It ran from September 30th to September 30th). The problem was, September hit. Marketing budgets slashed, Wall Street imploding. Despite that, we had a written commitment for a sponsorship for 2009, secured at the eleventh hour — this being December 5th — and hoped that this commitment would suffice until this sponsor was able to turn around a check to us. They had had a number of layoffs as well, and just getting them to the table again was difficult because a lot fell to those that hadn’t been fired.

    This wasn’t enough for NYC Parks, however. We didn’t pay our bill by the deadline, and so we lost the concession. I am actually fine with that. The cost of building and maintaining the network over the last four years was about $1.3 million. Running things for 2009 was going to cost me another $10K a month, and that is before one took into consideration that the equipment, now about 3 years old, needed a major upgrade — to Altai — and with that the backhaul had to be switched from DSL to fixed wireless to handle the new demand. We also needed to relocate about a half dozen underutilized locations, especially in the Bronx, Queens and Brooklyn so that we were not providing Wi-Fi in the middle of a large park, but right where people naturally congregated. Call it the Bryant Park/Union Square model. The bill for that would have been $400-500K, but it would have been well worth it.

    To attract sponsors, to put on meaningful marketing events, we needed to have an infrastructure capable of supporting 100+ simultaneous users. Old technology is old news. We put out a network for a one day event in Central Park September 15th — The Global Out of Office Day, which was sponsored by Sheraton, and Pepsi, with Microsoft and LinkedIn presenting. The network, using 4 Altais set up the night before, and powered by a 45 Mbps fixed wireless link from Rainbow Broadband, was capable of supporting 600 users. This is a capacity, btw, that Wired Towns can project to a number of public spaces in New York and otherwise.

    We had been using Altais on an event basis for Nokia in Washington Square Park, Union Square Park, and Columbus Circle throughout the spring and summer of 2007 and were amazed at its capability, how it was able to cut through all the RF interference and deliver a strong signal at distances we’d never seen before.

    In November 2007 then we dropped one into Washington Square Park. It was cold, the park was closed for renovation, there was little press. Our usage went up 10 fold overnight. We were streaming video on an iPhone 800 feet away Non Line of Sight.

    By April, it was clear that with the traffic numbers we were seeing we could make a business out of this via advertising. We then decided to put all our efforts in to establishing Wired Towns to meet this new opportunity. Specifically, we decided the market was with Business Improvement Districts. We signed a deal with The Union Square Partnership and since September we have been seeing 300+ users a day. The aim is to support BID members through local maps and listings, and through local wireless and web marketing services and applications.
    There are 58 other BIDs in NYC and may other BIDs around the country, and any number of small towns where this service would be of use.

    We now have a partnership with a global company with 830+ wireless engineers. We can deploy Altais and our local community portal solution as a bundle anywhere we can get backhaul, electricity, and a place to mount the antennas. That is the future of Wi-Fi, or of wireless generally as the white spaces open up and as the Obama Administration takes charge and such digital inclusion initiatives gain more support.

    I am very excited about what’s ahead, but then I’ve always been. With the flood of new devices hitting the market — netbooks, the iPhones of course and their many imitators and competitors, with the gear getting so much better, and with location based content advertising and services coming in to play, public Wi-Fi is far from done; it’s really only beginning.

    In a downturn especially with hundreds of thousands of local business at risk, they need a way to market their services both locally and on the web.

  10. Marshall,

    Just my very humble opinion: Public Wi-Fi has been dead at arrival, and we’re only beating a corpse now.

    I have pasted below some text from our July 2007 Business White Paper, which we slightly updated in October. The text below is accompanied with several tables, showing the numbers and scenarios with several variables. I could not paste them.


    Neal Lachman

    There are fundamental flaws in all existing and planned Wi-Fi deployments. The trade-offs of speed versus range is underestimated in all cases we have researched and studied. We took some of the best known Wi-Fi projects (past, present and planned) and looked at the actual plans or designs, divided it by the number of people and the number of the city square miles as well as number of Access Points per square mile.

    The results are shocking and show the flawed architecture and underestimated and undercapitalized models of large-scale wireless deployments. First, Wireless ISPs should be thinking in tens of thousands of nodes versus “a few thousand”. Since wireless users are mobile most of the time, the WISP network design is based on a “per square mile” model. The industry norm is 20 to 25 or 30 nodes (thus average of 25), depending on the density of the particular area. While this model is the most economical way to provide coverage to a large area, it is not a reliable solution. In fact, it is disastrous for any serious effort to cover an area with high-speed Internet access.

    WISPs should invest in more access points and bring fiber capacity closer to the local area networks, but these two issues are in direct contrast of their business models. Second, WISPs need to focus on the total population in the market as well as per square mile rather than the “number of nodes per square mile.” For example, see the major disconnect with reality in San Francisco where each Access Point (AP) would account for 640 people. This means, if on average ten percent (64 people) would subscribe to the WISP’s service, the average oversubscription would be 64 per individual Access Point. While oversubscription ratios are known to be squeezed to the maximum by WISPs, a ratio of 64:1 is beyond any reasonable realistic model. Oversubscription models are used by all shared-medium operators such as WISPs because not all subscribers log on at the same time and not all of those who are using the service use it intensely all the time.

    The most challenging part of WISPs is the service offering. Since data-only wireless networks, such as WISPs operate, are available to a select group of user, the target market is very limited. Besides the disastrous flaw in WISPs network designs and overenthusiastic (some would say naïve) oversubscription models, the other major problem will be the lack of interest. As data-only one-trick-ponies, WISPs will not be able to compete with 3.5G cellular service, or at best be comparable to the likes of Verizon Wireless’s EV-DO service. Nonetheless, amazingly, Verizon and Sprint have a gigantic USP (Unique Selling Proposition) over WISPs – mobile telephony.

    While the higher subscription ratio is the quickest fix to overcome coverage problems, it is also the weakest link in the WISPs’ entire business model. The ratio can work in some parts of the network, but due to concentrated markets and the density of users, a higher ratio will lead to the collapse of the entire local area network. An oversubscription ratio of 40:1 is deemed too unreliable, especially when it comes to mobile dynamics in urban deployments where the variables are underestimated. However, no matter what the oversubscription ratio is, if only five people in a local area network are trying to watch a streaming video on their handhelds or laptops, it could disrupt service or bring down the entire LAN.

    The 40:1 ratio has a high probability of 10 people using video or high-capacity/multimedia/rich-media services at a given time. The 60:1 ratio only increases the risks of overcongestion and would most likely have disastrous consequences. There are no guarantees as to how many people will subscribe to a wireless service, thus all networks are built with the fact in mind that they gain a certain market share. However, “the more the merrier” WISPs will never say “no” to any new subscriber. The obvious purpose of a wireless network is that it allows people on the move to connect and access the network. But, if successful and the subscriber base keeps on growing, the flawed oversubscription model and the lacking capacities on their networks will cause fatal problems for the WISPs.

  11. Marshall,

    Good question. The Emperor of Wireless, Andrew Seybold, has a great piece related to your question. And while it is a bit dated, the information is still quite relevant. (http://www.andrewseybold.com/commentary.asp?ID=73).

    In our wireless white paper, we covered the 700 MHz challenges and we explain why even technologies such as LTE will not be able to deliver on a double-digit Mbps promise. Heck, we explain why WiMAX isn’t the holy grail of broadband either.

    Double-digit speeds on any “wide range” mobile network will be highly unlikely, even when the WISP will put a small number of users on each “cell”, but they will want to put make subs on the network, because they need to make money.

    Once we build and operate our infrastructures, we plan to offer subscribers 1) mobile telephony (like you have now with your cellular/wireless provider), 2) mobile broadband (it could be a WiMAX kind of service or a LTE kind of service), and 3) City-wide/State-Wide/Nation-wide Broadband Wireless Access at 10 Mbps (basic) and 100 Mbps (premium).

    However, the latter service is limited to where we build out. So, while you will be able to get our 100 Mbps BWA everywhere in the city and the suburbs, maybe even exburbs… and maybe even in some rural areas, there will be NO such grand service where we don’t have the infra. It is simple as that! We can’t promise you a service at a place where we didn’t freaking build the infrastructure for it. Thus double-digit speeds will most likely only be possible in a certain Fixed Mobile Convergence network. There is simply no technology that solves the speeds vs range problem. The government will and cannot release the spectrum for it. That would be insane. Thus, we will always have the trade-off of speed vs range. At least, I think as long as I’ll live… and I am (just) 38. 😉

    Thus, for us as users we will be able to get the services we need, but because of the inherent limitations of our service providers, we will hop from one to the other. Thus, if we will be traveling in the train or with the car, we may be happy with our Mobile Broadband service at maybe 10 Mbps (if not just 5 or 2 Mbps). Of course, once you get in the “coverage” are of my company’s systems/networks/infrastructures, you will be able to hop/switch to the 10 Mbps or 100 Mbps or whatever service you are paying for. But in order to be able to do this, you need to have the MAN, WAN and LAN infrastructure build, and also extend fiber to each base station. That will cost tens of billions. Our wireless access infrastructure will cost approximately $5 billion, and that is besides the fact (AND HUGE COSTS) of our 15,000 NEW miles of fiber (to extend to streets/buildings/homes/offices – FTTH/O).

  12. RF interference is a huge problem with open spectrum, but predominantly in cities and dense ‘burbs.

    I agree with Andy that ‘in rural America there will not be an issue,’ That’s where white space solutions will bloom and where I am starting.

  13. And as to your white paper, the death of public Wi-Fi is greatly exaggerated. Of course a for-pay service that seeks to blanket an entire city was not going to work. The endemic QoS issues with Wi-Fi meant that you could only at extreme expense deliver a citywide service that customers deemed ‘good enough.’ The cost to do that would never be covered by subscription revenue, given the ready availability of better, cheaper alternatives, starting with DSL.

    This was obvious to many an observer even in 2003.

    The mentality that you needed to cover the whole city to offer viable public Wi-Fi led to mass disappointment and failure.

    I have always advocated ‘building community wells’ over trying to provide everyone with indoor plumbing. Put Wi-Fi in the places where people naturally gather — main street, town squares, the village green, the commons.

    If by public Wi-Fi being dead you mean the notion that an entire city must be covered with a Wi-Fi umbrella, then I agree. Wi-Fi is best thought of as a nomadic rather than a mobile experience. Understand first the limitations of the technology. These networks were built along the carrier model — Earthlink, Metrofi. Universal coverage was never possible nor economically desirable despite the feel good politics of it. If you just light up the libraries and schools, you have done a lot already.

  14. Marshal,

    I respectfully disagree.

    White Space spectrum won’t make such a great difference anyway. It’s just another hyped up piece.

    Furthermore, I don’t recall you receiving our White Paper, so you can’t and shouldn’t comment on it. What you may have read is the “Why it Won’t Fly” 11-pager on my blog. http://glassified.wordpress.com/2009/01/07/why-it-wont-fly-community-fiber-muni-wi-fi/

    You should see the tables in our White Paper. Public Wi-Fi is underestimated at a cost, operational and deployment level. For example, to build a somewhat robust Wi-Fi infrastructure for New York City, it would cost approx. $1 Billion on an oversubscription ratio of 20:1, and $335M at an os ratio of 60:1… go figure.

    I understand that I am not saying something popular, but the numbers speak for themselves. You may feel I am trying to kick your livelyhood, but that’s not my intention. However, if you can shoot holes in my businessmodels, please do so. I’ll be wiser for and because of it. If, at the end of the day, my model doesn’t work, I deserve to be put put of business. That’s how things go.

    Do you deserve to be put out of business? No, I think you, Marshall Brown, deserves to be supported in your efforts to bring public/free/sponsored wireless connectivity. You truly have the passion that’s needed.

    So, I am hereby offering you free and unconditional support. Send me a note, and let’s set up a time somewhere next week. It won’t hurt to spar a bit now and then, and if it makes sense, to follow up on my advise.

    Take care


  15. Dear Neil,

    I beg your pardon for the mischaracterization. More accurate would have been to say ‘the conclusions from your The White Paper’ here.

    I have never proposed covering the entire city with Wi-Fi, i.e. municipal Wi-Fi. Too expensive for too little performance given the spectrum. I have always been more a proponent of a community based as opposed to a citywide Wi-Fi. What Wi-Fi is good at is high speed, short distance. Work with that if you want to create value.

    I too believe in the value of debate, especially now when so much is up in the air in NYC, and nationally. Over the next days, we will be relaunching Wired Towns in part to enable that. We will have our structure and value proposition on the site, and from there we can really aggregate the opinion of all those who are invested in making public (not muni) Wi-Fi more available.

    Once we get past that, would love to chat. We will then have a nice framework for debate.

  16. The new networks going up in the Rio Grande Valley are no joke. And, they are running with perfection, except for Brownsville. I hope the RGV wireless Initiative takes hold and Brownsville and McAllen participate. I believe the Lower RGV Authority is seeking a Valley-Wide Emergency network. This is already working in most of the Valley and would take little to cover the whole of the expanse. Pharr and Mission are getting into the act. I have personally tested Pharr’s for a Home Medical function we need. Nothing like it! Mike Vessey, Los Angeles

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