One year later, St. Cloud citywide Wi-Fi network shows impressive results

One year after the launch of St. Cloud’s citywide Wi-Fi network, 77% of residents have registered for the city’s free wireless broadband service and are staying online for 3.5 hours on the average. St. Cloud, Florida’s network has received so much press because it is one of the few city-funded, city-owned networks in the US and it provides free Internet access to residents and businesses. Although the city owns the network, it has outsourced operations and maintenance to HP.

Jonathan Baltuch, founder of MRI, the consultant to the city, says: It is therefore fitting that at this year’s Muniwireless conference in Dallas the Cyber Spot celebrates its first anniversary on March 5, 2007. Being a pioneer with the first municipal owned system of its kind (although dozens of other communities are following suit), the Cyber Spot was immediately the subject of attack by the incumbents who were terrified by the prospect of communities taking back their digital rights. All throughout this year, while rumors and misinformation flew across the net fueled by various dubious sources, St. Cloud went about its business of providing its citizens with a premium quality service that saved the residents millions of dollars, eliminated the digital divide and created economic, educational and social opportunities for the citizens of the community.

Another by-product of this effort is that the city collected a comprehensive database of real world statistics and system information on the network.

Baltuch adds: The uptake rate of 77% is impressive when you consider that fee-based networks are attempting to reach uptake rates of about 20%. Incumbent broadband providers of cable and DSL rarely break 30% in any area after many years in the market. If the goal is true digital inclusion then reaching 20% – 30% in a community is unacceptable. This is why municipalities should be directly involved in providing this alternative service, hopefully for free, but at minimum for an extremely low cost.

Indeed, those who say that a municipally owned broadband network can never deliver good service are simply wrong. Many of the critics of municipally owned broadband mischaracterize the networks as being run by city employees who have no experience in delivering broadband service. In reality, most cities that fund and own the network, outsource the deployment, operations and maintenance to private companies. St. Cloud’s partner is HP.

At the end of 2006, Novarum, an independent wireless testing company, surveyed cellular and Wi-Fi broadband networks across the US. They ranked St. Cloud’s network no. 1 (and the only one with 100% service availability) ahead of Sprint, Verizon, AT&T, Earthlink and many others.

Detailed statistics

(1) Total number of registered households: 8,492 (77.2% of the city)
– total number of registered devices: 14,198
– total number of individual users (2): 20,0008

(2) Average number of users per household: 2.09
(3) Average number of devices per household: 1.38
(4) Maximum number of simultaneous users: 2040 (24% of households)
(5) Total number of individual sessions: 1,322,109
(6) Total hours logged on by users: 4,627,381
(7) Total megabits of information transferred: 25,617,918
(this amounts to approximately 410 million web pages)
(8) Ave session length: 3.5 hours

Additional statistics:

(a) From the end of month 1 to the end of month 12, the Megabits of information transferred by users has increased by 470%
(b) Average monthly growth rate of subscribers in year 1: 26.1%
(c) Average monthly fee previously paid per household by residents for Internet access: $36.47
(d) Estimated currently available annual savings to the residents of St. Cloud: $3,724,754

UPDATE: In response to questions about how they calculated the number of registered households, here’s the formula:

Total number of devices registered: 14,198
Minus system reset in first month: 1,000
(note: in the first two weeks of operations the registration system was reset and the database of approx 1,000 users was wiped out. It is assumed that they re-registered and would show up twice in the total number

Total number of unique devices registered: 13,198
Minus business users: 805
(6.1% based on user survey data)
Minus visiting users: 674
(4.9% based on user survey data)
Total number of residential devices: 11,719

Total number of registered households: 8,492
(the user survey determined an average of 1.38 devices per household)

This gives the percentage of homes registered (or homes passed) as 77% based on a total of 11,000 homes in St. Cloud.

Comments

  1. How is St Cloud financing this? Are they just allocating a portion of their annual budget to pay for the installion and outsourced support because they (city government) feel it is important to provide this access to their residents? Or is there some other (hidden) way of generating revenue from this model? Thank you!

  2. Jonathan Baltuch says:

    The Capital expense was funded through the local economic development fund. The annual operational expenses are funded through the internal savings to City operations, which exceed the annual cost of operations.

  3. I’m sorry, but I’m new to this subject. Could you explain your second sentence? How, exactly, does muniwireless service save the City operational costs? Thank you!

  4. How many of those 8,500 homes have dropped their primary ISP(dsl,cable, etc) and how many homes were new internet users?

    Has a study been done that shows any direct economic benefit to the city from these estimated savings of residents?

    It looks like your model is working. I don’t know why your success hasn’t been duplicated in more places.

  5. St. Cloud was unique among metro Wi-Fi systems we have surveyed in the completeness of its coverage. In each location we sampled outdoor service, we got it. The closest other Wi-Fi networks were in the 75% availability range.

    Performance is modest – entry level DSL – but the price is unbeatable and the system is very easy to use anywhere in the city.

    What is also interesting about St. Cloud is that there is effectively no other high speed wireless service – we found effectively no 3G service from Sprint, Verizon or Cingular available.

    We also found very little other Wi-Fi suggesting little uptake of DSL or cable broadband in the city. That is question to Jonathon about the penetration of DSL and cable in St. Cloud.

    In our survey, it seemed clear that the city provided network was the major source of broadband in the city – commercial providers did not seem highly evident.

  6. Are the statistics shown above new? Do they represent the 6 month period since the last report of Sep-06?

    If so, I am curious how visitors/non-resident users are counted on the network in terms of registrations/individuals since it seems the HH penetration number has remained basically static.

  7. Jonathan Baltuch says:

    It is great to see all the comments. St. Cloud has been a pioneer in so many ways but one of the more valuable byproducts are the stats which give a very clear picture of the successes created. There are a number of questions above so below are answers to each:

    Marty – These stats cover the entire first year. Visitors and businesses are part of the overall number of devices registered (4.9% and 6.1% respectively).

    The number of handhelds is relatively small but that number should grow exponentially over the coming years. In the systems we are currently developing for other cities hand helds will have their own specialized registration pathway and the content from the portal will be delivered in a format designed for them. In 3 years time I fully expect that 50% of all users for Muniwireless systems will be handhelds.

    Daniel – Municipalities save money (or create new revenue) basically in three ways.

    1. Cash savings to operations through a variety of methods including cell phone replacement, mobile data card replacement, Internet connectivity to facilities etc. In many cities the conversion from cell phones to mobile VOIP phones can save a small city $100,000 a year or more.

    2. Productivity savings. i.e. in Corpus Christi the remote meter reading has allowed them to go from 29 meter readers to 5. A savings of over $1,000,000 per year

    3. Advertising revenue – This can create new cash flow for a city through portal and other types of advertising.

    I hope this helps

    Taylor – Based on a user survey 68.3% of users had either dropped or were planning on dropping their existing service and using the Cyber Spot as their primary Internet access. 37.6% of users were digitally disadvantaged meaning that they previously either had no Internet access or only dial-up.

    As far as duplication elsewhere, while not as broad as it should be there are actually significant numbers of communities, both large and small that are seeking to deploy free models. They recognize that the economic, educational and social benefits are significant in the free model.

    Ken – You are correct in that there is no other wireless broadband. The majority of St. Cloud (almost 100%) is serviced by either Cable DSL or both.

  8. Donna Hart, mayor of St. Cloud says:

    I am the current Mayor of St. Cloud and I want everyone out there to know that “Jonathan Baltuch, founder of MRI, the consultant to the city,” quoted in the article above is not a true statement. Mr. Baltuch has not been the consultant for the city for at least six months when Mr. Baltuch’s contract ran out and was not renewed by the city. Yet he is still running around the country touting St. Cloud as if he still consults with the city. The figure he states is those who signed up – it is not a figure about regular users. It is my estimation that only about 25% of our citizens are using Cyperspot with regularity. The rest have had multiple problems accessing and many have stated to me that they are giving up on the system. Most never left their internet service provider they just tried the system and when they found problems – hooked their computers back to their providers. The cost to residents just to maintain the system is about $400,000 of tax money yearly. The initial cost was about 4.2 million dollars which was taken from a fund set up for utility infrastructure. At this point there aren’t enough city services using the system to say the cost savings pays for the maintenance fees. The consultant fees exceeded half a million for what MRI did for the City in this area. Their fees were actually higher than that but they did PIO duties for the city as well. The concern of the present Council is getting the return on the investment and what to do when the technology needs to be updated. A city of 30,000 doesn’t have the funds to replace and update this system every 3 to 5 years. If property taxes in Florida are eliminated as the legislature is proposing this year the city will not be able to afford to maintain the system.

    Donna Hart, Mayor City of St. Cloud

  9. I believe the truth is finally coming out on the optimistic performance information being provided by some of the consultants. As an engineer, it was obvious the original design was insufficient to provide the type of coverage the city was led to believe. It was only after a significant amount of additional infrastructure was added did the city start to get decent coverage. Even then, most users were still forced to buy indoor equipment in most cases.

    The sad part is that this same design is being fostered on other cities by the same team. St. Cloud was heralded as their trophy example. I applaud Donna Hart for being truthful about the actual results. I hope other cities attempting to use the same design critically review what is happening in St. Cloud. If the city has to shut it down because of cost and poor performance after spending 5 million dollars, that’s going to look pretty bad for the people who voted to put the system and the consultant who recommended the design.

    There is a better way to engineer a system for a city that is cost effective for the city, provides all the services residents need, and reduces future upgrade costs to something manageable. However, getting past the hype has been difficult for non-technical government personnel. They rely on consultants who don’t have to pay for the system, don’t understand the engineering from an RF standpoint, network engineering, support standpoint, or a technology obsolescence standpoint. Cities should demand more complete long range planning and better data from these consultants instead of buying off on the idea they will simply need fewer employees and will be more efficient.

  10. I have a question on the savings of going from 29 meter readers to 5. How much did it cost the city to put in the equipment to monitor all the meters wireless including labor and yearly maintenance? Did you include that in the savings calculation?