Free Wi-Fi project in Sydney canceled

The New South Wales government has scrapped plans to set up free Wi-Fi hotzones in the central business district of Sydney and other NSW cities. The government looked at proposals from 15 providers but decided not to go ahead for financial reasons. The article in the Sydney Morning Herald says “in the US, free wireless schemes in Chicago, Houston and San Francisco have been dumped after failing commercially” is not accurate. These networks were never built so they have never had the opportunity to “fail commercially”. What’s happened is that the provider behind the SF and Houston networks – EarthLink – decided to leave the municipal wireless market when it did not see an opportunity to make a quick buck. In Chicago, the city did not even get around to choosing a provider. They issued an RFP and there were two final candidates, AT&T and EarthLink, but after EarthLink announced it was pulling its bid, AT&T decided it did not want to go ahead either.

The NSW government should focus on getting broadband to remote areas that operators are not interested in serving and in creating more competition in the market for broadband services.

Comments

  1. The quick buck comment is very unfair. Every for-profit business needs to have some glimmer of hope to recoup their capital and operating expenses for a buildout. The Houston and SF business models would have never recouped their costs. You are right when you say that wireless is the best choice for less densely populated greenfield deployments. That is why we are successful, we’re an infill provider, not a competitor to wired broadband or an entrenched licensed wireless provider.

  2. You should really define what “quick buck” is. When you are a company and sink millions into infrastructure, you are expected to -somehow- make the money back with a profit. Earthlink was not in the NGO/non-profit sector. I also think your comment is unfair, the blame lies on the false expectations created around a technology never intended to give coverage to vast metropolitan areas. The name “hotspot” was not given without thought, otherwise they would have coined the term “hotcity” or “hotmetropolis”.

  3. Esme Vos says

    The “quick buck” operators in this space (and I am not citing to EarthLink in particular) are those who believe that their schemes will either temporarily prop up their stock price (if they are publicly listed) or entice gullible investors to fund projects that by their very nature will not make money within a year.

    A wireless network is not a service, it’s infrastructure. One can build it, own it and deliver one or more services on top of it, lease capacity on it so others can deliver services over it, but it is not, and never has been a service. Where the infrastructure builders and the service providers have understood that distinction and acted accordingly, the networks and the services rendered on top of them have generated more competition and innovation. Where they have not (or refused to acknowledge it because they want to monopolize the infrastructure and services and keep prices high with the help of corrupt governments), the results have been disappointing.

  4. Esme,

    Your rant sounds like your grip on the reality of business is slipping fast. EL went into this project because of the unrealistic hype on a technology doomed to fail; a lot of which you helped to create. So that red stain on your hands should be a wake up call to you and your misguided excitement on a topic and technology for which you had less than a satisfactory knowledge of.

    EL did not do this to boost their stock price (citations needed) or to help monopolize services with the help of corupt government (tin foil hat needed). They did this because their dial up business is bleeding, line sharing was effectively ended, and they needed a new and inexpensive way to cover the last mile…oh yeah and to make money. They got caught in the tsunami of insanity that you assisted and lobby extensively for which, had no basis in reality, and eventually failed. I tried to tell you this for the last few years but I was made fun of, called names, told I was anti progress, a telco shill, etc etc all the while I was giving free advice from an expert point of view on a technology that was doomed to fail. Mike was right on, hotspot was a well thought out and perfectly precise descriptor for wi-fi. Muni wireless is like cold fusion, great if possible but not worth building reactors today unless the results are within grasp.

  5. Esme Vos says

    EL also went into the Helio business which is a failure — was that on the hype of a technology doomed to fail, a technology called cellular wireless? As far as I can tell, people are still using cell phones.

    I am afraid you overstate my ability to hype anything, to drive markets such as wireless broadband. I am not a highly paid Wall Street analyst.

    I love Wi-Fi because it uses unlicensed spectrum, the equipment is cheap, it’s easy to set up. It’s disruptive. The telcos have always hated it and will continue to hate it unless they can control it and create more billing moments. Wi-Fi is very popular precisely because it meets people’s needs. Simple as that.

    As for corruption, governments that allow big company lobbyists (incumbent telecom operators) to control public policy and write legislation are corrupt.

  6. Esme Vos says

    Another thing: perhaps one should visit cities outside the United States, e.g. Taipei, where there is a citywide Wi-Fi network. There are more deployments taking place outside the US than inside. Lots of investment in wide-area wireless broadband networks (not just Wi-Fi but also WiMAX and 3G) going on in China, Malaysia, the Philippines, Eastern Europe, Middle East. US and foreign wireless equipment makers (e.g. Cisco), even the wireless mesh vendors, are reporting excellent sales mostly outside the US. I guess some people believe in investing for the long term . . .

  7. I am all for technology that works. My point is that wi-fi is not ever going to preform under FCC regulations the way that you have been championing for so long. Japan has one of the most advanced wireless networks, SKorea the best wired. Thats great but has nothing to do with the fact of consistent failures of almost every municipal wifi network in the US because of bad technology for the application. I love wi-fi too and I love peanut butter, but I dont put peanut butter on turkey and I dont try to cover cities with wi-fi. It just doesnt work out so well from my experience, ymmv.

  8. This is a fascinating thread, so against my better judgment, I’m jumping in (moth to the flame).

    First, just because city-wide Wi Fi Mesh hasn’t worked yet doesn’t mean it won’t ever, or that it shouldn’t. We’re still early in the game, so failures of experiments to date may just be learning moments leading to ultimate success (think Edison and the light bulb and Marconi and wireless – lots of widely criticized failures before ultimate game-changing success).

    Second, just because Earthlink led a marching band down a dead-end alley doesn’t mean that all parades are bad, just that particular one. We should all be more discerning in the future.

    Third, just because incumbents have been against this trend because it threatened their comfortable status quo doesn’t mean they’re evil or corrupt (though some certainly are) – it may also be that they’ve been insufficiently motivated. Things change: witness the news this week (right here on this site) that Cablevision is starting to drop wireless zones into their territory. And the jury’s still way out on the stimulus effect of the Clearwire/Sprint WiMAX announcement.

    Fourth, free was never “free,” rather it was “subsidized.” The right subsidy model may well still be waiting out there to be discovered, and we may well still find a home for free access in the right markets. As long as wireless access provides value, it will find a market, and free will be less and less relevant.

    There’s a lot of confusion in this argument, but there are rational positions still to be taken on all sides. What we need to be mindful of is throwing out the baby with the bathwater…unlicensed wireless technology has a future, we’re just trying to figure out what exactly it is. There are more mistakes yet to be made, but they too will bring lessons and we’ll all get smarter (let’s hope!).