Update: Aurora, Illinois offers free citywide Wi-Fi service

Aurora, Illinois has chosen MetroFi (the wireless ISP delivering free wireless broadband access to Santa Clara, Sunnyvale and Cupertino) to offer the same service to its residents. In the post I wrote last November 2005, the mayor was seeking $5 million to build out a citywide network. The network will also be used by city employees (such as public safety Aurora, Illinois has chosen MetroFi (the wireless ISP delivering free wireless broadband access to Santa Clara, Sunnyvale and Cupertino) to offer the same service to its residents. In the post I wrote last November 2005, the mayor was seeking $5 million to build out a citywide network. The network will also be used by city employees (such as public safety personnel). and the cost of the network will be supported via ads.

UPDATE (10 May 2006): In an earlier post I wondered about the $5 million the city was seeking for the project. I found out what’s happened to that $5 million – they did get money for this project, about $5.6 million.

But they don’t need it after all because MetroFi has offered to pay for the entire network. “You can’t beat something that’s free”, says one of the city’s aldermen (see story in the Beacon News Online). No, it’s not free.

Here’s what it will cost the city: First, to allow MetroFi to recoup its investment, there will be only one Wi-Fi service provider – MetroFi (note: please correct me if I am wrong here). Isn’t it better to have a competitive market, with a lot of providers offering different services and competing on price and features?

Second, this will cost the city “control”. Doesn’t control have a price?

Here’s what I mean by “control”. Let’s say you, the city, want to use bandwidth-heavy applications such as mobile VOIP and e-health over the wireless network. However, the wireless ISP has decided to build a network that does not deliver the kind of bandwidth you need for these apps because it wants to cut down on costs and increase its profit margins. The wireless provider cares only about delivering 1 Mbps downstream and 256 Kbps upstream to end users – free – but supported by ads. That is its business model.

So instead of leasing a lot of bandwidth from a provider such as Level 3, the wireless ISP gets only the minimal amount required for this 1 Mbps/256 Kbps service and mounts only the number of nodes required for this service.

What do you do? Deploy your own wireless network? Sure. But where are you going to put your nodes – right next to the wireless ISP’s? Two different nodes on one lamp post? Now you will be running a network alongside an existing network. You’ll have to pay for your own network in the end. Isn’t this grossly inefficient?
That’s the real cost of the “free” network. The city may find itself hostage to the wireless provider’s goals and won’t have a network that could serve its needs.

UPDATE (11 May 2006): Please read the comment posted by Chuck Haas, CEO of MetroFi below. He clarifies the Aurora network model and says, among other things: (1) MetroFi agreement is non-exclusive, so the city did not give up choice in broadband providers; (2) MetroFi was founded on the “open access” model. Any ISP that wants to resell service is free to do so, more choice. The rest of his comment is posted below.

Comments

  1. From the articles I’ve read, it seems the city has funds available they can use specifically to pay for the network. It’s part of a larger grant. The city has opted to let MetroFi build, own and operate the network using the ad-sales/paid-subscriber model.

    A reporter for one of the local papers feels that the city might not be probing deeply enough into what the cost of this “free” network will be to the city over the long haul. He brought up some of the points that I covered in my Snapshot report on the subject (www.successful.com/snapshot.html). The question we both have is, are we seeing a city so absorbed with being first that they’re not doing enough due diligence on this option, or giving enough consideration to other options.

  2. Andy Wells says

    I live in Aurora Illinois and I could see the “free” network eventually costing the city some money. Nobody wants to spend money frivolously but we are missing an important point. The wi-fi network will be a valuable service for the Aurora residents. I think we need to look at the potential cost savings to Aurora residents over the long haul

    I have been toying with the idea of dropping my phone carrier but I have always been tied to it because they provide our DSL. With the free wi-fi I can finally dump my phone service.

    This model will save Aurora telephone consumers a ton of money. A massive switch away from the phone companies is inevitable. Skype, the free telephone software, is so easy to use. Even if only 25% of Aurora’s 150,000 people get rid of their telephone service that translates into 37.8 million dollars per year (based on my $90 phone bill) for Aurora residents. Additionally, people will stop paying for dial up and cable Internet access.

    I can only guess at the true cost savings but this is a service that will economically benefit everyone with a computer.

    Perhaps a better point to ponder is what does the future hold for the phone companies who still won’t un-bundle their DSL from their phone service?

  3. Tony Hylton says

    I am the consultant on this project and I can say without a doubt that we have been researching this for over a year. We have modeled the Capex and Opex scenarios using some extremely reasonable assumptions (yeah – i already know the joke about assumptions) and we found that HAD we chosen to do it ourselve we would have seen a 42-48 month payback.

    We are not stuck on being first – we will be with a sound model and a willing partner. The taxpayers and the city will pay nothing! By the way – ANDY represents the majority of Aurorans who are dissatified with the big boys and would like to see the city roll this out for free. Remember – even if you choose the premium (ad free) version you are only going to pay $20/month – way better than the $75-99 you will pay on Comcast or ATT/SBC after any promotions are over.

  4. […] The City of Portland has issued a Notice of Intent to Award a contract to MetroFi to deploy its municipal wireless network. MetroFi beat out two competitors – EarthLink and VeriLAN. MetroFi has deployed wireless broadband networks in Santa Clara, Cupertino, Sunnyvale and Aurora (Illinois). MetroFi plans to have free and paid access plans where free access is supported by advertising (similar to EarthLink’s plan in San Francisco). The city will use the wireless network to make its own operations more efficient, including processing city parking meter transactions, connecting government employees stationed at field offices, and providing better information to emergency services. The city expects project partners, the Tri-County Metropolitan Transportation District of Oregon (TriMet) and Portland Public Schools to benefit as well since students and field workers will be connected at a lower cost than is currently possible. […]

  5. Did the city give any consideration to the Wireless ISPs that are already in operation in Aurora? There are several good wireless ISPs in the area and bringing in another system could either cause further degradation of the airwaves – or the MetroFi system may run into substantial operational difficulties. Munis should be looking local first before bringing in outsiders to deploy, especially when there are very capable locals already in the area.

  6. I think Esme makes some very valid points. While all are singing Cum ba ya today there could easily be a point in time where there would be a divergence of community and business needs and goals and then the problem begins.

    I applaud Metro-fi for their efforts and think what they are doing is a good thing. My personal preference however is for the municipal entity to own the system and then outsource operations to another entitiy which could be a company like HP or IBM or an ISP like Metro-fi or Earthlink.

    In this scenario a real win win scenario can be developed.

  7. My company is also involved in this project (technology), so that disclaimer is out of the way.

    It seems curious to me that Aurora has been such a catalyst for the “is it really free?” argument. A couple of points worth consideration for those with the opinion that the Aurora project is somehow markedly different from other networks planned and/or deployed.

    First of all, as Tony Hylton (above) describes — this city knew what they wanted and had done ample homework and due-diligence on the options. Simply, they had serious time invested in understanding their options and knew the trade-offs. Further, they HAD THE CASH to do it the other way if they felt so inclined! Why is this so hard to acknowledge?

    Second, who’s to say that the city did not have a keen sense of the municipal applications and uses which they would like to power via this network? The assumption via numerous comments seems to be they didn’t… when in-fact they did. They also made certain that those services would be enabled, at a savings, through the agreement.

    Last, it seems to me this is the model which is prevailing in many cities. This arrangement is fundamentally no different from those which are being structured between other cities with other service providers. MetroFi seems to get attention because of their baseline free offering, which some others don’t have. So what? They also build networks which have excellent scalability.

    Did Portland also not do their homework in selecting this exact same model? Seems to me they did 2+ years of due-diligence and ended-up with the exact same conclusion.

    Also, Matt Larson — I think you will find this market is moving quickly and interested parties are not likely going to be seeking you out, especially without some relevant experience in building and operating these exact sorts of networks. The people who are gaining traction in this market are those who are investing real $$ and going out to secure contracts. If you are interested in pursuing this market, find people who understand it and have them help you gain entrance where they know opportunities exist — there is plenty of opportunity for well capitalized service providers to enter as the market is still young. I sympathize with your situation of already operating a WISP network in the same area (hence having solid operational experience in associated technology), but this is happening everywhere — some WISP’s are transitioning their business models to secure similar arrangements with their communities proactively.

  8. Let me clarify a few things in this thread:

    1) MetroFi agreement is non-exclusive, so the city did not give up choice in broadband providers.

    2) MetroFi was founded on the “open access” model. Any ISP that wants to resell service is free to do so, more choice

    3) Any city that wants the “control” of owning a state-of-the-art, 2nd Generation dual-radio network with 25-30 APs per square mile can email bzifrony@metrofi.com and we will be more than happy to provide a competitive quote of around $60k per square mile and less than $1 per month per resident to design, build and operate the network. The city can charge for service, be advertising supported or totally free – up to them.

    4) Not sure where the limited bandwidth concept comes from? High-bandwidth city services are not free, so the bandwidth is paid for by the service price, as it should be. Want 10mbps streaming, great, we will save the city considerably over alternative solutions. Regarding service quality, MetroFi uses word of mouth to market our service vs. spending $200 on marketing to acquire a broadband customer and watching them churn away at 4% per month. We MUST provide a good value or we will not attract and retain customers.

    5) MetroFi uses 2-3% of the city light poles, so there are more than enough to go around.

    No one is held hostage here. Cities make informed decisions and there is not “one size fits all”.

    Chuck Haas
    CEO MetroFi, Inc.

  9. Wow, there are allot of heated conversations regarding this article……….What’s great is that the spirit of competition is clearly underway here.

    I am not going to get into a contest here but as a WISP we all have our own identities and the way we choose to enter the market is different and that great.

    I do not agree with all the pay models and the same with the free models. Everybody has different needs.

    If I run into a community that is seaching for a free model I will personally e-mail Chuck @ MetroFi and give up the lead.

    On the other hand we have a pay model for now and we are just focused on building out our customers networks and maintaining a solid relationship with our political base

    Great stuff guys I love this Blog.

    Kevin D Lampkin,
    Vice President Business Development
    Access Anyplace

  10. I am the IT Director for the City of Granbury. My City is one of the few who has successfully completed a “fully” installed and operational Wireless Mesh Broadband Project. Let me qualify what I mean by that. Many Cities are “In Progress”, or “using it for AMR but not selling it yet”, or “strictly for City use”. Ours is being sold to the public, used by the City, managed and owned by a private ISP, and partially funded by the City. It covers all of the City’s incorporated limits, 10 sq. miles. All that being, said I believe I can speak with an informed opinion on this subject.

    Who was it that said “nothing in life is free”. I have yet to see a business model that shows me how a private company can come in and successfully implement a ubiquitous wireless mesh network that will cover a large metropolitan area, in which they have not existing data center infrastructure, and supply complete access to the local government entities for free, and self sustain on public access sale. I know what it cost for our network, and our partner had all of the existing network infrastructure already in place. I have run the numbers and they are probably looking at a 3 year payback on their investment even with our financial help.

    Our model is definitely different from Aurora’s, which I lived in for two years. Our city had significant areas within the city limits that had no broadband service at all, and those that did where at a price point that was significantly higher than the mesh service is being offered. These factors are all catalysts for a quicker payback model than a metropolitan area that has significant broadband options. Doesn’t Aurora have good market saturation now when it comes to broadband? The question really comes down to will the paradigm of broadband anywhere offset the existing market leverage that exists. If so then maybe this free implementation model does have some validity. I have yet to see one that is really done. And you already have heard what I call done.

    When city fathers of Aurora jumped at this free offer, was there really due diligence done to see an existing completed implementation and review the revenue and expenses of MetroFi to determine if this business model is really viable? Or was it more reactionary because of the “free” price tag?

    I really hope that the free model can be self sustaining. I am a very big proponent of Mesh and see this as a time not unlike the early days of radio in the early 1900s. Our city is transforming the way we do business because of mesh. I do not want to see failures in the implementation of this technology cause this industry to be nothing more than a flash in the pan.

  11. Great point Anthony,

    I am looking at this from the WISP stand point and we have had 14sq up in Daytona for a few months now, so I respect your opinion because we both have two perspectives with raw data to support what we are talking about.

    But as a WISP again not to sound to redundant but I could not afford to this without support from the city. And in each case it will be different.

  12. Esme,

    Nice discussion in this thread — you posed some important questions. Just wanted to add the idea that the possibility of building a second wireless network with a different business model is not necessarily a bad thing. Competitive choice and responsiveness to differing user needs is indeed vital. Local policies that preserve the option for additional facilities-based providers (whether municipally-controlled or not) provide a better guarantee that the public interest will be served. If the MetroFi arrangement in Aurora is really non-exclusive…

  13. […] The Wi-Fi Task Force of Park Ridge, Illinois (pop. 37,000) met last week to look into the possibility of deploying a municipal wireless broadband network in their community. They invited Tony Hylton, consultant to the city of Aurora, to talk about Aurora’s project. On August 16, the task force will present a list of recommendations to the City Council’s Public Works Committee. In Municipal Wireless Posted Thursday, August 3, 2006 […]

  14. what is the status of the aurora il project?? did everybody drop the ball?

  15. That’s my question. Is it available yet, and how far out from the city center does it reach? Also, is there a better router to use, I have seen a D-Link that seems to be the one to get? But, will it work?

  16. Hi,
    I see few nodal points but they have missed my house by 500 yards which might require a $200 dish to catch the signal which wont be a high strenth signal and is not worth it. I don’t even know if they really want to cover the whole city. Please let me know if all are really getting a free service.
    P.S I live in Golden Oaks Community, Aurora, IL where there is no DSL service nor any other high speed internet service except Comcast which is $44.95 which really sucks..