Muni Wi-Fi will survive EarthLink’s pullback

EarthLink’s decision to scale back its upfront capital investment in municipal Wi-Fi networks isn’t likely to devastate the muni Wi-Fi market, but it should get cities and towns looking at Wi-Fi in a different way, one industry consultant is saying.

Craig Settles, president of Successful.com and a consultant to cities considering Wi-Fi networks, believes broader partnerships are required to make the finances work for municipal Wi-Fi and that those partnerships should include local businesses, school districts and medical facilities. He doesn’t believe cities will be successful, however, in convincing networking and computer hardware companies to fund their efforts. Rolla Huff, CEO of EarthLink,  said in an analyst conference this morning that his company would no longer bear the full burden of building a Wi-Fi infrastructure but would look to share that with other interested parties such as chip makers and hardware vendors.

“The hardware vendors have been up front in saying they aren’t going to do that,” Settles said. “The vendor, in any guise, paying up front for a network — that isn’t going to happen.

“What makes more sense is for the municipalities to go and find some other allies — a dozen large businesses, colleges and universities, medical centers — each one of those has significant need for high-speed access,” he said. “Those folks collectively represent a bigger security blanket as opposed to cities by themselves. You have to have the city as part of that because if you are company X, and the city is not an anchor tenant, you have to wonder why you should be an anchor tenant. But if the city says this high-speed network makes a lot of sense, it’s easier for a business to make the commitment.”

EarthLink, like other companies in the muni Wi-Fi segment, found building out a Wi-Fi infrastructure that met consumer expectations was more difficult and expensive than initially thought. Telephony chronicled those problems earlier this summer in a series of articles.

Many of the smaller cities pursuing Wi-Fi networks wouldn’t have gotten EarthLink’s attention, anyway, Settles said, and would be more likely to work with “smaller regional service providers, which is not a bad thing in and of itself.”

“It is possible some of the incumbents like AT&T will be considered for more projects,” he added.

Whoever the provider is, by working with local businesses and other entities, cities can build networks that are more robust and still financially viable, Settles concluded.