Wi-Fi Worries

There is already enough activity in the municipal Wi-Fi market to be of great concern to incumbent telephone companies. Unlike fiber-optic networks, wireless networks can be more quickly constructed and put into service. Unlike cable networks, wireless networks don't come with built-in customer acquisition costs. And unlike competitive carrier networks, wireless networks don't face high last-mile access barriers.

That's why the expected response to the explosion in municipal Wi-Fi is likely to be the largest incumbents battling city rights to own and operate muni Wi-Fi nets in multiple political arenas.

What makes this approach unlikely to succeed, however, is the rapidly changing business market for muni Wi-Fi and the fact that, as one approach is shot down, another crops up. Are cities inherently incapable of running telecom networks and keeping technology up-to-date? No. There are companies interested in doing that for them. Is free access foolish? No. It can be limited to certain areas and certain services or bundled with a for-pay service as Google and EarthLink are proposing to do in San Francisco. Are city subsidies a political liability? No. There are other ways cities can cost-justify construction of wireless infrastructure with anchor tenancy and improved city productivity.

The point is that fighting the proliferation of muni Wi-Fi networks is becoming like fighting a wildfire in the rain-parched Southwest — the traditional means of warfare probably won't work.

Which is why it may be time for some unconventional thinking. To date, nary an incumbent has ventured into the realm of municipal Wi-Fi. But what's stopping a well-funded telecom or cable company from exploring the high-growth arena of Wi-Fi networks?

It may be hard to back away from an entrenched position but the greater risk is realizing too late that the position was not only wrong but dangerously so.