VAR-Driven Wi-Fi Networks Can Succeed
Recently, the New Millennium Research Council (NMRC), a Washington D.C.-based think tank, released a study that warned of grave flaws in government-run wireless networks. According to the study, such initiatives threaten to leave taxpayers with heavy financial burdens. It also mentioned that having the government butt in where it has no business would serve only to hurt competition in the telecommunications industry. Even though there is some truth to what organizations like the NMRC are saying about municipal Wi-Fi networks, their study doesn't show the whole picture. Being skeptical about the government driving technology adoption is smart. But, when you consider the role VARs can play in deploying city-wide Wi-Fi hot spots, the outlook changes.
VARs, Venture Capitalists Make Municipal Wi-Fi Work
The debate whether technology initiatives should be government led or driven by the private sector reminds me of an episode of 20/20 I saw a few months ago. The title of the piece was "Selfishness Is Bad, Right?" One of the examples compared privately-owned forests to government-owned forests. The U.S. government owns only about 1/3 of all the forests in the United States, yet those lands have the majority of the forest fires. The clip concluded by saying private forests are less likely to burn, because "greedy" timber companies depend on them for their livelihood. I think this 20/20 piece, which favored private ownership over government ownership, can easily be translated to the NMRC's Wi-Fi study. If a city-wide hot spot project is run solely by a municipality, there is a good chance the project will burn to the ground, figuratively speaking. But, things aren't as black and white as the municipal-run Wi-Fi naysayers want you and me to believe.
Consider the city of Philadelphia, which is presently in the process of rolling out a $10 million city-wide hot spot that will cost more than $1 million each year to maintain. Critics of the project claim that the project will drain tax resources. According to the city's CIO, no taxpayer funds will be used because the project will be built and maintained by for-profit private companies. Philadelphia's Wi-Fi project will make wireless connectivity to the Internet available for free in city parks, libraries, and some other areas. Users wishing to access the wireless network in other areas will pay roughly $20 a month, which will give them 1 Mbps bandwidth of uploading and downloading capability.
Philadelphia officials are claiming taxpayers won't be held accountable if the project flops. Besides making available basic infrastructure items such as utility poles and housing the wireless transmitters necessary to make the project work, the city is leaving the bulk of the project in the hands of the private companies.
Where I live, it costs nearly $50 per month for cable-based Internet access. DSL (digital subscriber line) service is not available. Outdated phone lines and switches in my area leave dial-up enthusiasts with a mere 26,600 Kbps of bandwidth. From my perspective, I can't help but see Philadelphia's proposed Wi-Fi network as a good thing -- especially since the project depends on VARs and venture capital firms to make it work.
I'm sure there will be a few glitches Philadelphia will have to work out before its wireless network is up and running smoothly. But, I would be very surprised if any of the naysayers' warnings ever come to pass. Other large U.S. cities such as Chicago, Las Vegas, New York, and San Francisco have Wi-Fi projects in the works right now. As long as these municipalities leave the brunt of the job to private businesses and don't burden their citizens with Wi-Fi taxes, the chances of success are good. Rolling out municipal Wi-Fi hot spots in this manner will create more opportunities for consumers who, like myself, would rather not pay $50 a month for cable-based Internet connectivity. As a result, municipal hot spots will flourish, and that will mean big opportunities for VARs.