Hot Topics Subscribe to Newsletter Tell a Friend Print this Page 08/22/2007 Moving Beyond Single-Use Public-Access Models Midway into 2007, intensive press coverage of the U.S. local-government broadband-wireless market continues both in the business media and in mainstream print and broadcast outlets. Whether in BusinessWeek or on NPR, the stories often target the financial and political weaknesses associated with citywide wireless deployment models that center on single-use public-access models. Often naming Philadelphia and San Francisco, the reports typically cite low demand and quote dissatisfied network users complaining about their unsatisfactory customer experiences. But by targeting the failings of these models, however, are the media missing a broader, ongoing story on broadband-wireless business-model planning and several leading-edge implementations currently under way? Industry Reassessment As far back as 2003, W2i has consistently identified the single-use low-cost public-access business model as speculative. Around the U.S., poor subscriber rates and low revenues from this model are now confirming this, leading the primary investors and service providers behind such models—EarthLink, AT&T, and MetroFi—to reconsider their business strategies. Pending and potential agreements between these operators and their local-government and vendor partners will clearly be affected and could lead either to the abandonment of some projects or to a broad renegotiation of others. The local-government broadband-wireless industry essentially rests on five key participants—technology equipment vendors, service providers, systems integrators, application providers and local governments. W2i believes that a long overdue realignment of core business strategies—more inclusive, for example, of anchor tenancy and local-government business processes reengineering—could not only reshape the industry in a positive way but could open up opportunities to a whole new set of actors, both on the technology-equipment side and on the service-provider side. Simultaneously, systems integrators and application vendors, who are more technology agnostic, will likely welcome a refined business-model landscape that is based on a balanced view of reality. While the industry is reassessing itself, W2i is observing an increase in the number of U.S. states providing serious organizational support and funding for deployments in rural and underserved areas. The demand for broadband—and the applications and services it supports—has by no means abated, and the trend at the state level is a positive one for equipment vendors and service providers because the private or local-government investment dollars required in cities may not be relied nearly so much in coordinated regional efforts. Bad Wireless Technology or Bad Business Model? On August 1st, the I-35W bridge in Minneapolis collapsed into the Mississippi River, causing nearly a dozen fatalities as well as an immeasurable inconvenience and economic impact on the region. In the face of this crisis, USI Wireless, the service provider deploying Minneapolis’s citywide broadband-wireless network, immediately responded by (a) opening the network to emergency first responders, providing an alternative wireless communication channel to the public after cellular service failed, and (b) wirelessly enabling surveillance cameras on the riverbank that linked back to the emergency response centers below Minneapolis City Hall and on the Mississippi River. While USI Wireless’s Wi-Fi mesh network was only 20 percent deployed at the time, its availability and immediate expansion was vital to emergency workers and city, county, state and federal officials who needed both instant communication and the ability to remotely assess the disaster site to prioritize and coordinate action. Clearly, the technology is not what is in question when broadband-wireless networks are properly architected. (This includes networks deployed primarily for public access, such as the robust installations in Toronto and the City of London.) Rather, a major risk factor for both service providers and local governments is the deployment of a single-use network that relies solely on subscriber uptake for its long-term financial viability. Building and sustaining a critical mass of users may simply not be achievable. On the basis of four years of field observations, W2i believes a successful approach is a multi-use network driven by local-government business-process reengineering, implemented as a public-private partnership with anchor-tenancy stipulations, and incorporating digital inclusion as a windfall benefit of deployment. The Case for Operational Efficiency and Anchor Tenancy As far back as November 2003, when W2i and the City of Atlanta co-hosted the first Wireless Internet and Municipal Government Summit, W2i identified local-government operational efficiency improvement—as compared with digital inclusion, economic development, and new services to citizens—as the one municipal primary driver that could provide a tangible return on investment on a horizon acceptable to private investors. Based on US Department of Labor statistics, W2i observed that untethering local-government mobile workers could result in a 20–30 percent productivity improvement, and that, in the United States alone, broadband-wireless infrastructures could yield in excess of $15 billion per year in savings for communities, thoroughly cost-justifying deployment. Because the rate of growth of the mobile workforce (17.7 percent) is faster than of the sedentary workforce (6.3 percent), these savings are on track to increase over time (see figure). W2i further identified those segments of the local-government workforce with a major opportunity for value-added application development. The table lists US local-government mobile-workforce demographics and expected percentage increases from 2002 to 2012. In June 2004, W2i and the City of San Mateo, California, cohosted the Wireless Internet and Municipal Public Safety conference partly in recognition of the San Mateo Police Department’s documented efficiency gains using its downtown Wi-Fi mesh network. About the same time, operational efficiencies in the public-safety and public-works departments of Medford, Oregon, were also noted (see figure). And in 2005, the City of Corpus Christi was awarded the first W2i Wireless Communities Best Practices Award for best e-Government Application for municipal cost savings associated with its use of Wi-Fi to collect data from its automated water and gas meters. In a watershed agreement late in the summer of 2006, USI Wireless won an anchor-tenancy contract with the City of Minneapolis focusing on the delivery of government services while also creatively addressing digital inclusion. The network will support public-safety personnel and other institutional department workgroups requiring ubiquitous access fixed and mobile high-speed broadband services. Anchor tenancy significantly mitigates risk for USI Wireless, guaranteeing it $1.25 million in annual revenues, partly in the form of systems integration services. (In a useful contrast, in July, W2i had warned the Miami-Dade County Council of the risks associated with digital inclusion as a primary motivation for deploying a network, rather than as a windfall benefit of a network deployed for local-government operational efficiencies that could be tangibly measured.) In early 2006, as part of the 5th Digital Cities Convention, in Houston, W2i kicked off its Service Provider Executives and Local-Government CIOs Roundtable series to explore sustainable business models for citywide broadband-wireless deployment, especially through public-private partnerships. At the 6th meeting of the Roundtable this past May, in Chicago, participating service providers unequivocally agreed on the need for local government to leverage a critical and economically beneficial anchor-tenancy commitment in their partnerships to maximize the financial and political return on investment and accelerate the construction and deployment of justified projects. They further noted that local governments need to streamline often onerous procurement timelines to broaden their range of choices among potential industry partners and increase competitive alternatives in their communities. At WiMAX World Europe in May 2007, W2i presented on the Mobile Government Workforce Productivity Model profiling improvements for a city of 100,000 inhabitants, based on a rich set of anecdotal data points and experiments. This modeling supports anchor tenancy based on an 80 percent discount value for anticipated productivity improvements, guaranteeing a win-win opportunity for both the local government and the service provider (see figure). Internationally, the Cities of Taipei, Seoul and Incheon are demonstrating the benefits associated with this approach. Awaiting Broad Proof Points In mid-2007, with the exception of the network in Corpus Christi, Texas, we are still awaiting the broad proof points in support of the local-government anchor-tenancy business model. These likely will not be available until early 2008, when multi-purpose government/public-access networks such as those in Minneapolis, Minnesota; Riverside, California; and Brookline, Massachusetts, begin to show viability. After nearly a half-decade of successful deployments for governmental use, W2i’s expectations for these multi-use networks are very optimistic. Before the public gives a final verdict on the failure or success of local-government broadband-wireless networks, we must continue to watch closely service providers's reassessment of their business strategies, local governments' approach to partnerships, and the viability of emerging networks built fundamentally on mobile-workforce productivity improvements and anchor tenancy and not solely on public access. back Related Items: • Rockville, MD • W2i Finalizes Program Agenda for Digital Cities Convention in Washington, DC • More Muni-Wi-Fi Project Slowdowns in Boston, Cleveland • Roundtable Report: Service Providers and CIOs Face Off in Chicago • Brad Mayer, IT Director, Chaska (MN) Comments No records were found. Post new comment: Only registered users can add comments. Please Log-in

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