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02/06/2007Pittsburgh Service Provider Likes "Free" Model
In 2006, US Wireless Online won a contract to deploy an ubiquitous Wi-Fi network in Pittsburgh’s central business district. In an interview at the W2i Digital Cities Convention in Philadelphia (Dec. 5–6, 2006), Tim Pisula, US Wireless’s executive vice president and chief technology officer, pointed out user- and business-side advantages to a tiered service that provides free access for two hours each day.
Q: How did Wi-Fi Downtown Pittsburgh get under way?
A: The customer, the champion, of the whole Pittsburgh Wi-Fi initiative is the Pittsburgh Downtown Partnership (PDP) and its CEO Michael Edwards. He had a vision. They had gone through an RFP process, and we responded and were selected, and then we worked together with the city. But the [Bob] O’Connor administration — the mayor who recently passed away — were very helpful and embraced the concept and looked at it as their opportunity to learn about how it works, and to see what consumer acceptance would be like, and to basically orient the administration on how to go forward with doing a citywide initiative.
Q: What’s the coverage area of the downtown network?
A: Approximately two square miles in the central business district, where the Steelers play football and the Pirates play baseball.
Q: And how has it been received?
A: We have been pleasantly overwhelmed by the reception we have received from people using the network. As of the end of November [2006], we had about 3,500 registered users. We’re carrying almost half a terabyte of data through the network on a monthly basis, and in the busiest hour of the day there are about 125 simultaneously users on the network. This is a very compact network in terms of geographical footprint, so we’re very happy.
Q: Who are the users exactly?
A: The business model is two hours free per day, and then you can subscribe, and the registration data suggest that the free users are locals — what I call a regular population who use it a lot. A lot of these people are indoors, which was not part of the original design criteria. But we did put in a density of APs, and it was inevitable that it would work indoors.
A lot of corporations and the city and county government have content filters and blocks on their Internet gateways, and what we’re finding out is that a lot of the users are gambling, doing fantasy football, [surfing] porn. They’ll jump on that with their own laptops while they’re working because they can’t access that content via the employers’ connection. We’re not trying to proliferate that — we’re a pipes company, providing the connectivity — and we’re certainly in no position, or have no desire, to regulate content. We’re just happy that people are using the network.
Q: Who are the paid subscribers?
A: The bulk of the daily and monthly subscribers are transient folks from out of town who are visiting the city for three or four days. The way it’s been subsidized by the PDP is that, for $14, you get a whole month, and that’s cheaper than what the coffee shops offer. We didn’t really want to compete with them, but that’s the way it’s played out….
Q: Are hackers a concern?
A: Hackers are a concern. We do force people to register, so there’s a user name and password. That ties to a means to identify the users. I like the free model because it does entice people who otherwise wouldn’t use it to give it a try. We have a section of the network in a digital-divide area called the Hill District. In the evenings, there’s no doubt that that cluster of APs is the most heavily trafficked — there and in the cultural district. You definitely can see usage patterns between the business people during the day and the residential users during the evening. That works for us. It makes for a more efficient use of our network, and our interconnect facilities.
Q: What about the free business model and the revenue stream?
A: If it was a standalone business model where we had to derive profit or loss, it wouldn’t work. The fact that we are an existing fixed-wireless broadband or last-mile access provider complements our business very well. The revenue we derive, it’s like another big corporate customer to us. It’s easy for us to maintain the service-level agreements because we’re a wireless company, and we have wireless engineers who are equipped to do all the operations and maintenance activities. I’ll knock on wood, but we haven’t had any major technical problems — either software or hardware — so it’s been a good experience so far.
Q: What are the next steps?
A: The next steps for US Wireless Online are to drive advertising and subscription revenues. We’re working with the PDP to do advertising and create an awareness that the network is there.
Mayor Ravenstahl’s administration — he and Howard A. Stern, the city CIO, are working hard to formulate the strategy going forward relative to issuing an RFP and trying to figure out what model works best for the [whole] city. We understand that there’s got to be an objective process, and we’ve done our job to establish that we’re a credible incumbent relative to the downtown footprint. We’re just encouraging the city to get their process defined, and we’ll participate in the proposal process like EarthLink and everybody else who will step up and want to propose a citywide solution.
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