“Were a very tech-savvy community,” said James Palenick, city administrator for Rio Rancho, N.M., explaining why his city of 63,000 was working to provide Wi-Fi access to its citizens.
“Weve always wanted this to provide economic growth,” he said. “It sends a very important message to the country and the world.” And of course, it sends an important message to the citizens of Rio Rancho that the city has found a way to provide nearly ubiquitous broadband access for its residents as well as a new revenue stream for the city.
Wi-Fi also promises to help provide long term economic benefits to Rio Rancho by attracting companies that want the atmosphere that wireless broadband access can bring.
Palenick said that his city initially started working with Usurf America Inc to provide citywide Wi-Fi, but shortly thereafter decided to find a different vendor. That company turned out to be Ottawa Wireless Inc. of Grand Haven, Michigan, which had just finished implementing a citywide wireless network for its hometown.
According to Tyler Van Houwelingen, CEO and founder of Ottawa Wireless, the company will have as much as half of the citywide network up and running by Christmas. “Access points will be located on light poles, traffic lights and police antennas,” Van Houwelingen said. “Well install between 100 and 125 Wi-Fi POPs [points of presence].”
Ottawa Wireless expects to start installing the devices in November, with the system completed by mid-March. When its finished, it will cover the entire 103-square-mile territory of Rio Rancho and will support VOIP (voice over IP) and QOS (quality of service) in addition to standard 802.11 wireless.
Palenick said that Rio Ranchos wireless installation would be the largest such Wi-Fi implementation ever. While he notes that other cities including San Francisco and Philadelphia have announced plans for citywide wireless access, Rio Rancho is actually doing it. Part of the reason for the strong interest is that the city boasts a very large number of citizens involved in science and technology.
Rio Rancho is adjacent to Albuquerque, and is the location of what Palenick says is Intel Corp.s largest microprocessor factory. In addition he noted that his city is located between Los Alamos National Laboratory and Sandia National Laboratory. Of course, there are other reasons. “We see it as an economic development tool—todays business needs good quality access, Palenick said.
Palenick also said that the city itself needs the broadband wireless connectivity. “Were permitting 3000 new single-family houses a year,” he said, noting that such access would allow inspectors to do their work without returning to the office. In addition, he said that there were significant public safety requirements for broadband access.
The city has worked out a license agreement with Ottawa Wireless that resembles a cable television franchise in some ways. The city gives Ottawa Wireless access to public right of way. In return, Ottawa Wireless will pay a fee for being allowed to operate in the city. Palenick said that the fee is 3 percent of the gross after the company receives $100,000 gross per month. That fee goes up to 5 percent for revenues between $300,000 and $500,000. Once monthly revenues reach $500,000, the fee goes to 7 percent.
Van Houwelingen said that he expects his company to start seeing significant revenues early on. He noted that the basic rate for a fixed wireless installation would be $19.95 per month for access speeds of 256K bps. A mobile wireless user would pay $5 more per month. Higher speeds are available at higher rates.
Van Houwelingen said that his company can implement the citywide Wi-Fi network quickly because relatively little infrastructure is needed. Each of the Wi-Fi POPs has a wireless backhaul connection provided through a Proxim microwave link working over a point-to-point or point-to-multipoint connection. He said that this allows the company to add POPs as needed, and to seamlessly provide upgrades and improvements as necessary.
Van Houselingen said that he expects the service to be very popular with individuals and businesses, in part because it will be very inexpensive to put into place. He said that most people with computers that are already capable of using Wi-Fi can simply start using the service once its running. He also said that Ottawa Wireless would be providing Wi-Fi-to-Ethernet bridges for those with a need for wired access, or for companies that needed to have separate networks.
“This might force other service providers to break down their costs,” said Julie Ask, senior analyst for JupiterResearch in San Francisco. Ask also said that winning a significant portion of the business in Rio Rancho could be an uphill battle. “I think its going to be hard to unseat an incumbent,” she said. “All they have to do is lower their price and the game has changed.”
Ask said that while Ottawa Wireless is offering an attractive price, existing DSL and cable providers are providing much higher quality connections. In addition, she noted that these organizations already have call centers and customer service. “The economics arent clear in terms of the cost,” she said.
On the other hand, Ask noted that the Rio Rancho implementation is the only one with a clear timeline. She also felt that the fact that this had the backing of the city was important. “Its good that the cities feel its important that their citizens have access to broadband. We will see more of this,” she said.