This week, the San Francisco Chronicle reported that the city supervisors have delayed for a month the next hearing about the city’s proposal to grant EarthLink and Google the right to build out a municipal wireless network across the city. Given the statements Rolla Huff (EarthLink’s CEO) made at EarthLink’s quarterly financial report last month, however, it sounds like San Francisco’s project is already dead — before it ever really got started.
During the financial call, Huff basically announced that some of EarthLink’s strategic focus has been diluted by several initiatives implemented to drive future growth (including muni Wi-Fi and EarthLink’s capital investment in Helio, among others), but which have morphed into potentially larger, unintended financial commitments. Meanwhile, steady cash flow from EarthLink’s core access business had caused a certain level of tolerance for under-performing segments of the business. But Huff iterated that, from here on out, these new ventures need to tighten up and show results to satisfy shareholders.
As far as muni wireless is concerned, Huff’s point was that, as currently modeled, EarthLink’s muni Wi-Fi plans were not viable. From here on out, EarthLink would require municipalities to become anchor tenants of the muni nets, so EarthLink could ensure a certain level of financial results while it builds out to further support consumers.
“Until we are convinced we can build new networks and get acceptable revenue, we will delay any further new build-outs,” Huff stated.
But the Chronicle points out that the city of San Francisco is nowhere near ready to accept that level of fiscal responsibility from the network, indicating that it doesn’t have the client pieces in place, or near ready, to take advantage of a wide-scale wireless network.
As fellow eWEEK Labbie Wayne Rash recently pointed out, muni Wi-Fi needs to be tightly focused to be successful. Networks for municipal services can succeed if the scope is limited and well planned. Networks to bridge the digital divide can work if an end-to-end solution is presented, which includes providing client devices at affordable rates to those for whom the network is intended.
San Francisco’s plan has shown none of that end-to-end planning. Originally, the plans included provisions for Government Fixed and Portable/Nomadic use scenarios, but as the plans progressed, government usage has been dropped only to a vague promise (PDF) of consideration down the road. And while the Digital Inclusion plans have worked out some details regarding Customer Premises Equipment to enable the network, no thought has been given to devices. It’s as if the city has said, “We will determine if you are poor enough to be part of the program, but you have to be rich enough to provide your own device.”
Given that the San Francisco supervisors’ latest plan demanded a) faster free bandwidth, b) more privacy controls and c) a shorter commitment period, I don’t see how EarthLink will possibly agree given the new corporate climate there. The part that scares me, though, is the thought that if EarthLink passes (as I expect it will), that the city will continue with an ill-conceived plan to build out the network itself.
Given that downtown usually smells like an open sewer when the sun is out, the used needles in Golden Gate park won’t pick themselves up and the local power company keeps having things explode in and around the city, a city-run muni network seems like the worst idea possible.