Philly WiFi "All Sizzle, No Cheesesteak"

This is a great headline from a story by Sonina Matteo on the NetworkWorld web site today. And very timely considering Houston is apparently getting back into the muni wireless game.

A year after Philadelphia gave EarthLink the green light to build a citywide Wi-Fi network, the grand plan to deliver ubiquitous broadband to tourists, residents, businesses, government workers and low-income households is in shambles.

The story continues with similarities and assumptions similar to Earthlink's deal with Houston...

Under the deal with the city, EarthLink made all of the investment into the network. The city has no financial skin in the game. EarthLink's revenue comes from selling short-term Internet access to tourists and visiting business people, plus service plans for consumers at $21 a month.

The contract that Earthlink signed has some other wrinkles that make the business plan look exceedingly shaky. EarthLink is actually paying the city $2 a month per access point (the company has installed more than 5,000). The company coughed up $1 million to help get the Wireless Philadelphia non-profit up and running. And it agreed to provide service to 25,000 low-income households at half-price.

Analysts are convinced that this business model simply can't work. "Whether city officials of Philadelphia would agree or not, the reality is that EarthLink's public access business model has pretty much died," says Peter Jarish, an analyst at Current Analysis. "What has to be understood is that this isn't an indictment of municipal wireless in general. It is an indictment of going in and trying to justify public access alone."

An interesting note to the Philly and Houston deals. Both agreements were helped along by consultant Brian Anderson. I met him last year during a meeting with Earthlink and City of Houston IT folks. He still lives in Philly and commutes to Houston. My recent attempts to reach Brian have yet to be returned.

Say It Ain't So. Houston Getting Back in City WiFi business?

Just when we thought the City of Houston learned its lesson from trying to unwire the city from the tangled cables of the Internet, it looks as if they are giving it another try.

Less than six months removed from the unraveling of the Earthlink deal, the City's Digital Houston Initiative has released a Request for Information/Interest to prepare for a competitive solicitation to expand the current municipal wireless network. This RFI was released without the fanfare of the original muni-wireless RFP back in February 2006.

Earthlink was ultimately selected to build out a 600+ square mile area of ubiquitous wireless Internet access. Before one router was installed, the company decided spending $40 million+ on a service that very few people would use that they would kill the Houston project and get out of the muni-wireless business altogether.

Earthlink paid the City over $5 million due to a smartly written agreement by Mayor White's consultants. It is my understanding the City spent some of this money to build-out and beef-up its downtown wireless presence being used for public safety and public service.

So here we go again. Buried in the City's Bids & RFP's Formal Documents web page is an RFI that was sent to "vendors in the US network managed services, Internet service provider, and Wi-Fi Hotspot services market." See the full document PDF.

Here is the meat of the RFI:

6.0 Service Offerings

The City of Houston seeks Information from suitable providers for:
1. Network Operations Services - approaches for providing network operational support for the a “mixed use” municipal wireless broadband network. The objective is to identify options for providing back-office network operations for municipal broadband public safety, public service, digital inclusion, and ISP wholesale customers.

2. Hotspot
Network Services - This RFI seeks options to extend Hotspot amenity services to venues and business establishments in designated high traffic areas across the city. The City intends to consider the opportunity of extending free WiFi access to Houstonians and visitors, provide venues and business with competitive services, and monetize excess network capacity using ad-based hot spot business models.

Today, the Houston downtown business district has ubiquitous WiFi network coverage that was primarily implemented to support the electronic parking meter payment system. This network has significant excess capacity that could be extended to the public through downtown venues and business establishment Hotspots.

3. ISP and Open Access Wholesale Management
Services - to provide undeserved Houston communities with competitive broadband services by extending excess capacity in the municipal broadband network through a wholesale open access services to multiple retail service providers.

Internet applications and services such as VoIP, video, music and e-learning are raising the bar on the minimum symmetrical speed and QoS required to access popular applications. Most under served communities do not have affordable broadband service options that sufficiently support a wide range of applications, including video.

Do we really need a citywide network with more Hotspots popping up at affordable costs or even free access (i.e. AT&T/Starbucks)? Are consumers and businesses willing to pay for not-so-speedy access?

I doubt the City will put up any of its funds to build and operate such a project since they initially found a third-party company in Earthliuk to put up the money. Though that process slowed down the Digital Houston Initiative by a few years it seems Mayor White still wants to leave a legacy of wireless Internet and bridging that digital divide.

Earthlink Selling Its Muni WiFi Division...

...but thanks for the $5 million.

It seems like only last year we were reporting regularly on the city's deal with Earthlink to build the largest WiFi network in North America. We now know that Earthlink pulled out of its deal with the city after a new CEO took over the Atlanta-based ISP.

Not only does municipal WiFi seem so 90's now, Earthlink has finally realized that building $50 million+ networks for wireless Internet access is akin to offering dial-up Internet connections (wait, they still do that). 0-for-2, Earthlink. The company is selling its muni WiFi business. Any takers?

In a conference call Thursday evening Earthlink also said it is no longer investing in Helio, a cell phone service targeting tech-savvy kids. Kiss 300 or so million dollars goodbye. 0-for-3.

Hey, who wants to meet me at Downing Street Pub for a stogie and free WiFi. Imagine that.

More on this during Saturday's radio show, 11am on The 9-5-0.

Houston Continues To Get Richer

I lunched with former Earthlink Muni WiFi Houston GM Steve Powell last week trying to comprehend the business decisions and meltdown of the cityside WiFi deal. Steve was recently let go from Earthlink along with about 100 other EL Muni WiFi employees.

Earthlink is technically still in the game of providing WiFi for Houston but it is a long shot that will come to light. They hold the contract to work with the city but would have to lean on other partners to get 'er done since EL has scaled back its plans to build out more cities.

In related news and fallout of this deal, the city's IT office led by Richard Lewis has let some of its staff go including Communications Director Mike Moore. Several contractors hired for the WiFi project have also been cut including former City Councilman Mark Goldberg.

We know the city is $5 million richer since EL cut a check for the penalty of not completing the project on schedule (or at all, for that matter). But until last week I hadn't heard about another recent payment of $1 million to the city for Earthlink's contractual commitment to the Digital Inclusion effort. The city's contract with EL called for them to pay the city $1 million the first AND second year when the project was completed. I have an unconfirmed report that EL will not be held responsible for the second $1 million.

And speaking of weird things happening at City Hall, check out this photo of Deputy Chief of Staff Terence Fontaine during a bike ride with Mayor White this past weekend. Is that a Dallas Cowboys t-shirt?? At the same time YOUR Houston Texans were playing the "biggest home game" in their history? Shame on you, Terence. That's about as stupid as me wearing my Troy Aikman jersey to the Texans-Cowboys first game at Reliant Stadium. I still have scars and bruises.

Wi-Fried

Mayor White announced during City Council Wednesday that EarthLink will pay the city $5 million for not meeting its first deadline for building a wireless network across the city.

A Chron story spells most of it out but the reader comments are pretty harsh. Some are pissed at EarthLink; others are ticked at the mayor and the city. Both sides make good points but here are my thoughts after talking with my contacts close to the project between Houston and Atlanta, where EarthLink is based:

• Houston, as of now, comes out smelling pretty good. The City is $5 million richer than it was when the RFP began last year and it has learned valuable lessons. They know what issues in the process need improvement and thus have the knowledge to rectify those if they enter another contract.
  
• Why did EL pay the whole $5 million penalty fee when they were only the line for $2.5 million if they missed their Year 1 (of 2 years) goals? According to my sources, EL put up a $5 million letter of credit when they signed the contract with City Council. The money was sitting in a fund so they will soon release it all to the city.
  
• Apparently EL still has the right to build out the network, at least for the next 9 months. EL will look at many ways to see if it is possible for them to complete the project alone or with a partner (i.e. Google). To recoup their money, EL may want to find a company to buy those rights to build a network. Though I believe the city has the right to refuse any company that comes in. At the end of the day, EarthLink's primary goal is to raise its stock price - not just build a wireless network. Since August 8, their stock price has risen 20% probably on speculation they may be pulling out of the municipal wireless business.
  
• As of now the whole project is in a holding pattern. The Digital Houston website which is hosted by the city is not being updated regularly. Mayor White and his city IT department are weighing options of building out the network themselves - starting downtown - and opening it up for other city services (they now have a well-funded coffer to use). Some speculate the entire project be put off until better technology catches up such as WiMAX.

Any way you slice it Houston will not have a citywide wireless network in the very near future. So the debates continue - public or private operated system, free or subscription, ad-supported or sponsor-free. I'm all for Internet access everywhere and I'm relatively happy with my wireless laptop cards now.

Let's just hope Mayor White doesn't push this issue too far and too fast for the wrong reasons like leaving a lasting legacy. We know where Lee Brown's legacy is today.

EarthSink

The ship is going down fast at EarthLink headquarters in Atlanta. At least the part that controls the Municipal WiFi division. Drop the lifeboats because its almost underwater and that could include the Houston WiFi deal.

As I first ranted last week, the buildout has been past due and calls and emails to EarthLink have not been returned. I now know why.

I had been trying to contact Don Berryman, Executive VP and the President of the Muni Wireless division. Oops, he gone.

I spent time with Mr. Berryman on several occasions this year. First when the City signed the agreement with EarthLink in February (podcast link not working) and then when I moderated a community roundtable on the subject in May. Mr. Berryman was one of three panelists who was touting the virtues of a citywide WiFi network.

He was very upbeat about the project - as he should have been - but he never tipped his hat to pointed questions like when the buildout would begin or exactly how much the project would cost them to build the network. Maybe he didn't know.

From what I hear from my contacts close to the project (or what's left of it) is that Mayor White will make a statement about the City's realtionship with EarthLink and the project tomorrow. I still believe he will announce that the City will continue its push to build a network and that it will do so itself, beginning with the current downtown WiFi system that allows parking meters to communicate to central servers.

Oooma. Big Weekend. Clear!

I'm upgrading Casa Garfield with new home automation features. The stuff I put in four years ago is almost obsolete now. The new Crestron touch-screen panel looks great in the kitchen wall; now I just need to find somone to replace sheetrock... Photos and updates soon when installed.

Had to stop programming the thermostats and cameras when the doorbell rang. Ding dong, it's DHL with a delivery. Helloooooo ooma! Yes, I'm a lucky White Rabbit beta tester. Of all the packages I've been delivered from companies and press agents, this is hands-down the sharpest of them all. Very Apple-like packaging - simple, elegant, inviting.

I'll report back soon with my thoughts on the service which provides free phone calls to any phone number from regular phones. It's installed and works nice so far.

Lots of schtuff hapnin' this weekend. I'm gonna do my best to stop by BarCamp before my show on Saturday. The local arm of an international network of "unconferences," BarCamp will feature tech sessions and workshops like Grid based web design (taught by my boy, Kelsey Ruger), Challenges & Strategies for enterprise adoption of Web 2.0 and how to create Flash presentations in your browser.

If I really wake up early and get out the door quickly I can also hit UH to check out Houston TechFest. That's where my brain will really explode from learning Object-Oriented Programming in .NET and an Introduction to C# 3.0, among other classes.

Tune in from 1-4pm as we're expecting a call from Laurence "Second Life" "Crapman" Simon. He's in Chicago at a Second Life conference. Wonder if that an extra extra long distance call...

In-studio guests include Dr. Victor Miranda from the soon-to-open Emergency Health Centre in Tomball. He and his partners are launching a multi-million dollar concierge medicine facility next week. I took a tour this afternoon and if I ever need quick medical attention it may be worth driving 40 minutes from my home to go there. Amazing equipment that should save time and lives including a $1.4 million 64-slice CT scanner, the first scanner capable of providing clear images of the heart and its major vessels in less than five seconds.

Maybe Earthlink should send its Municipal Network division and Houston WiFi project there since it seems to be on life support.

Is the City's Earthlink deal "ovah"?

Summer has come and almost gone and Earthlink has yet to start the build out of the City's 600+ square mile wireless network. Am I surprised? Not really.

It is a big undertaking on many counts. 18,000+ wireless access points installed on lightposts, buildings and towers. $50 million+ in costs.

But Earthlink is taking a long hard look at the revenue projected to recoup their potential investment. With a new CEO who may have a different agenda from building municipal wireless networks. Rolla P. Huff is now running the Atlanta-based company; a telecom vet known for his willingness to cut loose unprofitable projects.

If I was a betting man (and I have been known to frequent Vegas), I might put down some shekels on Earthlink cutting its losses by paying the City the $5 million penalty fee for not completing the network build out. (see contract here)

With Earthlink or not, the City is planning to move forward with a WiFi network. Richard Lewis's City IT office recently launched a web site that will soon be updated with opportunities for WiFi jobs and partnerships, economic development information and - believe it or not - sponsorship opportunities.

There are currently 100 or so radio towers around the city outfitted with WiFi gear. Downtown Houston has a system in place for parking meters, all libraries are hotspots along with Jones Plaza, the GRB Convention Center and Miller Outdoor Theater is planning for a system. That $5 million could go a long way to connect all these systems for a ubiquitous government wireless network to be used by Police and Fire.

Then as the system becomes more robust it could be open for public access. Since the City has no intention of running a consumer network, they could outsource the maintenance and operations.

So now we wait for Earthlink's Board of Directors to announce their plans. From what I understand they met today. Will they ask the City to pony-up for capital costs or even ask for a delay? In the meantime, just cruise to one of the many already-up-and-running local hotspots and fire up your laptop.

WiFi Roundtable

Great to see so all the people who attended the roundtable at American Intercontinental University on Thursday. Some really good questions were pointed towards the panelists:

• Don Berryman - President, Earthlink Municipal Networks
• Janis Jefferson - Deputy Director, City of Houston IT Dept.
• Manuel Rodriguez - President, HISD Board of Directors

A few good answers came out of it, too.

• The build-out will begin around July 1. Only hurdle left is for Earthlink to sign agreement with Centerpoint for the usage rights to their light poles.
• Earthlink must complete 1/2 the network build-out within 1 year of that start date. A steep $$$ penalty woulld levied if they don't hit that mark.
• The entire project must be done within 2 years from the start date.
• Zones will be built and "lit up" after the City deems them ready and working. The first zone most likely will be in and around downtown Houston.

As The WiFi Turns

Calls and emails continue to come in regarding citywide WiFi. Still a lot of questions from the public. Mainly:

• How come it won't be free?
• Will I need to get new gear to receive the signals?
• How secure will it be?
• If it's not as fast as DSL or cable then why do I need it?
• Why is the city government getting involved in this?

All fair questions indeed and each is something that individual users need to determine if they should subscribe and use the service when launched. My top level thoughts continue to be that if you don't want to use it then don't use it. (Maybe I'm a bit biased since I live in Ft. Bend County)

And I continue to remind people that the city is involved as they can make deployment easier by providing access rights to light poles and buildings for the thousands of routers and base stations.

But unless an ISP is going to offer really cheap or free access (maybe, but probably not) there are other inexpensive options. AT&T offers DSL service for $14.95 (not their highest speed) and due to a clause with the Bell South merger that price will soon go down to $10 bucks in some areas.

Convergent Broadband, the company that didn't get the city contract, has been relatively quiet. Founder Don Jordan provided a gracious to quote to the Chronicle but his partner Mark Singleton opened up a bit to Chron reporter Alexis Grant.

Apparently he is disappointed with the city moving forward with an Atlanta-based company. But you've got to love his quote: "It is a slap in the face of all Houstonians to not use High-Tech Texans."

Just remember, AT&T is based in San Antonio.

WiFi Podcast

In case anyone missed my interview this morning with the mayor, City CIO Richard Lewis and Earthlink Muni Networks prez Don Berryman, here is the link to the podcast. Click the Wed, Feb. 14th, download.

T-minus 27 months....

The WiFi Word Is Out

Just got back from the mayor's presser at City Hall where the "big secret" was revealed. Earthlink Municipal Networks was selected as the company to build the city's wireless network.

Mayor White elaborated on the details as specifically as he could:

• The project is expected to take up to 27 months to complete


• The next steps are for city council to approve the recommendation, sign a definitive agreement with Earhtlink and then a term sheet


• Expected cost to Earthlink is initially $50 million


• Approx. 95% of the city will have WiFi coverage


• The price for subscribers depends on the individual ISP. Some ISPs who use Earthlink's access may charge nominally for this service while others could possibly offer it for free depending on their business model (i.e. ad supported)

I spent a few hours during the day providing comments to several media outlets - KTRH, Channel 11, Fox 26 and CW39. Also lined up a slew of guests for my radio program Wednesday. The lineup as of now has Mayor White calling in a the top of show before he begins his weekly city council meeting. City CIO Richard Lewis and Earthlink Executive VP Don Berryman will join me in studio to answer listener questions. Umesh Verma will call in later to talk about the Greater Houston Partnership's role and how businesses will be able to utilize the network's resources.

I'd be interested to chat with a Convergent Broadband representative to get their take on the selection process. Interestingly enough they learned they were not the chosen company from my blog and radio show Tuesday morning. (Note to Don Jordan and Mark Singleton, please drop me a line if you would like to comment).

Got a question about the project? Leave a comment below or call in Wednesday between 9a-10a at 713-212-KPRC.

Houston, We Have Wireless (Sort Of)

As I buried the lead this morning on my show, Earthlink Municipal Networks has been chosen by the city of Houston to build out and manage a 600+ square mile wireless Internet network. Mayor White will officially make the announcement this afternoon at City Hall.

The mayor will be joining me at the top of my show Wednesday to discuss the selection process and next steps. Richard Lewis, the city's CIO, and a rep from Earthlink will also be in-studio to field questions from listeners.

BREAKING NEWS v2.1...City One Step Closer To WiFi

It's been almost a year since the City of Houston announced an RFP to build out a wireless network. Last October negotiations began with two companies to finance and manage the system - Earthlink and Convergent Broadband.

A wireless network covering 600+ square miles of our city would qualify Houston as the world's largest WiFi network, that is if WiFi (802.11 standard) is the chosen technology. Yes, there could be more solutions to delivering non-wired connectivity.

Look for announcement next Monday (Tuesday at latest) on the company selected to spend tens of millions of dollars to create and manage the infrastructure. I will have reps from the City and the "winning" company on my radio program the entire hour the day after the announcement.

Stay tuned...

UPDATE: Press conference just called for Tuesday at 4pm at City Hall.

UPDATE 2: Just for the helluvit and background research...