A Tale of Two Cities, Part II

By Gerry Blackwell

June 16, 2004

When the city is the ISP, moving to becoming a wireless ISP is even simpler -- and potentially very successful -- as they're finding out in Chaska, Minn.

Previously we looked at a grassroots effort in Portsmouth, N.H., to provide citizens and visitors with free high-speed wireless Internet access. Chaska, Minn., just south of Minneapolis, a city about the same size as Portsmouth, is going at it in an entirely different way.

In Chaska, the city has been involved in providing commercial Internet services for over five years. It built both a fiber backbone network and a point-to-multipoint 2.4GHz wireless access network to provide local businesses with broadband access.

"A lot of that initiative was based on availability in our city, and cost," says Bradley Mayer, information systems manager for the city and for Chaska.net, the city-owned access services provider. "Either broadband access wasn't available at all, or it was so ungodly expensive that nobody could afford it."

The Wi-Fi project, announced last month, is an extension of the original Chaska.net initiative. While not unprecedented, it does move the city to the leading edge among Wi-Fi communities.

Chaska is implementing a Wi-Fi access system using mesh technology from Tropos Networks. When fully deployed at the end of July, the system will include 200 access points, and will cover the entire 16 square miles of the city.

With the Tropos technology, the city will be able to provide in-building and mobile coverage for users equipped with high-powered Wi-Fi network interface cards -- including police in cruisers -- and access in most places outdoors and indoors near windows with just a standard Wi-Fi card.

"As we've built it out, we've done testing indoors and outdoors," Mayer says. "We're fairly confident it's going to work pretty well. I can sit in my office and log in to an access point a quarter of a mile away pretty reliably, and that's through a brick wall, trees, another building. And I'm still getting about 1.5 Mbps."

Police will use the network to communicate between cruisers and the police station. Other city workers -- including fire fighters and building inspectors -- may also eventually use it. The real rationale for building the network, though, was to extend broadband access services to private citizens.

The perceived benefits, as in most Wi-Fi communities, have to do with economic development and community building. Availability of inexpensive broadband access will attract both new residents and small businesses, Mayer believes. He has already heard from people now considering Chaska just because of the Wi-Fi service.

"It's one way to make city grow," he says. "It draws people to Chaska."

The other benefit is less tangible. "Chaska has always had this real tie to traditional small-town community values," Mayer explains. "Everything thing we do here from the parks to the Internet access is driven by that sense of community."

"This is just one more thing that brings the community together. It allows everybody to have access to something that in other places isn't available or that only people with a lot of money can afford to have."

Providing residential service was something Chaska.net always intended to do. "Now the technology to do it cost effectively is available," Mayer says. "And there are enough users out there who want broadband access -- but who aren't prepared to pay $50 a month for it -- to make it work."

The city may have underestimated the pent-up demand for low-cost broadband service. When it announced the Wi-Fi project, it invited citizens to pre-register for service. At the time of writing, only a couple of weeks after the announcement, 750 people had already signed up. Mayer expects 1,000 pre-registered subscribers by the time the service launches.

It's no wonder. Chaska.net will charge residential subscribers just $15.95 a month for burstable service, up to 3 Mbps. The price includes the loan of an Engenius Senao Wi-Fi bridge from Keenan Systems LLC, which will provide in-house access with no rooftop antenna or installation required by Chaska.net.

The residential package gives one device access to the network. If subscribers want to be able to use the service at home and also when roaming around the city with a laptop, they have to move up to the $24.95-a-month small business package, which provides three IP addresses. They'll also need an Engenius PCMCIA card, which costs about $55.

"The reason the Engenius card was chosen is that it's higher powered -- it's a 200-miliwatt card," Mayer explains. "That's quite a bit more power than your typical D-Link or Linksys cards which are 40 miliwatts."

The extra power extends coverage into buildings and moving vehicles without requiring roof-mounted antennas.

With the Tropos mesh technology only about 20 of the 200 access points need to be attached to the backbone. The rest communicate with the "backhaul nodes" by hopping from one access point to another wirelessly. Half the backhaul nodes are located near and directly connected to the fiber backbone, the other half connect via the existing 2.4GHz wireless access network, which uses proprietary software from KarlNet.

The capital costs of building the mesh network and launching the Wi-Fi service will come to about $480,000. It would have been a lot more -- another $750,000 at least, Mayer estimates -- if Chaska didn't already have the fiber and wireless backbone.

Chaska.net took out a loan from the city to get started, but the service will ultimately be self-supporting.

The company built two financial models, Mayer says. In one, if it reached 1,400 users at a rate of about 200 new subscribers per month, the network would pay for itself in four years. If it got to 2,000 users at a similar clip, it would pay for itself in three years.

"I expect, based on results to date, that we'll easily surpass 2,000 users," Mayer says.

We wondered if any local broadband access providers had cried foul at the prospect of taxpayer's dollars being used to launch a service that could seriously erode their markets.

"Luckily, I don't have to get involved in those discussions," Mayer quips.

That said, no local providers have come forward to protest, he says. "It's hard to say why. You would think they would have that reaction."

He speculates that companies potentially hurt by the city initiative may believe there is no point in protesting given the small likelihood of it making any difference in the unregulated Internet environment.

He also points out that the city is not running Chaska.net as a subsidized service. All the money borrowed to get the service going will ultimately be paid back in to city coffers and the service will operate on a cost-recovery basis.

Will other city's follow Chaska's lead? Mayer points out that others are already taking initiatives using non-Wi-Fi wireless technology, but few if any others have done it with Wi-Fi.

"That has to do with the fact that until Troops, there wasn't an easy way to take Wi-Fi and make it metro scale," he says. "But now that systems are available, a lot more cities are looking hard at doing this. We've already talked to six to ten cities right here in the metro [Twin Cities] area that are considering doing the same thing within the next year."

There may be a political-philosophical issue at stake here. Is broadband Internet access vital enough to a city's economic well-being -- like water, power, sewerage -- that the municipality should be offering it at cost as a utility?

Few enough cities are doing what Chaska is doing to make it an issue yet, but if this becomes a trend, as Mayer suggests it will, look out. At some point, it will dawn on commercial broadband access providers that their livelihoods are being threatened.

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