Is Free, Ad-Support Muni-Fi Already Dead?

By Eric Griffith

April 03, 2007

No, but provider MetroFi is changing its business model to require municipalities to become anchor tenants.

MetroFi has long been the leading champion for providing cities with Wi-Fi that would be freely accessible to all, albeit at a slower data rate and with advertising.  Last week, an article in the Beacon News, as noted by Wi-Fi Networking News, reported on delays in the Illinois towns of Batavia, Geneva and St. Charles getting service from MetroFi because the company "changed its business model and is no longer offering free Wi-Fi to municipalities it is not contracted with already."

As it turns out, that is not the case. They'll still offer free service, with ads to pay for it. What is changing is that the cities themselves can't expect not to be part of the equation.

Previous contracts with MetroFi did not require cities to buy service from the WISP. It may have been strongly suggested, but wasn't a given. The change is that MetroFi will be asking cities to purchase at least some services.

Craig Settles, a Muni-Fi analyst, says, "This reflects MetroFi's comments to me in a private briefing that it is impossible to sustain the cost of building and operating a muni network primarily on ad sales revenue."

The Tri-Cities in Illinois wanted the same deal as previous MetroFi customers like Portland, Oregon, where they paid nothing for installation and had no commitment to paying to use the network. Settles believes that the Tri-Cities, "reflecting the blurred vision of too many municipalities, responded by rejecting the option to buy network services." He says use of those services could save the cities money in the long run.

Chuck Haas, CEO of MetroFi, told MuniWireless this week, "the definition of anchor tenancy has been evolving as the market has matured. With each RFP and each city deployment, we get smarter and smarter about how to really maximize the value of this network." He says MetroFi remains committed to free, advertising-supported Wi-Fi, but that municipal use of the network "is the way the value of these networks gets maximized."

Settles agrees, saying, "Local governments must face the reality, as a growing number are starting to do, that demands for a 'free' network paid for exclusively by service providers and vendors will result in municipalities squandering a great opportunity."

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