MetroFi Admits Defeat

By Naomi Graychase

May 19, 2008

It looks as if MetroFi is joining EarthLink and Kite Networks amidst the ranks of mighty muni players who have fallen.

It looks as if MetroFi is joining EarthLink and Kite Networks amidst the ranks of mighty muni players who have fallen. While the company has not issued a formal statement or made any announcements at its Web site (and has not yet responded to an interview request), bloggers are reporting that MetroFi is looking to sell its muni networks—and perhaps the company itself.

One of the affected cities is Portland, OR, which has, until now, been home to the largest planned consumer-oriented muni wireless network in the country (approximately 134-square miles, roughly the size of Philadelphia’s network). Most observers estimate the network in Portland is currently about 25% built out, possibly less.

Dailywireless.org, a Portland-based Wi-Fi blog, quoted a letter from Chuck Haas, MetroFi CEO and President, sent to the City last week, which apparently said, “MetroFi’s goal was to have the City of Portland network producing enough revenue to cover expenses and even with the roll out of Microsoft SideGuide, the best advertising platform we have for Wi-Fi revenue generation, we are still not covering our costs for network operation and maintenance…MetroFi has three options to consider. The first is for the City to purchase the network from MetroFi; the second is to sell the network to a 3rd party; the third is to shut the network down."

The letter goes on to suggest that the network be valued at $1500 per AP—or $894,000. [Read the full text of the letter here.]

If a deal with the City or another buyer can’t be reached by next month, the company will shut down the network.

No city money was lost on the Portland network’s deployment or on operating expenses, although roughly a quarter of a million dollars in tax-payer money was used to fund the planning and oversight.

As with EarthLink in Philadelphia, the ISP seems to have underestimated the cost of deploying and maintaining the network and is now seeking to cut its losses.

It seems likely that the 16,000 or so users a month who were said to be using the MetroFi system will have to look elsewhere for their Wi-Fi starting sometime this summer. Among their options are the usual hotspots—cafes, bookstores, libraries, campus locations—as well as the 100 or so public nodes operated by the Personal Telco Project, a Portland-based non-profit made up of volunteers who “believe that Wi-Fi technology is both cool and empowering.” The eight-year-old non-profit organization currently has more than 100 active hotspots and would like to eventually “cover the entire city.”

While MetroFi has risen and fallen—and spent $15,000 a month just in operational fees—this group of volunteers has continued to expand its coverage. Perhaps slow and steady will win out in the end, in the long race to municipal Wi-Fi viability.

For more on EarthLink’s predicament, read “EarthLink Ends Philly Wi-Fi.”
For more on MetroFi, read “MetroFi's Ad-Supported Wi-Fi.”
For more on ad-supported models, in general, read Jeff Goldman’s excellent piece, “Making Cents of Ad-Supported Wi-Fi.”

Naomi Graychase is Managing Editor at Wi-FiPlanet. She has been covering technology for fourteen years.



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