Philly's Wi-Fi Receives Stay of Execution

By Naomi Graychase

June 17, 2008

Local investors have stepped in to save Philadelphia's doomed Wi-Fi network. But can their plan, which is partly based on the yet-to-be-successful ad-driven and non-profit models, really work?

At noon (EDT) today, Philadelphia Mayor Michael A. Nutter and representatives from Wireless Philadelphia, the nonprofit organization tasked with running the project, announced at a press conference held at Philadelphia’s City Hall that a plan has been hatched to save the city’s Wi-Fi network.

After the network was abandoned by EarthLink due to a flawed business model that failed to sustain the network adequately, City Councilman Bill Green became proactive in his quest to resurrect the seemingly doomed muni Wi-Fi project. He was able to connect with a local investor group, Network Acquisition Company (NAC). Under the terms of the agreement announced today, NAC will assume operation of the existing EarthLink infrastructure and will improve and expand the network as part of a plan to eventually bring free wireless to the City. 

Rick Rasansky, a Philadelphia-based entrepreneur and co-founder of the Mid-Atlantic chapter of a global wireless networking group called “Mobile Monday,” is also a co-founder of NAC and is taking the lead on the project on behalf of the investor group. The deal, which involved cooperation between Councilman Green, the Mayor’s Office, the Law Department, MOIS, and the Managing Director’s Office was brokered in just a few weeks. According to a Mobile Monday press release, “The deal will safe-guard the future of the network, following EarthLink’s controversial decision to terminate the service.”

EarthLink has “invested millions of dollars in building the city-wide Wi-Fi infrastructure—at zero cost to the taxpayer. The City’s efforts in making the vision of muni Wi-Fi a reality, and the potential impact on narrowing the digital divide, [have] been acknowledged on a global scale,” said Rasansky in a press release this afternoon. “We felt that the unique business and community opportunities that would be made possible by ubiquitous Wi-Fi coverage in Philadelphia more than justified the additional investment needed to complete the network build, so we set out to bring together a group of local investors and businesspeople to keep the vision of Wireless Philadelphia alive.”

Currently, the network covers roughly 80% of the city. According to Councilman Green, effective use of the network could save Philadelphia $3 million per year in the short-term and up to $10-15 million per year in the longer term.

No specifics were given about how exactly the investors expect to succeed in making the project profitable, but a statement issued late in the day at the Wireless Philadelphia Web site said, "The local investor group will fund citywide free wireless by providing integrated wired/wireless telecommunications services for large customers such as hospitals, universities, and wireless extensions, as well as moving to an advertising-based revenue model."

The Web site also quoted Mayor Nutter as saying, “I am so pleased that my Office was able to partner with non-profit, for-profit, and community groups to get this deal done. This is an important first step to reducing the digital divide.”

Since both ad-funded and non-profit-supported models--particulary those which emphasize offering free Wi-Fi to residents--have yet to succeed, this new plan may only be a temporary stay of execution for Philly’s city-wide Wi-Fi.

As for EarthLink, Rolla P. Huff, EarthLink's Chairman and Chief Executive Officer, is quoted at the Wireless Philadelphia site as saying, “EarthLink is pleased to have transferred ownership of our Philadelphia municipal wireless network and applaud Mayor Nutter for his efforts. We will work closely with the new owner, our partners, and our Wi-Fi customers on a smooth transition of the Wi-Fi network. We believe this is a positive outcome for our shareholders and the Philadelphia community.”

Tonight at 7p.m., Mayor Nutter is scheduled to address the issue further. According to the Philadelphia Enquirer, as of this morning, 600 people had already RSVP’d for the event, which will be held at the Academy (19th Street and the Parkway) and is open to the public.

Update: For more details on the NAC plan of attack, read June Newsbits.

For more on EarthLink and Philadelphia’s network, read “EarthLink Ends Philly Wi-Fi,” "EarthLink Scores with Philadelphia," and "EarthLink to Sell Off its Muni Wi-Fi Business."

For more on muni/metro deployments, read "Wi-Fi Finds a Niche in Public Safety," "Muni Mesh Proving its "Mettle" in Minneapolis," and "Boston Banks on Non-profit Model."

For more on digital divide initiatives, read "Bringing Wireless to Rural Areas," "Opinion: How Free Wi-Fi Hurts the Poor," and "Bridging the Gap in Houston."

Naomi Graychase is Managing Editor at Wi-FiPlanet. She is based in Western Massachusetts.



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