It had such promise -- a wifi network, treated like a city utility such as water or sewer, providing broadband Internet to everyone in the city, anywhere in the city, for a low monthly price.
Yet vendors in cities such as Portland, and even the municipal wireless flagship Philadelphia are telling the city governments that they're not making enough money, that they can't even sell the networks or give them away, and that the cities need to run them themselves or they'll be shut down.
It's ironic, because just a few years ago, major telecommunication vendors such as Comcast and Verizon were working with state legislatures to keep cities from starting up the supposedly lucrative municipal wireless networks in competition with private vendors.
Critics now are blaming the vendors -- Earthlink for Philadelphia and MetroFi for Portland, as well as for several California cities, from which it is also trying to pull out -- for using a business model where they knew they wouldn't make any money (but presumably would make it up on volume?) and for being overly dependent on advertising that didn't materialize -- and the cities themselves, for insisting that the vendors implement the networks using no taxpayer money, and without even committing to use the service themselves.
Dianah Neff -- the Philadelphia CIO who engineered the deal with Earthlink -- is no longer with city government; she joined the public broadband consulting firm of Civitium in 2006. The firm, noting its connection with the Philadelphia project without referring to Neff by name, has released a six-page memo with its view and analysis of events.
Civitium's analysis attributes the failure of the Philadelphia project to four main factors:
1. Differences between the shareholder goals of a public company and the public service goals of a city
2. Leadership changes at both Earthlink and the city itself
3. Limitations in the technology that were not apparent until the project took shape
4. Lower costs and better service among the competition
Civitium also points out how unlikely it could be for Philadelphia to accept the network, even for free, given that Earthlink is reportedly losing $2.4 million per year on it. But the company -- predictably, perhaps -- still sees a future in municipal networks. "[T]here remain many opportunities for cities to leverage Wi-Fi and other technologies for targeted municipal use, and to make broadband less scarce and more abundant in communities," Civitium goes on to say.