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Jan. 16, 2007

San Francisco’s municipal Wi-Fi joint project with Google doesn’t pass feasibility tests as administered by city budget analyst Harvey Rose.

In a newly published report carried out at the request of the city’s Board of Supervisors, Rose concludes, “it may be fiscally feasible to build a municipally-owned wireless network.”

However, Rose also notes, “to assure initial feasibility and sustain future financial strenght, the city would need to continually work to contain and manage financial risk in the future in order to maintain a viable wireless service for every San Francisco resident.”

Rose says he reviewed projected wireless network capital expenditure needs and operational costs and weighed the estimates against projected revenue streams to determine the project’s fiscal feasibility.

Meanwhile, San Francisco’s Board of Supervisors, whose majority approval is needed in order for a network to be constructed, has been speaking out against Mayor Gavin Newsom’s plan to place Google and EarthLink in charge of building and maintaining the city’s Wi-Fi network.

The City board was presented with a contract proposal agreed upon by the mayor’s office and EarthLink last week, and they now have a little less than six months to vote on the contract.

Members of the board have complained publicly that the mayor’s office didn’t adequately consider the viability of a plan that involved a city-owned network.

The debate over whether the city should own the network or not comes down to two main factors: how much control the city ultimately will have over what services are offered to its citizens, especially its disadvantaged residents, and how the city would pay for the whole project.

Rose’s report determined that the fiscal impact of city ownership of the Wi-Fi network ranges from an annual funding shortfall of more than $1.44 million to an annual revenue gain of about $923,000.

Another point of contention includes EarthLink’s potential conflict of interest under the current proposal as both a service provider and a seller of wholesale access to competitors. In addition, Rose’s report questioned EarthLink’s policies around selling information about subscribers.

For the past several months, San Francisco has wrangled with EarthLink over Mayor Newsom's digital inclusion strategy that includes computer hardware, technology training and Internet access targeted at helping bridge the city's digital divide.

This latest agreement calls for Google to provide a free service tier while EarthLink will supply residents with a higher-speed, paid-for service.

The city is in favor of partnering with the private sector to ensure that its taxpayers will not be burdened with paying for the Wi-Fi network.

Overall, EarthLink has closed deals to provide municipal Wi-Fi networks in Philadelphia, New Orleans and several other cities.

Wi-Fi analyst Craig Settles believes Mayor Newsom’s office has mishandled the city’s Wi-Fi project. “What we have in San Francisco is the end result of an administration making a series of announcements and decisions that were more along the lines of telling the public what it was going to get rather than following what is accepted practice for any major technology deployment,” explains Settles.

“That is, you spend a lot of up-front time assessing end-user needs and wishes, you do technology due diligence to thoroughly examine your options, you come back to the end-user community with a demo or plan you wish to pursue and ask, ‘Is what we plan to build what you said you wanted?’ Then you go to RFP" added Settles.

“The analysis report basically says San Francisco failed to do these things in a sufficient enough manner to make the decision it did,” Settles continues. “The analyst (Rose) cites cases where the city changed course from what was expected initially and went against the advice of its consultant.

So, even though it’s gumming up the works, some of the supervisors feel that in the city’s long-term interest, they need to examine options the city should have examined more thoroughly from the beginning.”

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Source: Wireless Week