Ad Funded MuniFi

Ad-funded MuniFi: Realistic?

Posted by samc on March 27th, 2008

It’s a bit behind schedule and somewhat over budget but, says Muniwireless, by the end of the month, the Minneapolis muni Wi-Fi network will be a reality. And, by all reports, folks there think it’s worth the wait.

The city of Minneapolis (pop: 369,051) is an anchor tenant on the system, operated by U.S. Internet, based in nearby Minnetonka.

USI has spent several million dollars on additional antennas and hardware to insure appropriate coverage, as Minnesota Public Radio reports (audio). US Internet had to increase the number of nodes per square mile from an average of 26 to 42 to combat interference and attenuation from some 200,000 boulevard trees.

As an anchor tenant, the city accounts for more than $1 million a year. So far U.S. Internet has signed up more than 5,000 subscribers. Company officials said 8,000 people have preregistered for the service. They predict the network will be self-sustaining once they reach 10,000 subscribers.

The Belair-based system proved its worth during the Minneapolis bridge collapse, say advocates, when the ability to put up live cameras and provide broadband emergency information became vital to police and fire agencies.

US Internet charges $19.99/month for 1 - 3Mbit/s with premium data rates of $24 - $29 per month. Cheaper than cellular, DSL or cable modems. Available city-wide.

Still, it’s hard to beat free. That’s the holy grail MetroFi hoped to achieve.

Portland signed a contract with Metrofi to build a “free” system in 2006 — without any “anchor tenant” dollar commitment by the city. MetroFi said they’d spend some $10 million on a 134 square mile WiFi network. But last fall MetroFi told the city it would stop building the network unless the city bought “anchor tenant” services. The system has stalled out with only 25% built.

The story has been repeated around the country. But most of those municipal wireless systems are based on a subscription model. The “free” model (with a premium $19/month ad-free option), is something new.

Yankee Group says cities with the population size and demographics of Minneapolis or Boston could realize as much as $7 million annually from advertising revenue once the network is fully built out.

The market for portable WiFi devices and location-based advertising is growing, so there may be room for cautious optimism. But the future is uncertain. Consumer demand and technological progress is always a wild card.

source : dailywireless.org