Anchorage, Alaska, has suspended its contract with MetroFi to provide downtown wireless services after it was unable to come to terms with the company over an anchor tenancy commitment. This has been a tough week for MetroFi which is dealing with similar situations in Corona, California, and Toledo, Ohio.Anchorage, Alaska, has suspended its contract with MetroFi to provide downtown wireless services after it was unable to come to terms with the company over an anchor tenancy commitment. This has been a tough week for MetroFi which is dealing with similar situations in Corona, California,and Toledo, Ohio.
According to an Anchorage press release, “In recent days, MetroFi officials insisted that the city commit to paying a monthly fee for city use of the network before MetroFi would build it.”
The mayor was quoted as saying he was still “enthusiastic about wireless technology and are disappointed about our inability to reach agreement with MetroFi‚Äö?Ѭ? Many cities have had similar experiences setting up wireless networks, so we’ll go back to the drawing board to come up with a plan that works for Anchorage.”
The announcement went on to say the city may reissue the RFP “after evaluating the conditions that led to the inability to reach final terms with MetroFi. The city will evaluate services it could deliver more economically through wireless technology.”
MetroFi released its own statement expressing disappointment at its inability to reach final terms with the city, saying “it has consistently been our position and understanding of the agreement that the Municipality of Anchorage would use the proposed Wi-Fi network for city services such as public safety. MetroFi’s “anchor tenancy’ requirement for all new city contracts has been widely reported in national, trade and local press as a fiscally-responsible business model for municipal Wi-Fi projects, and we have included this requirement in all of the17 municipal Wi-Fi proposals we currently have pending with U.S. cities‚Äö?Ѭ?.Unfortunately, this (Anchorage’s insistence on free service) does not align with our business model, and we were unable to negotiate a contract with this municipality as a result.”
Anchorage approved a tentative agreement with MetroFi last month. The company was one of six to bid on the project. According to the city’s press release, “The Anchorage Assembly approved a tentative lease agreement on June 26 after listening to assurances from a MetroFi official that there would be no risks and no costs to the city for the build-out of downtown. After the Assembly vote, the city was negotiating final terms before signing the contract.”
I hone with Glenn Fleishman’s observation that MetroFi’s insistence on anchor tenancy is no secret and it’s tough to believe that it was not discussed from the start. The Associated Press quotes the mayor as saying that the city wanted to make no commitment to purchase services until the network’s fifth year of operation. C’mon guys. These networks requires a significant up-front capital investment and it seems unlikely that many service providers would be willing to wait with baited breath for five years before seeing any kind of revenue that would help it recover the cost.
For more on the Anchorage situation, see the Associated Press story and Glenn Fleishman’s comments in Wi-Fi Networking News.
Implicit in this is the assumption that city government operations, especially public safety, can share the same wireless data network that the public is using. This assumption ought to be tested. Certainly among the public safety officials I have met, there is much concern that using a shared WiFi network puts the public safety mission at risk. Expecting the municipal government to be an anchor tenant may make good economic sense for the network investor, and may be prerequisite for getting a public muniwireless project successfully launched. However, a primary mission of local government is to provide for the safety and security of its citizens. It is the duty of the government to make sure a shared WiFi network will not adversely impact the performance of this mission. To date I have seen very little hard data for city officials to rely on, especially in the context of a large city.