The city of Augusta, Georgia is going ahead with its plan to deploy a large wireless network (4 square miles) in partnership with a local ISP. According to Informationweek, the city will cover most of the capital cost of the network but will hire an ISP to operate the network and share revenues with the city. An RFP is expected in 2 weeks and if all goes according to plan, the city will have the network up and running by fall 2008.
This is is a variation on the anchor tenancy model in that Augusta is contributing funds toward the development of the network. In this case, as in the anchor tenancy model, the ISP does not bear all of the risk. Apparently wireless ISPs in the US do not believe that they can recoup their investment in a short period of time if they alone bear the cost.
Click here (Muniwireless initiatives database) for more info.
If you have to compete against DSL and/or Cable, the prospects for WISPs are indeed dicey, and capital is at moderate risk. Their belief is founded in market analysis. Location, location, location, is the primary determinant of WISP success.