MetroFi selling muni Wi-Fi networks in Portland and other cities

MetroFi is trying to sell its citywide Wi-Fi networks in Portland (Oregon), Aurora and Naperville (Illinois) and Santa Clara, Cupertino, Sunnyvale, Foster City and Concord (California). MetroFi founder, Chuck Haas, says he is also exploring the sale of MetroFi itself to a third party.

MetroFi is the latest service provider to exit the municipal wireless business. EarthLink has decided to shut down its network in Philadelphia and to stop the rollout of its network in Houston; Kite Networks, which had deployments in a number of municipalities, has gone bankrupt.

MetroFi had told Portland, its largest city project, that the company could not continue unless the city makes some financial contribution. In some cities like Minneapolis and Riverside, the city pays the provider for its own use of the network. In the cities where MetroFi and EarthLink have won projects, the cities wanted them to build out the network for free. MetroFi and EarthLink underestimated the cost of deploying the network and also the amount of money they would make (in the short term) from advertising and subscriptions.

I agree with Glenn Fleishman’s assessment:

EarthLink was in many ways largely responsible for the mess that all Wi-Fi providers found themselves in last year by offering to build Philadelphia’s network back in 2005 at no cost to the city—in fact, paying the city and the local utility fees. That set the stage for nearly all the RFPs that followed where, if EarthLink were a bidder or the city was aware of the alternatives, the notion was that no city dollars would be spent, even if taxpayer money wasn’t “at risk”—that is, even if a city could save money by switching current line items in their telecom and data budget to a wireless network.

Read my earlier post on EarthLink’s decision to shut down the Philadelphia network:
EarthLink notifies Philly subscribers of network shutdown

Comments

  1. Wow…no one saw that coming. lololol
    FREE was never going work! Too little too late….oops.

    I wish Chuck and the gang good luck! They are hiring at WalMart.

  2. Eugene B Schmuck says:

    Really?!? It’s all Earthlink’s fault?

    Not that they had the best business accumen, but the other companies did NOT have to bid if the economics didn’t make sense.

    Rather than pointing the finger and saying “Not my fault!”, why not review why you made a bid for a project you “knew” you could never make profitable.

  3. Esme Vos says:

    You’re right, other companies did not have to bid. But those that did put in bids and wanted the city to pay for some of the costs lost out. So the cities started copying other cities’ RFPs. Nothing wrong with using templates but in some cases, the RFPs were almost perfect copies of another city’s RFP. I kept warning cities in my posts NOT to copy another city’s RFP, rather to come up with one that really meets their needs (which includes using the network for municipal applications and by implication, paying for it — after all, they pay HP, IBM, etc for services/equipment too). Alas, some cities preferred the cut and paste model.

  4. I like how Earthlink gets blamed when both Earthlink and Metrofi copied the same stupid business plan model. What I still can’t get to this day is what morons were reading those business plans and actually investing in them. The sad part is that Wifi now lost 4 years of development when it really could have made a difference.

    Now that the 2 major egotistical idiot companies are gone along with millions of dollars of their poor sap investors, it’s going to be that much more difficult for legitimate and intelligent profitable models to be deployed. There are many areas with properly priced equipment where Wifi can make a huge difference. The problem is that the same people who make the decisions in goverment and are generally clueless about technology are going to point to this model failing. Of course it failed. Free is not a business strategy. That’s why we changed our business model when we saw what these guys were doing.

    Starting over, Philadelphia has 5000-6000 paying clients. That means at least $120K in revenue per month. Get rid of the excessively overpriced equipment and outdate LEC data lines, minimize the Capex cost and there really is a reasonable business plan hidden in there somewhere. Add in other city functionality for utilies, public safety, and inspections, and gee, maybe this really works.

    It’s time some intelligence gets applied back into the Wifi model. Real companies that are managed by people who really want to make money and have some clue of what a profit actually is, can now get back to work and start rebuilding the WiFi model the way it was supposed to have done. The managers like Chuck Haas and Earthlink’s wireless division managers need to go back to school and learn that businesses aren’t made by sucking up investors money until it dries up but by creating a reasonable business plan that makes a profit and has benefits for the client.

  5. RickT says:

    Hey Glenn,

    You are forgetting to blame more of the real culprits

    1)Civitium- they wrote and recycled that same RFP to everyone (scum bags, hey how is that lawsuit agianst me coming…slander, really?)
    2)Esme – Had no idea what she was talking about but thought wi-fi was cool, so she helped create this wave of stupidity (dont make me start citing your push for the EL model, in retrospect you now think it was a bad idea? unreal)
    3)Dinah Neff – The architect of philly deal who then took a job with Civitium after the philly project began breaking down
    (ha this is the best one lololol)
    4) You Glenn – for lending credence and the technical know how to convince those who had no clue and differed to your technical expertise in evaluating the feasibility of this boondoggle.

    Earthlink actually lost, you four, I suspect, are still making money by riding this crashing wave to the shore. So blame others all you want but I know and you know (I hope) that you are just as guilty as EL.

  6. You know Rick that I have to agree with your statement about convincing people who had no clue about the technical feasibility but the blame there applies to everyone. For example, manufacturers were touting ranges and bandwidth numbers that were either outright lies or were hiding issues with the product. Here are a few examples:

    1) Starting with Vivato who was claiming 2.5 miles to laptop users and that a switch could handle 1000 users. They failed to mention that they couldn’t handle more than 50 users simultaneously (the MAC address table could store 1000 users) a time or to get the 2.5 miles they had to turn off the power everywhere else on the switch making it a single beam access point. How far it went is a whole different discussion but it wasn’t 2.5 miles to a laptop in any city I know.

    2) Every vendor with a single radio solution. A half-duplex radio handling users and linked in any kind of a chain has an effective bandwidth 1/4 of it’s rated maximum speed under full load. However, that’s not really mentioned anywhere in the marketing documentation.

    3) Then there is the theoretical maximum number that is really UDP, not TCP/IP that is marketed in the brochure without a little asterix telling us it’s UDP. One vendor got me on that one until we tested the product. Then they admitted it.

    4) Training classes for network engineers trying to teach them the basics of RF. However, very rarely did they cover the concept of attenuation. If they had, most of the cities wouldn’t have had to add twice as many access points as their original designs.

    5) On that subject, who were the idiots that did the original designs? Did they not walk the areas or were the so inexperienced that they didn’t realize that a tree full of leaves has a higher attenuation factor than one without leaves. Of course there is also the, “I didn’t realize there were so many hill” statement too.

    6) Consultants like Balco and Civitium that had no clue about the technology. They were touting their brilliant successes all the while having no idea how they were failing. I’m still not sure if Balco was in the pocket of HP/Tropos or if he was just incompetent but I know he screwed up the Sahuarita project so bad that they blew $300,000 dollars only to find out they didn’t have street lights to put the equipment on.

    7) Government employees that were so busy congratulating themselves on getting “free” technology and so used to governments taking money from citizens that they had no clue what it takes to run a real business.

    I could go on for hours with this kind of stupidity or incompetence. Hopefully our company can reinstate the idea that citywide WiFi can be implemented in a profitable manner by doing Businees 101 basics. Keep costs low, find clients, scale as needed, make sure the product delivers it’s stated value, and make sure the statement of work is clear up front.

Trackbacks

  1. […] from Sevin Rosen & August Capital, is close to shutting down, according to WiFi NetNews and MuniWireless, two blogs that follow the MuniFi industry closely. MetroFi is trying to sell its citywide Wi-Fi […]

  2. […] from Sevin Rosen & August Capital, is close to shutting down, according to WiFi NetNews and MuniWireless, two blogs that follow the MuniFi industry closely. MetroFi is trying to sell its citywide Wi-Fi […]

  3. […] reported on wifinetnews.com, muniwireless.com, and the oregonian blog, MetroFi is throwing in the towel and has suggested that the city of […]

  4. […] einfach nicht. Wie man auf solche Ideen überhaupt kommen konnte, sollte man näher hinterfragen. MetroFi hat es uns als letzter der Serie gezeigt. Ins Gerede gekommen wegen “phorm” – […]

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  6. […] the Philadelphia wifi network, which so many people placed great faith in 3 years ago. And MetroFi is selling muni Wi-Fi networks in Portland and other cities. I’ve been reading some stories and […]

  7. […] ambitionierte Projekte, wie beispielsweise in SanFran, auf diese Weise den Boden unter den Füßen verloren. Nun scheint man sich, vernünftiger Weise, auf bereits vorhandene Alternativen zu besinnen. […]

  8. […] said that MetroFi would have a shutdown plan for gradually unlighting the networks.” MetroFi hat es uns als letzter der Serie gezeigt. Ins Gerede gekommen wegen “Phorm” – […]