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