By now, many of you have read about the rescue of Philadelphia’s citywide wireless networks. The gist of events is that Councilman Bill Green felt the network was a vital city asset that should be saved, so he initiated contact with potential investors a couple of days after the last deal imploded in May. The new investors structured a deal in which they are creating a service provider, Network Acquisition Company (NAC, a temporary name), to finish and operate the network, and hiring people to run it:
- The WiFi wireless network will be integrated with other wireless and wired technologies.
- NAC will offer fee-based, big-ticket wired and wireless services for businesses, constituent blocks such as the city’s healthcare and education communities. This represents the heart of the business model.
- The City government has the option to create RFPs for wireless and wired broadband services and the company will be invited along with other eligible providers to bid on the RFPs. The City could potentially become the network’s largest customer.
- Wireless Philadelphia will have the same digital inclusion mission, though how they tackle this mission may change as a result of the new company’s involvement.
- Basic WiFi service will be available to the general public for free wherever within Philly they can access it, but the service won’t be supported by the provider or the City.
Precedence for Philly network business approach
The investor group’s planned approach reflects two muni success stories. Fredericton, New Brunswick in Canada partnered with 12 business stakeholders to commission a broadband network with extensive capacity to meet their collective city and stakeholder needs. Their excess capacity provides free outdoor Wi-Fi throughout the city. NAC will develop revenue-generating relationships with similar-type stakeholders and use the excess capacity to provide free outdoor WiFi access.
Minneapolis chose a local service provider with ties to that state’s communities, and contracted for services. Their provider has regional loyalty and focus, while the city can exert controlling influence as a primary customer to advance goals for the public good, but without major financial risk. Philly’s network investors have created NAC to be the local provider, and the City likewise has the potential to exert influence while minimizing risk.
What to expect
Philadelphia CIO Terry Phillis has identified areas where high-speed wireless can increase the effectiveness of the City’s mobile workforce, as well as improve management of mobile and fixed City assets. As Cambria County in western PA is demonstrating, if you build a network to withstand the rigorous demands of government communication, the resulting excess capacity can serve many constituent needs.
I expect that the mayor’s administration will soon start identifying ways to use the network to help Mayor Nutter achieve some of his more ambitious goals.
Definitely expect to see Wireless Philadelphia’s digital inclusion efforts increase as potential donors’ and service organizations’ confidence in the network’s financial sustainability increases. You have to give Wireless Philadelphia president Greg Goldman, as well as CIO Terry Phillis, credit for not giving up the fight after EarthLink bailed.
If the new owners review notes from focus groups conducted by the network’s steering committee in 2004, the provider should be able to quickly zero in on substantial business opportunities. Philly’s medical community was one potential network beneficiary identified.
The provider, in partnership with the City, could leverage the network’s potential to impact economic development. They can look, again, to Cambria County for some critical lessons on how to get this right, and to Seattle, WA which has been aggressively tackling economic development with muni wireless in a couple of test neighborhoods.
While NAC plans to have ads on the network, they probably shouldn’t expect this to be more than a minor percentage of total revenues. It’s the dessert after the full-course meal.
Despite all of the challenges that Philly and their network have faced down, I still expect the city to join the ranks of those with successful muni network projects.
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About the author
Craig Settles is an Oakland, CA-based business strategy consultant and author of After Muni Wireless Comes to Town, a recently released guide to effectively deploying government mobile workforce applications.