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Summary:

Just a quick follow-up on the municipal WiFi project that’s just shutting down in Philadelphia. Although I haven’t lived in the city for 14 years, I’m still close enough that my local news is out of Philly. Last night on the 6pm broadcast, there was some […]

WirelessphiladelphialogoJust a quick follow-up on the municipal WiFi project that’s just shutting down in Philadelphia. Although I haven’t lived in the city for 14 years, I’m still close enough that my local news is out of Philly. Last night on the 6pm broadcast, there was some more info that explained to me what the biggest reason for the shut-down is. NBC10 indicated that there were only 6,000 paying subscribers; at this point in the rollout, the city and EarthLink had expected 100,000. To put this in perspective, the network is 80% complete and the city has over one million residents.Now I understand the reason: not enough of a paying subscriber base to support the infrastructure rollout and on-going costs. This emphasizes the risk scenario that any service provider faces and you can see it in the nearly-national 3G and forthcoming WiMAX rollouts. The providers have to spend billions to get the service coverage areas up and running… “build it and they will come” can’t be your business plan.I’m personally disappointed for the city of Philadelphia as conceptually, I love the idea of a 100+ square mile hotspot. Unfortunately, that doesn’t pay the bills… nor does a customer pool that represents a tiny percentage of the potential user base. While nobody could have accurately predicted an economic slowdown that might also be impacting consumers decisions, did anyone ever ask the city residents if they wanted the service to begin with? I think marketing may have had a hand in this too. Although this is a municipal project, few cities have the media know-how to compete with brand names in media. If it were me, I’d consider trying to bundle the WiFi service with Comcast and Verizon offerings in the city. Leveraging their media presence might be the only way to save the hotspot.

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  1. Why not capitalize on the infrastructure they already set up by turning it into a free ad-subsidized network. They shouldn’t have looked to turn a direct profit from the service, but instead looked for it to bring more customers into the city, and increase productivity within the city.

  2. Corrupted Mind Wednesday, May 14, 2008

    I have never seen such wrong headedness in my life!!! I wonder how much the state pays for internet for its schools, hospitals, libraries… in fact all its municipal workers. If the network was 80% complete it was time to force all the public servants off the copper wire and into the cloud. The second step should have been to give it away to all residents, and I mean give it away – (you need to create a bit of a market here), then offer faster speeds for paying members of the public. Thirdly, they needed to offer companies a reason to get on the wifi as customers – a state wide tax rebate could do it, or make the charge for use of the network rebateable at year end. I hear what Benz is saying about Ad-supported, but I don’t think that is enough – they needed to hit 250,000 – 300,000 users first and then think of a way of monetising the 100,000 they needed.

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