The Financial Case for SF WiFi

While Mountain View residents have been living under Google’s city-wide wireless for more than a month now, San Francisco is the next (if it happens) city that will go wireless via Google. In partnership with Earthlink, the duo plan to unwire SF with a free slow service and a faster fee-based plan. But the team has been facing a series of obstacles and opposition since it was chosen by the city earlier this year.

This weekend the Institute for Local Self-Reliance and the Media Alliance circulated an economic argument for a city-owned muni wireless network for San Francisco, as opposed to the corporate-owned Earthlink/Google plan. The organizations’ data states that a publicly-owned network would:

1). Payback its original investment in 4.2 years.

2). Generate at least $6.1 million in surplus revenues over the first 5 years.

3). Generate at least $16.8 million more in surplus revenue over the following 5 years (after the million debt is retired).

They say that the total benefits of the network over 10 years is $22.9 million (via Kimo’s Crossman’s SF WiFi list).

That sounds pretty good when you think about muni WiFi as a self-sustaining public service. Other cities have taken the public route, including a plan for Boston to create a non-profit. At the same time the numbers aren’t compelling enough to be considered a lucrative business model, and VCs might scoff at the return. And other often-cited cities like Chaska, Minnesota have been reportedly less successful. But perhaps making sure broadband is available to all residents should indeed fall mostly under the public domain.


And when you consider this data in relation to some of the talk about San Francisco’s current WiFi plans, it starts to look better. Even Google execs are getting annoyed by how slow and convoluted the city WiFi talks are going, with Google’s Chris Sacca expressing his frustration over the project in the Chronicle earlier this month.

This is all part of the age-old debate of whether public-good projects should be kept publicly-owned or turned over to the private sector. (That is, if you think muni WiFi is a public-good.) Later today the city plans to hold a meeting on the question of city-owned WiFi, and next week Google will hold its first San Francisco WiFi education meeting. What do you think? Who can screw up the project more, Google/Earthlink or the city itself?


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