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), reports Muniwireless and WiFiNetNews. MetroFi founder, Chuck Haas, says he is also exploring the sale of MetroFi itself to a third party, according to Wifinetnews.
If no buyers emerge, Haas reportedly told WiFiNetNews that MetroFi would shut down service.
The Portland network was MetroFi’s largest, nearly identical in size to Philadelphia’s 135 square miles, the largest consumer-oriented municipal wireless network in the nation. MetroFi said they’d spend some $10 million on Portland’s 134 square mile WiFi network which was supposed to serve some 500,000 people by August, 2008.
It’s clear that won’t happen.
The Portland Wi-Fi network is generally thought to be somewhere between 15-25% built-out — the lower figure representing area, the higher by population. Earthlink’s $20 million Philadelphia network was about 75% completed when they made the announcement this week that the system would be shut down in June (see DW: Earthlink to Philly: We’re Outta Here).
Construction came to a screeching halt about 6 months ago in Portland. Metrofi wanted the city to provide cash in the form of an “anchor tenant” contract, before it proceeded (see DW MetroFi Vs Portland). The city has refused. Under its contract with the City, MetroFi is required to complete its citywide buildout by August 2008. Portland was MetroFi’s only major city where an “anchor tenant” contract was not required. An “anchor tenant” provision has since become a requirement for Metrofi contracts.
No city money has been invested in Portland’s wireless network, although the city spent some $250,000 planning for the network and paying Logan Kleier, the city staffer responsible for overseeing Unwire Portland.
In Portland, as in other cities, Metrofi offered a $19.95/mo tier (without ads). But MetroFi’s free, ad-supported, WiFi tier set the company apart and was undoubtedly the most popular option.
The latest numbers released by Metrofi stated some 20,000 people a month were using the system. CEO Haas claims that 150,000 out of 540,000 people had access to the service.
According to the Portland Mercury, City Commissioner Dan Saltzman, whose responsibilities include oversight of the network, has said that MetroFi’s conduct has been “regrettable,” though he will allow the project “a quiet path to termination”—meaning there will be no action until August 2008, when the two sides will likely part ways.
The “free” service uses Microsoft’s Side Guide, which automatically places ads on the sides of your internet browser. Metrofi also offered businesses broadband connectivity using their own backhaul system which included Dragonwave gear.
Philadelphia’s Earthlink system charged $19.95/month for access but offered a discounted $9.95/month service to qualified low-income residents, run by Wireless Philadelphia, a non-profit group funded by subscription revenue and various charities.
EarthLink complained this week that it was losing up to $200,000 a month in Philadelphia for a system that was expected to draw more than 100,000 customers but had only 5,942 subscribers. EarthLink said 908 were digital-inclusion customers who pay about half the regular monthly $19.95 rate.
Halfway through 2007, EarthLink’s Municipal wireless business, which had been leading the charge with big contract wins to build and run networks in San Francisco, Houston, and Philadelphia, started unraveling. In September, 2007, Earthlink pulled out of proposed networks in San Francisco and Houston. And in early February 2008, EarthLink put its citywide Wi-Fi business up for sale (see DW Earthlink to Philly: We’re Outta Here).
Both MetroFi and EarthLink underestimated costs and overestimated revenue.
Chuck Haas and MetroFi have received a lot of wrath, some deserved, by competitors and users. But only MetroFi was willing to take the courageous leap of faith to offer “free” service.
Besides the free WiFi now available in many coffee shops, hotels and restaurants, Municipal WiFi operators are also facing new competition; especially from the Mobile WiMAX venture from Sprint, Clearwire, Cable and Google, that also delivers mobile voice, notes Unstrung.
“It’s what I call the elephant in the room that nobody talks about,” says Clearwire CTO John Saw. “The backhaul is probably the highest cost of deploying the network… Anyone who wants to roll out a real wireless broadband network nationwide needs a cheaper solution.”
DailyWireless has more than 650 related Municipal Wireless stories including; Earthlink to Philly: We’re Outta Here, MuniFi Roundup, Muni-Fi’s Got Trouble, Who the MuniFi MAN?, Municipal WiFi: What Would You Do?, Wireless Silicon Valley: Would You Believe a Dozen Hotspots in San Carlos?, Free Grass Roots Wi-Fi: It Works in Portland, Starbucks Adds AT&T Wi-Fi, Earthlink Gets Out, MetroFi Vs Portland, Meraki Proposes Free SF Wi-Fi Network, OpenAirBoston Regroups; Becomes Open, Sacramento WiFi on Slow Track, Sacramento Approves WiFi, SoCal Wireless: Toast?, MuniFi: What Now?, MuniFi: Not Dead Yet, Earthlink Restructures, MuniFi Holds Breath, San Francisco WiFi Dead?, Earthlink Tweeks WiFi Business, New York’s 750 sq mile Cloud, San Francisco WiFi Dead?, Wireless Houston: Size Queen?, State-wide Wireless Broadband Access, Ten Cities Under Colorado Cloud, FiberNet for Calif Schools, Washington’s 1500mi Cloud, Sprint WiMAXing NYC, Connecting the Nation, WiFi Vs WiMAX in Windy City, New York’s 750 sq mile Cloud, Will “N” Rescue MuniFi?, Aeris + PacifiCorp: CDMA Meter Reading, M2Z: Free Internet Now!, Sprint’s WiMAX Cities, San Francisco: Now it’s the Antennas!, WiFi War in San Francisco, Houston + Earthlink to Build Huge MuniFi Network, El Paso Unwired + Most of California, Green Light for Philly WiFi Expansion, City Clouds Turn On, Minneapolis Goes Local, Digital City Winners, Anaheim Turns On, New Orleans Gets Earthlink Cloud, Portland Chooses MetroFi for 134 Mile Cloud, Milwaukee’s $20M Cloud, Dvorak: Muni WiFi Will Die, The World Largest WiFi Cloud, Rain on SF Cloud, Google WiFi SitRep, San Mateo: 1st Silicon Valley Cloud, Sacramento Approves WiFi, Cloud for Silicon Valley, Wireless Silicon Valley Proposals, Park City: Solar WiFi, Solar Powered Solstice, GoogleFi: Ads or Not?, Google WiFi Interview, Portland Chooses MetroFi for 134 Mile Cloud, SF WiFi: Bad Deal for Poor?, SF Cloud: It’s Google/Earthlink, Minneapolis Bridge Collapse & Emergency Communications and Philly Chooses Earthlink.
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