Saturday, May 12, 2007

Wireless Minneapolis

Minneapolis is going wireless. This came as a surprise to me, because government moves slowly, and I remember reading about this project in 2004, and thought we'd all have hover boards before municipal wireless would get off the ground. It's a good thing, for a few reasons:

The Good
- Lowers the cost of communication, if it works reliably, for the city. For example, cop cars, which are online all the time, don't have to use expensive cell phones to hook into the network.
- At $19.95 a month, a rate set in a 10 year stone, it's cheaper then broadband.
- $500,000 will be spent to provide low cost hardware, internet, and training for low income residents. This is the digital gap which separates someone from getting a $10 an hour entry office job, and someone working at KFC for $6 an hour. OK, it's not the simple, but I would like to see kids on poor homes have access to the internet, a good working computer, and training for the family.

The Strangely Optomistic
- As part of the marketing the city used to justify wireless city wide, was the image of firefighters heading to a fire, looking up the floor plans for the building on the way to the fire over wifi. Neato. But, I don't know how realistic that scenario is, or how common that would be.
- The massive security camera network the police would have access to instantly. This is another pie in the sky dreams of the city. Tie all the public and private security cameras into the network, so the cops can view security camera footage in the car on their way to a scene. Great, but how common would that be?

The Bad
- $19.95, while cheaper then my bill currently, is still high for a lot of people. And, USI has to charge enough money to make a profit. Because the city doesn't own the network, USI must charge enough to make money. They are projecting $12 million in losses in the first year, out of a $27 million total operating cost.
- While there is a contract in place, if USI ever had to pull out, the city would be screwed. Sure, the city would buy out the contract, but would they be able to manage the services they didn't have to touch before?
- It's not free, and it should be. While there is a cost to provide internet service, it's something that should be funded through taxes, and given free to everyone. Their current model charges everyone, even visitors, except in certain areas, like plazas, or parks, and there is free access, but it's in a "walled garden" of city specific sites, I'm sure with advertising.

10 comments:

Chris Schommer said...

Hey this is great. Although now I realize that I am in St. Paul not Minneapolis. Damn it.

Anonymous said...

The internet should be free!?! Is this a joke? The function of government is not to provide free high speed internet. This should be chagred to the users who use it. How does my neighbor surfing porn sites and getting their local news online benefit be. Gimme a break!

Bjorn said...

Yes, and there should be only bookstores, no libraries.

Anonymous said...

At least with libraries, I don't have people checking out pornography and books on erotica on my taxpayer dime. While I think there is an argument to be made for free access to certain websites (Webster's Dictionary, Government sites, FoxNews :), I don't think that we should give access to people to sit in their home and surf Friendster, Yahoo Games and MSNBC :) on our dime. If they want to do that, make them get out of their home and head to the library to do it or pay a user fee for greater internet access. And where does it stop? If we give away internet for free, pretty soon people will want cable for free and before you know it, Communisim here we come!

Bjorn said...

No one said it couldn't be advertising supported, in the same way as broadcast tv is. You say people will want cable for free, but people already receive free television, even digital quality television, and public television, which is not supported by traditional advertisements.

Why should someone pay taxes to support public transportation which he does not use? or pay for roads he never drives on? Should transportation also be privatized, each person assessed an exact fee for each service rendered? Education is free, I pay for kids to goof off all day, with no responsibility to learn, should that be privatized as well, with daily testing to ensure children are learning, and based on these daily tests, the teacher's pay would be assessed?

Anonymous said...

I do concede that providing the internet was advertising supported, then I don't have a problem with it being free. My issue is having it solely funded by taxes. You may think I'm crazy but I am a supporter of privatization. I think if the school system was privatized and individuals were offered tuition vouchers, we would see increased results because schools would be accountable for their "product". And to your point about education being free, it may be free to the student and families but someone is paying for it, namely the taxpayer. I have very little faith in our school systems to properly educate our children and do so within their means. The WBL school district has complained that they are having to cut $10MM from their budget and saying that they have had to continually cut over the last 7 years. In reality, the total district budget has gone from around $50MM to $85MM per year but the district still had to cut. They do this by proposing a $20MM increase, cutting $10MM and then only having a $5MM increase while enrollmant remains relatively stagnant the entire time.

As for paying taxes for public transportation, I don't think I should have to. My tax dollars go to support the LRT line and it is currently losing in excess of $10MM per annum. If this was a for profit business and not government, this crazy idea would have never gotten off the ground. I would be more than happy to pay user fees to drive on roadways providing I was no longer being raped by gas taxes and and such.

You mention daily testing of students. I find it interesting that teachers say they don't have enough money to educate their students but then when you propose that we move to a pay for performance system, they respond that they cant do this alone. The parents need to help out. Well, which is it?

I think I've given you enough to chew on for now. Let me know what you think.

Chris Schommer said...

Oh boy, privatizer fun. Lets put a turnstile on everything and hope it works out.

I think this is closest to subsidizing wireless is transit rather than schools, so lets leave that one out for now.

You think your gas tax just goes to light rail and bus lines? How about our miles and miles of highways and roads? Those are all 100% free if you can get some wheels to run on them. For those who chose or can not to own a car, they are offered the use of the bus or rail system (wildly successful, you seem to be behind on the news) at a subsidized rate and in turn lighten the load on the road system. Is also allows guests to visit the area easier, and is a huge draw for convention organizers.

So lets put that on the internet. Should the wifi be free? I don't think so, but like the bus it should be cheap. I think $10-20 a month sounds right, and better yet you should be able to buy into a day's usage for $1. How great would that be for business? Gata get this email out, I am from NY, oh look wifi. It's like riding the train, if you live here you get a rail pass or if your are visiting you catch a ride.

In the end I think this is moot because this will be a privately built system as it is in all other cities. The city sees it as worth investing in because frankly its really cheap and it makes Minneapolis more attractive to live and work in. More people bring in more money. Big picture time.

Again I live in St. Paul and pay $30 a month for so-so internet that I then plug into a wirelesses router. I want competition! I would go drop this in a second if the speed were similar. Rather than just have wifi in my little space, now I get it all over! No brainer. Just like the reason we don't have toll roads.

Joe Caldwell CEO USIW said...

I have enjoyed reading everyone comments here on this board. Just so you are aware we did look into the free ad supported model. The current monies on per average sub, is about 2 dollars per month. That amount of money does not even come close to covering the cost to deliver broadband to the end users. We have looked all over the country trying to find that model. Everything up to this point as showed us that it is a failed model, take for example Charleston, SC that WIFI network was free to the users up to a certain bandwidth speed. The provider did not even make enough money to cover their cost for the bandwidth to the internet. That network is being pulled out.
A free model would be great for a provider, pretty simple business model right. Just install the network let everyone use it for free and you as the investor and provider make money. You don't have any customer service cost, really no customer acquisition cost, and you don't have to provide a high level of service because let's face it is free. I am all about creating a win/win situation for the customer and our company, however that model we would not be able to sustain. As add rates go up, it is definitely something to keep our eye on as a business model.
But since we are on the topic of win/win let’s talk about what we are trying to do as a company. We know that you have internet, we know that most you have broadband that you are paying on average including taxes and all of those little fees close to 50 per month. Now some of you are paying a little less and some of you are paying a little more but that is what our in depth research has shown us.
Our current offer is to provide the same kinds of speeds that you are getting now for less than half the price. We have about 25% of the internet users out there still on dial up. We know that we can get about half of them to switch to broadband if we can come out at these prices. For those of you that are broadband is to give you same experience that you have now but bring a couple hundred dollars to your bottom line. To top that off, our service is mobile not only does it work at your home or office it works throughout Minneapolis.
So for example while your kids are home using the internet to do homework, you can take your laptop or PDA and leave the house and still be on. It is basically two accounts, one that is connected to the CPE and one that is for mobile use.
We are currently are on track to have the whole network built out by November 2nd 2007. We have run into a few small hiccups when it came to engineering around the tree canopy. We have figured out those issues and now have a solution that is now in place
If you live in Minneapolis you can preregister for the service. All this means is, that when we turn up your part of town that we will get a hold of you and let you know that we are good to go in your area.
You can do that at the following address http://www.usinternet.com/wireless/minneapolis-wireless.cfm
Our current offer is 19.95 per month for 1MB we will have other packages shortly with speeds up 6MB and discounts for term contracts.
You can get more information at is comes available at www.usinternet.com or call us at 952-253-3200
Since we have been awarded this contract this is the first blog that I have responded to. I will not make this a daily thing. I will check back in about a month and see what is going on and hopefully respond to any questions. We are a local company we as the owners live here. We are your neighbors. We started in Minneapolis in 1995 our offices are now in Minnetonka. We are 100% commented to making this project work, we hope that we can earn your trust and your business as we embark on this new adventure together.
I appreciate you taking the time to read this long post
Joe Caldwell CEO USIW

Bjorn said...

Thanks for your comments Joe. You've answered some questions I had about the project right off of the bat without prompting. I understand free internet for such a large project currently is unrealistic, but with added technology, supporting such a large network becomes less and less expensive to maintain, which would lower the cost to the city to maintain.

If this project works as well as hoped, it could become a model for other mid sized metropolitan areas. Even with cities charging a fee for internet, they still suffer high losses. If this model breaks even, or posts a modest profit, more cities will jump on board.

I do hope free, or reduced cost internet access can be provided to residents who meet certain income requirements, or have children. Fast internet at $50 a month is a high barrier to the great library of the internet.

I'll be keeping an eye on the progress of the project. I'd like to drop Comcast, but I'll have to see if the speed is fast enough for downloading larger files, like Linux distributions, or large updates from Microsoft.

Bjorn said...

Here's a marketing idea:

Open up kiosks in the neighborhoods which will be served. Maybe you could get the city to foot the bill, cover the rent for the space. It could be an internet cafe, with free internet at the speed people would connect at. Also the kiosks would be a one on one sales center. Open retail space is around everywhere, set up would be minimal. The more simple the shop, the more "local" it will feel. Run a three month lease, or slightly longer, depending on what adoption rates are, then pack up.

Workstations could be scooped up for $250 to $300 each from Dell, or another provider. I could see a strategic partnership between USI and Dell on the cafe's, so the costs could be minimal.