In what seems to fly in the face of the new conventional wisdom post Earthlink's travails that large scale muni wireless deployments are dead, a franchise to build a muni-WiFi network over Nassau and Suffolk Counties was awarded to "newcomer" ePath to provide WiFi service.
You can read the Times article here.
ePath has an infrastructure partner in Cisco, and a fiber backhaul provider in Keyspan Energy, so they come to the table with something. All they need to do now is to raise $150 million dollars to build the network. Nassau / Suffolk will not be providing any funds or committing to purchase any services from ePath. It is all upon them to find the backers willing to take the risk.
Here are a list of challenges we see before them:
Quality of Service.
WiFi, given where it is on the spectrum - 2.4 GHz - can't penetrate walls or foliage very well.
Given the power levels for WiFi set by the FCC, it's range is limited.
Given that it is open spectrum, there will be a lot of interference -- from microwave ovens, cordless phones, baby monitors, and other WiFi networks.
Generally speaking, if you are more than 300 feet from a WiFi Hot Spot, you will start to experience performance issues. Even if the radio is state of the art, the devices themselves will have trouble communicating back to the access point at that kind of range. This will drive up infrastructure and customer service costs.
Customers.
How many people have Wi-Fi enabled devices now? 5%? 10%? How much is that likely to increase in the next several years?
ePath seeks to derive revenues from premium high speed subscription services for home and business, and from advertising. I am sure they have run their numbers, it would take a lot of subscribers to pay for $150 million in infrastructure, even with 1.35 million people in Nassau County and 1.5 million in Suffolk.
How much advertising revenue could the network realize in the early going when subscription rates will be low?
Competition.
Why would someone switch from Verizon or from Cablevision when they can both lower prices and if necessary create their own Hot Spot networks, leveraging their own infrastructure?
Is the venture would be partially dependent on incumbent infrastructure? Keyspan is only providing fiber where available. You don't want to be using the competition's network.
Cost.
-- If the proposal is to create a third player to bring competition to a phone/cable duopoly, then that third player better have a customer service and sales and marketing team, and be ready to install and maintain cables in-building. In other words, there is real overhead in establishing a telecom, even if doing things wirelessly lowers costs.
In the end, Nassau and Suffolk County was able to announce a concession winner and risked nothing. ePath, since it will rely on outside investment, is risking nothing. Is this invest-able? You need devices and a reason for people to use them.
If you could put some WiFi VOIP phone in people's hands with a model that could do video conferencing as well -- Cisco makes some high end VOIP handsets, of course, maybe. A lot of people need a compelling reason to spend $10-$20 a month. If 10% of the 2.75 million on Long Island pay $10 a month, that's 33 million a year in revenues. The proposition may yet find its backers (via a business model) after all.
As a lover of muni WiFi and a Long Islander, I hope they succeed.
In the meantime, Levey and Suozzi could get behind The Nature Conservancy's effort to restore the Great South Bay by re-introducing clams to filter the bay water. Mayor Bloomberg, as part of his Greener New York program, is planning to clean New York City's waterways by seeding shell fish. I guess you can say that like public WiFi, the cost is low to restore the bay relative to the social and economic benefits. The difference, though, is that you can start seeding those beds tomorrow, whereas $150 million is a lot more than seed capital, and no one has harvested a profit from muniWiFi yet.
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