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Nice to have an interesting contrarian position. Craig Mattias looks at the current bad news on muniwireless — read Earthlink — and takes the long view. WiFi will come because there is no other alternative. WiFi will come to complement the cellular network because WiFi is just better at delivering local wireless broadband, and is a global standard.

What could well happen, especially in an urban environment, is that public WiFi will become the victim of WiFi’s over all success. At Union Square, NYC for instance, where we have one of our parkwifi locations, WiFi Salon has detected 215 other nearby networks. They interfere with our coverage, and affect our QoS, and of course interfere with each other. This is open spectrum, so that’s the way it goes.

Advances in technology will increase performance/QoS, but there are real limitations when it comes to RF interference.

Covad has been great. New York City is a challenge, the parks are an even greater challenge, but we got it done. We got working DSL into 17 park locations and ADSL2+ into Columbus Circle, The Sheep Meadow, Washington Square Park, Summerstage, with Union Square pending and other locations also upgradable.

What does that mean for the user? Free high speed WiFi, with the capacity to support multimedia and a good number of simultaneous users. ADSL2+ tripled our capacity. Visit any of our free WiFi Hot Spots here.

Here is the rest of the press release, also available as a google search here.

, Wayport Among Providers That Rely on Covad's T1 and DSL to Connect Hotspots in Airports, Parks, and Other Public Areas

New York City is the Media Capital of the World. Its destiny is to become the wireless digital media capital of the world.

What this town needs right now is a public space that is awash in broadband WiFi. Lincoln Center Plaza now has WiFi. Imagine what the world’s largest performing arts center will now do with WiFi in their plaza.

Our parkwifi Hot Spots are being all outfitted with ADSL2+ to handle the demands of public wireless multimedia.

With such capacity, our locations will be venues where leading edge wireless digital arts and cultural content can be broadcast, and new immersive wireless experiences can be staged.

WiFi Salon believes there should be venues i.e. Salons where NYC’s arts and cultural community can present to the public and where technology and media companies can offer what a wireless world will look like.

Well, we all know the winning model for muniWiFi is not here yet. Here is the current litany of pain from Fast Company: Fast Cities Struggle to Go Wireless

People are discovering that WiFi cannot compete side by side with the telcos to provide universal broadband access over a large geographic area with anything like the QoS that people expect. Cell gives people universal coverage. They want their muniWiFi to provide it, especially if they are being asked to pay for it.

Mesh would be the way to go, except the attenuation (degradation of signal) between hops makes the technology — so far — not nearly as robust and cost effective as it needs to be. Earthlink/Philly/Tropos is what is cited as the main example.

What everyone seemed to forget as they were laying out their plans for a wireless municipal network is that WiFi by FCC regulation, and given where it is on the spectrum, doesn’t penetrate well — into buildings, through trees, down the hall, etc. People also forgot that this is open, unlicensed spectrum, subject to interference from cordless phones, microwave ovens, baby monitors, fish tanks (Wi Fi can’t penetrate water), other WiFi networks, etc.

WiFi itself was created by people who took the thin slice of free or junk spectrum alloted by the FCC and went with it well beyond what anyone could have anticipated. That said, there are continued limitations with WiFi that correspond to laws of physics. More robust spectrum at a higher power level is what is really needed.

In the meantime, let’s take what WiFi does well — provide local broadband connectivity. Let’s create a local wireless broadband experience within a neighborhood public space or commercial corridor.

Forget city networks. Too big, too bold, wrong paradigm for the spectrum you have been alloted. Dig “community wells” rather than trying to lay all the pipes necessary for “indoor plumbing.” Don’t go toe to toe with cable and the local telco and try to be the third player. You will lose because you will have a lot of the headaches and overhead of a telco — the in-house wired infrastructure, a large sales, marketing and customer service force — and not nearly the means given WiFi’s limitations to deliver a service that can compete in terms of price and quality, not with DSL prices continuing to drop, and I daresay $99 voice, cable and internet triple plays to be had at internet speeds far far higher than what WiFi would provide indoors.

We should try to instead create Community WiFi, as opposed to Consumer WiFi. Establish Hot Zones that are highly local, not mobile or municipal. WiFi Salon believes WiFi should be established the community’s centers — the schools, libraries, parks, public squares, the business districts. If you try to bring something to everyone everywhere, most certainly you will spend too much and still come up short because in the end you won’t be able to deliver enough to individual homes and offices. As a location-based service in key areas — well that is another matter.

The Wall Street Journal today had an interesting article on one potential business model that would support MuniWiFi: Advertising.

Here’s the link:).

The article discusses how the ad supported muniwifi model has not taken hold because large advertisers cannot buy ads in bulk or across large areas because WiFi is a very local and small scale thing. Each municipality is a separate negotiation. If you are selling or promoting a national brand, that is a problem.

One potential answer, according to the article, is to aggregate the locations, get a hundred providers to sign up with your ad service, and then turn around to the major brands and sell that space. This is the JiWire strategy. They are a WiFi directory service, a provider of WiFi security solutions, and now in conjunction with Microsoft a provider of advertising network services.

The value proposition is this: You are a Wireless Service Provider (WISP). You run their ad platform on your network. They have many dozens of networks signed up. They are able thus to grab ad dollars from national advertisers because they now have the reach and scale necessary, and they split the revenue with the WISP. Free WiFi, ad supported.

Will this work? I would say that unless this otherwise top-down platform allows also for a means by which to create highly local ads, and support user generated content for reviews, recommendations, new locales, this alone will just will not work for (free) muni WiFi.

A director from Digitas noted that people would be very likely to tune when watching the obligatory ten second video that would pay for the free WiFi. Maybe so, but the medium — broadband wireless internet — is going have advertising possibilities — interactive, location-based, IP based — that this re-purposing of desktop ad technology just lacks, and which is now, as noted, real tired.

We respectfully submit that WiFi’s strength is that it is the internet, localized. Local content, services, and yes, advertisements. Advertising is relevant to the extent that it is actionable. With WiFi, the customer is the point of sale, and a WiFi Zone and a Commercial Zone can be one and the same.

Integrate local advertising with a local interactive map, geolocate the content, enable user created content. Keep it hyper local, aggregate. The Long Tail, if you will.

We believe we are a ways from where you can show the right ROI to local businesses using traditional ad placement sales: How many devices / users would you have to have on a network to create enough sales to even pay for a $135 ad for a pizzeria. The question is, where do we see the right density of devices in use at WiFi Hot Spots —2008? 2010? — to command the ad rates needed to sustain the local WiFi network? Microsoft and JiWire have their projections. More revenue sources beyond advertising is required for now.

We believe strongly that lighting up a commercial corridor and seeding the area with wireless screens, kiosks, handhelds, and providing a local interactive map will create advertising solutions that will be all the more effective for being part of an “immersive” wireless experience. Do large brands even have a place here?

KQED emailed me a link to an interesting story on how a consortium of four companies, headed by Cisco and IBM, are planning to build a 37 town muni WiFi network in Silicon Valley.

I still want to know about device density i.e. how many WiFi enabled devices are there now, how many will there be in three years. Device density is crucial. That is the pool of potential users.

It’s a $100 million dollar experiment for them. I like their chances more than I did the ill-fated Cometa. That consortium of Intel, AT+T and IBM went through $40 million back in 2003 in the attempt to create a wholesale backbone/backend for WiFi. No devices then, some now.

wrote a little piece on WiFi Salon’s upgrade of the parkwifi network through ADSL2+ lines from Covad.

Small point — we are in ten parks (not 17 — that’s the number of locations).

We are glad that we were able to provide a leading edge service like Covad’s ADSL2+ to New Yorks park goers as part of our free parkwifi networkWiFi. We have about tripled capacity at Sheep Meadow and Columbus Circle. That means we can support three times the users and much more in the way of video streaming. Washington Square, Union Square, Summerstage and The Delacorte / South Great Lawn are also now in process.

We are now seeking to populate the portals with local multimedia content from media companies, arts and cultural institutions, from The NYC Parks Department and various parks conservancies, and public entities.

For Immediate Release

New York, N.Y. – July 23rd, 2007 – WiFi Salon announced today that it upgraded its free 18 location parkwifi network in New York City with ADSL2+ from Covad Communications Group, Inc. (AMEX: DVW), a leading national provider of integrated voice and data communications. This upgrade will allow for significantly faster delivery of localized multimedia content from public and private sources, including the Department of Parks and Recreation. Covad’s ADSL2+ is a next generation broadband service offering speeds of up to 15.0 mbps.

“By upgrading to Covad’s next-generation ADSL2+ service, WiFi Salon has significantly enhanced its ability to provide New Yorkers with free high speed WiFi on our parkwifi network. People want video, they want fast downloads. We can now scale to meet the growing demand not just for WiFi, but for high bandwidth and multimedia in public spaces,” said WiFi Salon CEO Marshall Brown.

“We are very pleased that WiFi Salon has chosen Covad ADSL2+ to power its network of WiFi hotspots,” said Lisa Graham, Covad senior vice president of sales. “This next-generation broadband service is uniquely capable of providing the bandwidth to support the multimedia experience that technology-savvy New Yorkers demand.”

WiFi Salon currently operates 18 locations running in 10 city parks in four boroughs. WiFi Salon and Covad now provide ADSL2+ in Central Park at The Sheep Meadow and in Columbus Circle. They are in the process of upgrading the parkwifi network to ADSL2+ in Washington Square, Union Square, The Delacorte Theatre / Great Lawn and Summerstage.

Full list of locations and coverage areas can be viewed here:

http://www.nycgovparks.org/sub_your_park/wifi/index.html

About WiFi Salon:

WiFi Salon is a leading free wireless service provider creating neighborhood hot spots where people can connect, share, and build communities simply using the newest approach to next-generation wireless applications, services and experiences. The company’s premiere installation is in New York, where it is headquartered, having secured the exclusive concession from the New York City Department of Parks and Recreation to establish and operate 18 Hot Spots in ten parks in four boroughs. These local portals for these locations can be found at http://parkwifi.portalize.net

1. Identify a key location where people congregate, ideally a commercial district near a college or university, with some nearby arts and cultural institutions.

2. Do a site survey. Determine the equipment and costs, where people will let you mount antennas, where you could bring in ‘backhaul’ — DSLs, T1s, Fixed Wireless, etc.

3. Work with the local non-profits — Business Improvement Districts, Community Boards — to determine what wireless applications, services and experiences would prove useful for the area in question. Local advertisement, both in the sense of creating awareness of the network, and creating advertising opportunities for local entities, is crucial.

4. Cost out the development of the local portal; use a phased approach. The portal and its associated features should go incrementally. What goes up first? What is stage two or three? At each stage, you will learn what is working for your users and what isn’t.

5. What other hardware based add-ons would people / local businesses find useful or compelling? Interactive flat screens? Kiosks? What devices — handsets, tablets, game consoles, VOIP phones, non-browser based devices — should the network actively support and promote?

6. Produce an ROI analysis: What is the demographic you wish to draw? What are the assumptions for usership? What will each user bring per day economically? If a WiFi Hot Zone covering ten blocks costs $100K to first build and maintain Year One, but $20K for each Year Two, and Year Three, but we can project an average of 300 sessions a day over those three years, is it worth 43 cents per session to bring people to this Hot Zone to work, dine, shop? How much revenue could be derived from local advertising to around 100,000 people a year?

7. Identify sources of funding — sponsorships, partnerships, grants, advertising, e-commerce. Depending on the place you want to build the network, it’s target audience and aims, the funding sources will be different.

8. Get the timing right. This model will work only when there are enough locals who have WiFi enabled devices. You need critical mass. We are getting closer…

There have been two very large impediments to the development of Muni WiFi: Few devices, and few good open networks.

We have been then in very much a ‘chicken or egg’ situation — there has been no strong impetus to building muni WiFi networks because not many had such devices, but few had devices in part because who would buy them absent networks?

Well now that we have the iPhone, and they have shipped 500K of them, the pressure will mount. With Nokia (disclosure: the parkwifi network’s sponsor) shipping their NSeries devices and Sony, Samsung, etc all shipping WiFi enabled gadgets, with T-Mobile now selling a service that is dual WiFi/cellular, the pressure will grow all the more. Good public WiFi will simply become a priority now not for the 5% who love technology and are passionate abou WiFi, but for many millions.

It will also become a priority at some point for the carriers, unless the cell network will in fact be able to support the demand for multimedia content. For now, it looks as though WiFi will be a complementary means of getting high speed downloads and video streaming on a dual WiFi/cell device, with the Hot Spot a nomadic stopping point in an otherwise mobile environment.