June 12, 2006, 10:54 AM — A company that built a pilot Wi-Fi network in Sacramento, California, as a precursor to citywide coverage is pulling the plug on the project, the company said Friday.
MobilePro Corp. last year won a contract to build and operate the municipal network for Sacramento. Now it appears that the city and the company weren't able to agree on how the network should be offered to users. The change of plans demonstrates the struggles that companies and cities are having in figuring out how to build and pay for municipal wireless networks.
MobilePro proposed two models for the network. One would include a limited area and limited bandwidth service that would be free for users plus a higher bandwidth service that customers would pay a monthly fee to access. The second proposal involved the city serving as an anchor tenant for the network, which would then supply services for free to low-income residents.
The city rejected both ideas, according to MobilePro, and instead asked the company to offer services for free and support the network with advertising revenue. Based on its experiences operating Wi-Fi networks in other cities, including Tempe, Arizona, MobilePro said the idea isn't financially sustainable. MobilePro said it decided to withdraw from the project.
In March, MobilePro launched a free pilot of the network covering a Sacramento park. At the time, the company said that the proposed network would ultimately cover ten square miles of the city center and grow to cover other areas. Customers could access the network for free or for a fee based on the type of service they wanted.
A growing number of cities, including San Francisco, are working on building Wi-Fi networks that offer broadband services to residents. While some initially considered paying for the networks themselves, most have evolved toward plans that involve partnering with commercial companies. Among the most high-profile cases is the Philadelphia network in which broadband operators criticized any plans that would have involved city sponsorship, saying that the city would be using tax dollars to compete against commercial service providers. Philadelphia recently signed a contract for EarthLink Inc. to build and operate the network at no cost to the city.