01-03-2006 - Citywide Wireless Internet System•
•
TO: Andrew G. Pasmant, City Manager
and City Council
FROM: Chris Freeland, Assistant to the City Manager
SUBJECT: CITYWIDE WIRELESS INTERNET SYSTEM
RECOMMENDATION:
City of West Covina
Memorandum
AGENDA
ITEM NO. J - 2
DATE January 3, 2006
It is recommended that the City Council discuss this matter and direct staff accordingly.
DISCUSSION:
Councilmember Michael Touhey asked to discuss the possibility of the City of West Covina
providing a wireless internet system, for a fee, to residents and businesses within West Covina.
Councilmember Touhey will present his comments at the meeting.
Attached is an article from Business Week discussing the system being offered by other cities.
FISCAL IMPACT:
Any fiscal impact. will be dependent on direction taken by the City Council.
Prepared by:
(12�� -
Chris Freeland
Assistant to the City Manager
0,101 V' , V
W141WITHI1'S
OWN ZIP CODE
As more municipalities set up wireless
networks, afast-moving business emerges
DDISON, TEX., JOINED
the nation's tech elite on
Aug. 23. With the flick of
a switch, Mayor Joe
Chow turned on a city
Wi-Fi network that cov-
ers all 4.5 square miles of
the Dallas suburb. Now, Addison's
100,000 residents can buy fast wireless
Web access from startup RedMoon Inc for
just $16.95 a month —a far better deal than
most phone or cable broadband offerings.
As towns across the country launch
wireless broadband networks to bring af-
fordable Web access to their residents,
companies from tiny RedMoon to heavy-
weights such as Hewlett-Packard Co. are
jockeying to become their partners. Their
motivation: Getting in on the ground
floor of a potentially fast-growing busi-
ness while creating an alternative to the
Bells and cable outfits that control most of
the country's broadband pipes.
On Aug.18, Wireless Philadelphia, the
nonprofit running that city's Wi-Fi net-
work, chose HP and EarthLink Inc. as fi-
nalists;to build.and manage its $18 mil-
lion system. Minneapolis is now
reviewing proposals from EchoStar
Communications Corp. and Sprint Nex-
tel Corp., among others, to build and run
a $15 million to $35 million citywide
network Google Inc. sponsors a wireless
hot zone in San Francisco's Union
Square, and analysts wonder if the In-
temet giant will bid for the city's new
Wi-Fi project.
BIG BUCKS
THE MUNI WIRELESS business is still in
its infancy. But with 300 cities launching
F or soon to launch Wi-Fi networks, the
r market could yield roughly $200 million
a in revenues a year, according to market
z tracker Yankee Research Inc. Although
a Wireless Philadelphia has yet to negotiate
ntia:� yn�;n
a pilot network in the city's dointnfown,
wh'ich'.could grow.to serve 275,000
inhabitants
a final price with its winning bidder, its
business plan calls for spending $50
million over five years. Many cities and
their corporate partners haven't yet set
prices. But Philadelphia for now envi-
sions selling Wi-Fi at less than $20 a
month and just $10 a month to low-in-
come residents.
Cities may want Wi-Fi to bridge the
digital divide. But many of their potential
partners —such as Sprint, MCI, and satel-
lite Tv provider EchoStar—are old rivals
to the Bell and cable companies and see
wireless as a way to compete with their
enemies. While Internet service providers
such as Earthlink can still make deals
with the Bells and cable outfits for deliv-
ery of services, "it's
ADDISON, TEL essential now for
Residents can [such] companies to
log on anywhere figure out an altema-
in town tive way to get into
people's homes," says
Ronald A. Sege, chief executive of Tropos
Networks, a wireless -broadband equip-
ment vendor in Sunnyvale, Calif.
Equipment makers also want to get a
toe in the door. Hewlett-Packard, which
long has provided technology infrastruc-
ture for telecom companies, views wire-
less broadband as the communications
system of the future. "It's a natural evolu-
tion for HP to move into this space," says
William J. Mutell, senior vice-president of
worldwide public -sector solutions. The
Palo Alto (Calif.) company is bidding to
build Wi-Fi networks in six cities and cur-
rently operates systems in St Cloud,
Minn., and Franklin, Tenn.
The rush to build muni wireless zones
has got the Bell and cable companies
plenty worried. They have mounted lob-
bying campaigns in 14 states to bar local
jurisdictions from creating their own
networks, but have failed in all but one. In
Congress, the issue will likely get ironed
out as part of an impending overhaul of
the 1996 telecom law. To fend off the Bell
and cable lobbies, many cities are opting
for outsiders to own their Wi-Fi network
The new competition already may be
having an effect: Verizon Communication
Inc. just dropped its DSL pricing to
$14.95 a month. Cities, meantime, see
these networks as a necessity of the In-
formation Age. "Just as with the roads of
old, if broadband bypasses you, you be-
come a ghost town," says Dianah L. Neff
Philadelphia's chief information officer.
As more and more burgs rush to get con-
nected, Techdom senses a potentially lu-
crative business in the malting. 2
-By Catherine Yang in Washington,
with Ben Elgin in San Mateo, Calif.
Seotember 5.2005 1 BusinessWeek 139