Muni meltdown: the lessons for Asia

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Here in Asia the term “muni network” is not common, although I’m guessing most people that follow the telecom sector will know that it refers to the municipal networks, usually wireless, that are being championed by local governments. In the U.S., however, muni networks are mainstream news. They’ve either been built or are under consideration in 455 U.S. cities, while they’re popularity has created a cottage industry of conferences, consultants, lobbyists and publishing ventures.

However, the whole concept of muni networks and the industry that has sprung up around it could be in danger of unravelling – something governments in this region should watch closely. As our US correspondent Patrick Neighly reports this week, Chicago is one of the high-profile cities that has recently had a re-think of its city-wide Wi-Fi plans, while at the same time Earthlink, a major investor in muni wireless infrastructure, has also done its sums and concluded that it’s perhaps not such a good way to spend its money after all.

It’s not alone, however, with skepticism about the whole concept of municipal Wi-Fi being the main theme of media coverage in the past few weeks. According to an article in this week’s The Economist, most of the networks that have been put in place today suffer from a wide but consistent range of problems: poor indoor coverage, underestimating the number of transmitters needed for city-wide service, a lack of demand for the service from the general public and no real demand from the city governments themselves.

Somehow, you would have thought that someone would have pointed to such potential problems before the estimated 175 municipal networks now in service were rolled out. It’s not like the coverage problems weren’t known, and stuff like estimating demand and the number of transmitters needed would seem to be fairly basic steps before rolling out any wireless service.

As for the governments themselves, The Economist quoted networking consultant Craig Settles as saying they simply weren’t ready with basic things such as their back office systems to provide government services over the networks. Settles has also done a recent report on the benefits of muni wireless and he concludes that one of the biggest tasks is to manage expectations. “Poorly managing expectations is a killer. Muni wireless is taking some undeserved lumps because so many public statements in 2006 promised what the technology can’t deliver and supported business models difficult to sustain,” he wrote in the report.

In other words, many networks are being judged on criteria that they themselves had not set. He claimed that some of the success stories are not getting the publicity that the tales of muni doom and gloom are. For example, one of the first muni networks, in Philadelphia, was set up with the goal of fostering economic development in huge areas of urban decay within the city – something it was successful in doing. However, Settles claims that it is now being judged on other goals.

“Articles now say that unless we see hordes of young professionals and tourists roaming the streets of Philadelphia with Wi-Fi gadgets blazing, the network will be a failure. What total and complete crap,” he suggested.

On the plus side, all of this activity, both positive and negative, can provide useful lessons for similar networks going up in Asia. In places like Hong Kong, Taiwan, Singapore and Sydney there are plans underway for massive Wi-Fi networks, often with the most publicised feature being that they’ll offer free access. Yet already there are signs that they could face similar problems to those currently being experienced in the U.S.

For example in Taiwan the demand has been nowhere near what was expected – according to The Economist it was claimed to need 250,000 regular subscribers by the end of 2006 in order to break even, but had attracted only 30,000 by April this year. And we’ve already reported here in Broadband Communities of complaints regarding coverage and quality in Singapore.

In the case of Chicago’s decision to drop its Wi-Fi plans, one of the cited reason was that Sprint was going to make the city one of its pilot WiMax sites, which would offer better coverage. Yet look at cities like Sydney and Hong Kong, both of which have a wealth of wireless offerings in place already. Who is going to switch to a government backed Wi-Fi service? I know in my case, I’d pick reliable over free any day.

Which is not to deny that there is a place for municipal wireless, either in the U.S. or here in this region. But governments rolling it out should first ensure some basic steps. Firstly, clearly articulate what the goals of the network are. Secondly, ensure that proper planning and forecasting is done – don’t underestimate the number of transmitters needed or overestimate the number of potential users. If one of the goals is to use the network for government services, make sure the relevant public agencies are actually ready in terms of their back-end services.

And finally, do everything possible to manage expectations. If public access is not an important goal, or if the aim is to spur development in terms of business or public services, make sure that the public and media know that’s the case. Otherwise you could have the situation that is arising in America, where muni wireless is starting to be written off as a failure before it’s had a chance to succeed.