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HomeMy WebLinkAboutItem 02 Review Options for Council Goal to Analyze Municipal Wi-Fi as an Incentive for Economic Development in Nodal Zones AGENDA ITEM SUMMARY Meeting Date: October 15,2007 Meeting Type: Work Session Department: Information Technology Staff Contact: Rod Lathrop ~ L- S P R I N G FIE L D Staff Phone No: 736-1025 C I T Y C 0 UN C I L Estimated Time: ] 5 minutes ITEM TITLE: REVIEW OPTIONS FOR COUNCIL GOAL TO ANALYZE MUNICIPAL WI-FI AS AN INCENTIVE FOR ECONOMIC DEVELOPMENT IN NODAL ZONES. ACTION REQUESTED: ISSUE STATEMENT: A TT ACHMENTS: Review the attached Issue Paper and provide guidance. In January 2007 the City Council adopted a goal to identifY possible WiFi locations in nodal development locations. It is estimated that as many as 400 municipalities through out the United States may be considering municipal WiFi networks. 1. Municipal WiFi Issue Paper DISCUSSION/ FINANCIAL IMPACT: There are many reasons for considering a municipal WiFi network. One of the chief benefits is to mobilize traditional municipal services, such as Police/Fire, Public Works, and Development Services. Additional benefits for municipal WiFi networks include social inclusion by providing Internet services at low or no cost to under- served populations, possible economic development gains, and demonstrating to the world that Springfield is a contemporary, wireless-enabled digital city. Municipally owned WiFi networks can cost as much as $75,000 - $150,000 per square mile. Due to the significant geographic distribution of our City and the associated high capital costs this option is not presented here. Many Cities such as Portland, Oregon and San Francisco, California are trying to develop Municipal WiFi networks as PubliclPrivate partnerships. Four options are presented for Council discussion, ranging in cost from little more than staff time up to $10,000 plus additional staff costs for items such as Coverage and Interference engineering reports. EarthLink, the dominant provider in the PubliclPrivate partnership market space, has recently suspended new projects after losing $30M in the most recent quarter. Due to other failures and underperforming projects in the municipal WiFi market, coupled with pending technical innovations such as WiMax, Option 4 "No action at this time" is the IT recommendation. . CITY OF SPRINGFIELD ISSUE On January 27,2007 the City Council adopted a goal to identify possible WiFi locations in nodal development locations. Small cities such as The Dalles, Oregon, medium sized cities such as Milpitas, California and major cities such as Portland and San Francisco are planning or implementing municipal WiFi networks. There are many purported benefits to providing municipal WiFi access: · Providing an Economic Development boost; · Bridging the "digital divide" for lower income neighborhoods; · Connecting traditional municipal services and providers such as Public Works, Police and Fire to their data systems remotely, and connecting new wireless devices such as parking meters and water meters; · Adding a certain amount of cachet to the City branding effort. Due to the low cost of creating local hot spots with commercial services such as Clearwire, the Economic Development benefit may have only modest appeal. Municipal WiFicomes in two primary implementation models: · Owned and operated by the municipality in support of municipal services; · Developed as a public/private partnership, with the City providing access to vertical assets (light poles, buildings, etc.) and the private partner supplying the resources to build and operate the network. The private partner relies upon selling sufficient Internet subscriptions to the public, or else upon advertising revenue, in order to turn a profit. Due to the high capital and staff cost ofWiFi networks owned and operated by the municipality, this option is not being presented here. OPTIONS 1. Publish a Request For Information (RFI) to gauge interest among private sector WiFi providers in forming a public/private partnership; 2. Publish a Request For Proposals (RFP) for.a private partner to move decisively into the Municipal WiFi arena; 3. Hire an engineer to do frequency and coverage testing, in order to better quantify potential costs and benefits for a Springfield Municipal WiFi network; 4. Take no action at the current time. Evaluate the usage experience of other municipalities that are implementing public WiFi, such as the City of Portland, which recently turned on their ad- supported public/private partnership in selected neighborhoods. DISCUSSION/FINANCIAL IMPACTS Option .1: Publishing a RFI could help the City gauge the interest level of potential private sector partners in the Springfield area. Costs would be fairly minimal; estimate 100 hours of staff time to draft, publish and respond to the RFI. Option 2: Some Cities such as Mesa, Arizona and The Dalles, Oregon are publishing RFPs that would require the private partner to construct and run a secure municipal WiFi network in return for access to City vertical assets such as power, light and signal poles, tall buildings, etc. Portland, Oregon has recently gone "Live" with a similar public/private partnership focusing on revenue from Internet advertisements to off-set the private investment. The primary cost would be staff time. The Dalles spent about $5,000 and significant staff time to publish their RFP. Option 3: Hiring an engineer to perform Radio Frequency and Coverage testing would provide useful information if the City wanted to prepare for future Municipal WiFi endeavors. Not all Cities are good candidates for Municipal WiFi. Estimate $10,000 or less to do Radio Frequency and Coverage testing. Option 4: Option 4 minimizes risk. Municipal WiFi is a rapidly evolving technical field facing. growing legislative interest at the State and Federal level. Municipal WiFi networks position Cities to compete directly with private sector Internet Service Providers. There are numerous examples of failed or under-performing municipal WiFi networks, through poor performance, insufficient bandwidth, insufficient public buy-in/subscriptions, higher than anticipated implementation and operating costs, etc. OPTION EVALUATION Option I would dedicate some staff time to the preparation of a RFI, without making a City commitment t~ take action based upon the results. If the City wishes to gauge private sector interest in a Public/Private partnership, this is a good option. Option 2 moves directly into a RFP. The primary costs would be significant amounts of staff time and the possibility that legislative or technical changes would present more attractive solutions in the near future. Some cities that have gone directly with a RFP have not received any qualifying bids from reputable companies. This was the experience of The Dalles recently. Option 3 is a good first step if the City is confident that we would like to enter the Municipal WiFi market space in the future. Coverage and Radio Frequency Analysis reports could present the City as a more viable and engaged partner to potential private sector companies. Option 4 is a prudent option if there are no compelling reasons to act immediately. With WiMax entering the scene, numerous private sector competitors, increased competition from digital cell technology providers, and the potential for Federal intervention, ubiquitous municipal WiFi may be a high risk project.