Taxpayer Bailout Of Ill-Advised Business Needed
Subprime mortgage market? Stock market? What are you talking about? I was referring to BusinessWeek's report that municipal wireless networks are colossal money losers, and the companies that partnered with many cities and counties to offer it are tired of losing their shirt on expensive infrastructure and operating costs based on demand that never materialized. And so the taxpayers are being lined up to bear the cost of municipal Wi-Fi, whether they want it or not.
For now, a tiny user base can't even begin to cover an operator's
costs. Take Lompoc, Calif., population 42,000. The city deployed its
11.3-square-mile Wi-Fi network last September, at a cost of more than
$2 million so far. Today the network brags of just 442 users. Though
Mayor Dick DeWees hopes to reach 1,000 users by year-end, the network
needs 4,000 paying customers just to cover its annual operating costs.
In Lompoc's case, the city is wealthy enough to absorb the expense for
several years to fund a project it deems a public good. But companies
are bound to be less patient.
442 users. It would be cheaper for the mayor to just drive around and deliver buckets of ones and zeroes to everybody. Municipal Wi-Fi: The bizarro Field of Dreams. If you build it, they will... sign up for DSL with a telecom.