Portland, Oregon and Minneapolis, Minnesota are two metropolitan areas on a very short list of successful city-wide Wi-Fi business endeavors. Which is refreshing, compared to all of the metro Wi-Fi projects that are in limbo, delayed or even canceled. What are these cities doing differently that makes them a success story?
Portland uses ad based model
The Portland, Oregon metro Wi-Fi network is being built and managed by MetroFi, which uses banner ads, sponsor logos and paid search features to fund the free Wi-Fi service. For the most part, it appears that users do not mind viewing ads in exchange for free Wi-Fi service, as the Portland/MetroFi network is supporting a user base of approximately 20,000 people. In the coming year, MetroFi plans to introduce Microsoft’s MSN SideGuide as the advertising delivery platform, being less intrusive than banner ads. All is not perfect though, MetroFi has halted any new network extension, claiming that it needs an anchor tenancy commitment or additional capital to continue build-out of the network.
Minneapolis uses fee based model
The Minneapolis, Minnesota metro Wi-Fi network uses a different approach in that it is a fee-based service. US Internet is the independent company building the Wi-Fi network and responsible to the city of Minneapolis for the network’s upkeep. US Internet expects the metro Wi-Fi network to be financially self-sustaining by February of 2008. In this Minneapolis Star Tribune article, Joe Caldwell—vice president of marketing—mentions:
“The network will be able to fund its operations from customer fees for Internet access when US Internet signs 10,000 customers.
US Internet had more than 5,000 customers in early November, and has more than 7,000 people registered for service when it becomes available, so the company should have no trouble reaching the 10,000 number by about February.”
Even though Minneapolis’s metro Wi-Fi network user base is not as large as Portland’s, it appears that the business partnership is a great deal healthier. Many feel it is because of the following reasons:
• US Internet planned the network with greater density, which prevented the huge cost jumps seen by other metro Wi-Fi build-outs.
• US Internet secured a contract for services from Minneapolis.
• US Internet obtained an advanced payment for future service.
• US Internet helped vindicate the city government’s decision to install the metro Wi-Fi network, by responding quickly to the 35W bridge collapse this past summer.
I live in the Minneapolis, MN area and watch with fascination as the metro Wi-Fi network continues to grow. I personally understand the convenience of near universal Internet access already, having a Sprint data card. Once the metro Wi-Fi network is completed, it will not take others very long to realize those same advantages and at a cheaper monthly rate.
I also wonder how this will affect other companies supplying fee-based or free local Wi-Fi access. Will the convenience of have access to the metro Wi-Fi network outweigh the financial cost? Or will most people still use one of the many free hotspots?