There’s A Lesson Here…….

Government steps in to provide low cost services to the citizens. Promise is high, the rhetoric is glowing. Things are going to be great - and all for free! Then reality sets in and the government finds it can't keep the promises it made. Costs multiply. Businesses are forced into reorganization as the whole house of cards collapses. There is a lesson here about letting the government run anything, be it health care or, in this case, free wireless internet access.

WASHINGTON (AFP) - Ambitious plans for big Wi-Fi networks to provide free or low-cost wireless Internet access are being abandoned or scaled back by US cities as the economics of the deals turn out to be more challenging than expected.

San Francisco and Chicago in recent weeks abruptly halted plans to set up municipal Wi-Fi networks while Internet giant Earthlink, a partner for a number of cities, has begun a reorganization that will limit new projects.

Wi-Fi, one of the most popular standards for wireless Internet access, had been seen as a means of connecting more people at a relatively low cost, and city leaders across the United States had been rushing to use the technology for "digital inclusion" programs for low-income residents.

But cities and companies are finding the economics more difficult, with many expensive access points needed and relatively small numbers of subscribers signing on.

"I think it's a troubled market," said Daryl Schoolar, senior analyst at the research firm In-Stat.

"Some thought a lot of people would rush out with laptops and would use it. But Wi-Fi doesn't really penetrate buildings well. And people use Wi-fi mainly in hotels, airports and cafes."

Although some privately operated Wi-Fi deployments in these high-density locations have become popular, analysts say the notion of a large municipal network blanketing cities is questionable.

MuniWireless, a website tracking municipal projects, counts over 400 cities in planning or development of Wi-Fi networks. But analysts say only a small percentage of these are operating, and many are primarily for police or public-safety access.

"The problem is finding a business model that really works," said Stan Schatt, analyst with ABI Research.

The final sentence in the article says it all:

"When government gets involved in these projects, no matter what government, it just trips over itself."

If they can't manage wireless access, why in the world would you want them controlling health care?

Other Links to this Post

1. Blue Crab Boulevard » And Another Lesson — Sunday, 23 September , 2007 @ 3:48 pm