2 firms interested in Toledo Wi-Fi

2/21/2007

The city of Toledo and Mayor Carty Finkbeiner asked for the world when they put together a proposal for citywide Wi-Fi.

What they got may be closer to an asteroid.

Although hoping for several bids to provide the city with free Wi-Fi service, Toledo received only two Wi-Fi proposals by its 2 p.m. deadline yesterday, one from Buckeye CableSystem of Toledo, and the other from MetroFi of Mountain View, Calif. - neither meeting the city's request for free wireless Internet service for city government operations.

What MetroFi dangles in front of the city is free Wi-Fi service for every city resident willing to look at advertisements while they browse the Internet. Residents who prefer ad-free viewing would pay $19.95 per month for the service.

In the MetroFi plan the city would pay at least $2.2 million over five years as the "anchor tenant" of the wireless network. But costs could reach $4.3 million if the city chooses to add a licensed frequency for city safety services, something that was done when Riverside, Calif., deployed its Wi-Fi network with MetroFi. Public safety is Toledo's No. 1 reason for seeking a Wi-Fi contract.

Brian Schwartz, the mayor's spokesman, said city officials would have no comment on the proposals until they were reviewed.

Earlier potential bidders who chose not to submit proposals were EarthLink, AT&T, 20/20 Communications, which is installing a Wi-Fi network in Wash-tenaw County, Michigan, and CISP, a Toledo Internet provider.

The Buckeye proposal approached the city's request for proposals as an invitation to begin an analysis of what the city needs. Buckeye is owned by Block Communications Inc., which also owns The Blade.

Buckeye estimated the cost of building a network in Toledo could range between $11 million and $17.6 million, and said the city should be an anchor tenant - that is, a paying customer - on the network.

"Because anticipated advertising revenue and income from fee-based services are great unknowns, having some assured stream of revenue is essential to justify such a large capital investment," the Buckeye proposal states. The document didn't say how much the city might be asked to pay.

Buckeye offers a three-phase plan beginning with a series of community meetings to understand business and residential broadband needs. It expects the first phase to be completed in 90 to 150 days.

In Phase 2, Buckeye would create a demonstration project in one area of the city to test network use and commercial viability. It projects 120 to 180 days for completion of this stage.

At that point, the city and Buckeye would "determine whether there is a sound basis to proceed with a Phase 3 citywide build-out of the system, and if so, the financial and operational terms of a final agreement."

"The main idea is: Let's understand the feasibility, let's work through a relevant business model and come up with something that would work for all partners," said Joe Jensen, Buckeye's executive vice president and chief technical officer.

"We don't know what the demand for service is," said Tom Dawson, a spokesman for Buckeye. "We have three years' experience with Wi-Fi. We feel there's a whole lot more research that needs to be done."

Buckeye now provides Wi-Fi service at nearly 40 locations in the Toledo area, including every branch of the Toledo-Lucas County Public Library, several YMCA facilities, Fifth Third Field, and at numerous businesses.

MetroFi's proposal stated it could complete 90 percent of Toledo's 88-square-mile network within six to nine months of the contract signing.

The firm's proposal also states it is installing a 134-square-mile network in Portland, Ore., has networks in nine other cities, and proposals in six more.

At least one expert thinks MetroFi's growth is something to worry about.

"The last figure anyone could pry out of them was that they had $15 million in investment capital," said Craig Settles, a technology consultant and owner of Successful.com in Oakland, Calif. Yet, Mr. Settles points out, MetroFi is building a $10 million project in Portland, has contractual obligations to build in other cities, and Toledo could cost another $10 million to build.

"How are they going to front that many projects when you only have $15 million in the bank? ... I know why cities won't probe into it: They want the freebie," said Mr. Settles, who follows Wi-Fi development nationwide.

He questions whether Toledo businesses have the advertising revenue to support the system MetroFi proposes.

Mr. Settles said the plan would require 1,000 to 2,000 businesses to "take out $8,000 to $10,000 out of their advertising budget or marketing budget to pay for ads on the network. I'll bet you dollars to doughnuts no one has asked the business community what they think of such a venture."

Ben Zifrony, vice president of sales and business development for MetroFi, is confident in the company's business model for Toledo.

"We analyze each city pretty thoroughly," he said.

MetroFi representatives would not answer specific questions about financing.

Contact Jenni Laidman at:

jenni@theblade.com or

419-724-6507.