Nov. 29, 2006, 12:33AM
MULTIMILLION-DOLLAR PROJECT
Two front-runners are competing to build city's wireless Internet network
One affiliated with EarthLink; the other is a new local consortium
By ALEXIS GRANT
Copyright 2006 Houston Chronicle
THE COMPETITORS
City officials are considering these two companies to build a citywide
wireless Internet network. They could choose one by month's end.
• EarthLink Municipal Networks: Formed four years ago by Internet
service provider EarthLink, the company has projects in several cities,
including Philadelphia.
• Convergent Broadband: The local group, headed by former Reliant Energy
CEO Don Jordan, was founded last year to bid on the Houston contract.
A national company with an impressive résumé and a newly created
consortium with a local punch are the frontrunners for a
multi-million-dollar project to build and maintain Houston's wireless
Internet network.
San Francisco-based EarthLink Municipal Networks, run by one of the
nation's largest high-speed Internet service providers, is already
building in several cities. It's going head-to-head with Convergent
Broadband, a local group headed by former Reliant Energy CEO Don Jordan
that has ties to business leaders in Houston.
"If everything is equal, there's a preference for dealing with a vendor
that has a strong local employment base and a commitment to the
community," said Mayor Bill White. "At the same time, when dealing with
national firms, you're able to evaluate their performance in other markets."
White was speaking generally since he has not announced the two finalists.
He and other city officials have been mum about the vendor-selection
process, which began with five bidders, but he said the announcement of
a vendor could come as early as the end of this week.
Several sources involved in the process, who asked not to be identified
for fear of damaging their relationship with the city, confirmed the two
finalists are EarthLink and Convergent.
City officials say the network, which is expected to cost more than $40
million, will make Internet access cheaper for residents and businesses
and include an outreach program that offers low-income residents a
discounted rate.
Taxpayers won't have to pick up the tab; the project will be funded by
the company that creates the network and users who access it.
The chosen vendor will have the option of leasing the downtown Wi-Fi
network built to serve the city's new wireless parking meters.
With cities around the country building or planning to build municipal
networks, it's not uncommon for newly created local groups to bid.
But so far, cities embarking on the biggest projects, Philadelphia for
example, have awarded contracts to more established companies.
2008 completion date
At 600 square miles, Houston's project is expected to be the biggest in
the country once it's completed in 2008.
"That's a lot to chew off your first time at bat," said Michael
Garfield, a talk-show host who calls himself the High-Tech Texan. "They
(Convergent) may be able to pull it off, but that's very aggressive for
a start-up company."
Formed in early 2005, Convergent Broadband lacks a Web site (though
several other companies with the same name have Internet sites) and is
unknown to local technology experts.
While the company's name may be unfamiliar to Houstonians, one of its
founders, Jordan, is a politically connected local power broker and
well-known among business leaders.
With his leadership, Convergent has developed a Wi-Fi plan that includes
partnering not only with hardware suppliers IBM and Tropos Networks, but
also with a handful of Houston companies.
Jordan and other company leaders declined to comment, citing pending
negotiations with the city.
Four years' experience
Their rival, EarthLink Municipal Networks, was created by its parent ISP
four years ago to capitalize on the rush for citywide Wi-Fi.
It is building networks in several cities, including Philadelphia, which
at 135 square miles will be the nation's largest network — that is,
until Houston's wireless project gets under way.
EarthLink's Houston plan calls for working with Motorola and Tropos
Networks for hardware and other equipment, and hiring local contractors
to install transmitter nodes around the city.
"There's a lot less risk with a company like EarthLink doing it than a
local company," said Don Berryman, president of EarthLink Municipal
Networks, who would not speak specifically about the Houston bid.
Some experts say even a local company with no experience has advantages
over a national competitor, simply because local leaders know how to
best navigate the community.
"I'm personally very surprised that more local utility energy companies
have not gone into this market," said Esme Vos, editor of
MuniWireless.com, which tracks Wi-Fi projects around the world.
Boost from Philadelphia
Others side with the more seasoned vendor, including Greg Goldman, CEO
of Wireless Philadelphia, the nonprofit group set up by the city of
Philadelphia to manage its Wi-Fi project.
"Having a big company that brings a lot of resources to the table and
has done this kind of thing in other parts of the country is overall an
advantage," he said.
"A local consortium brings advantages too, but where's the backing going
to come from, and where are the dollars going to come from?"
Convergent has secured potential investment from local companies, though
some won't fully commit until Convergent has won the bid.
That financial security is one of the issues White has emphasized from
the beginning.
It's critical, he said, to fund subsidized access for low-income users
and hedge against vendor failure.
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