Interesting that the city changed the contract after the fact.

Peter R. wrote:
MobilePro Ditches Muni Mesh Project

Wireless data specialist MobilePro this morning walked away from its contract to build a citywide Wi-Fi mesh in Sacramento, Calif. - only two months after the first test system went live - in what looks to be an acrimonious disagreement with city officials over the economics behind the deal.

MobilePro says the city blindsided it with new contract requirements that would require it to give away high-speed service for which it had planned to charge. In addition, the company says the city has withdrawn guarantees that the company would serve as "anchor tenant" for the network in order to provide the revenue to provide lower-speed service to economically disadvantaged residents.

MobilePro won the Sacramento contract last year, beating Motorola and AT&T (then known as SBC) for the business. The plan called for a mesh that initially covered Sacramento's downtown, Old Town and state-capital areas - an area of about 10 square miles - with the entire city to eventually be built out in phases.

MobilePro was to provide various free and fee-based services with secure high-speed data, voice and video throughout the planned coverage area. Subscriptions were to be sold on an annual, monthly, daily and hourly basis. Multiple Internet service providers (ISPs) were to be allowed to sell their services over the network. The entire project, MobilePro says, was to be based on its massive project in Arizona, which started in the city of Tempe and which has since grown to include neighboring municipalities to create a muni mesh sprawling across 187 miles of Arizona, the largest so far seen (TelecomWeb news break, March 16).

After what MobilePro termed "a lengthy permitting process," it finally launched its first pilot test in April in an area around the city's Caesar Chavez Plaza park. The pilot launch included a ribbon-cutting ceremony, with local politicians mouthing predictable platitudes about "cutting the wire" and the importance of the whole thing to the city and its "residents, students, visitors and businesses."

Meanwhile, things weren't going smoothly behind the scenes. MobilePro says the city sent it "a counter proposal requiring that the company establish a free high-speed wireless network supported almost exclusively by advertising revenue without the benefit of the city serving as an anchor tenant."

Such a demand directly conflicts with the original plan, according to a .PDF presentation on the Sacramento City Web site. In that presentation, the city outlined a project with free 56 Kb/s service, but residential service priced at $20 month for 1 Mb/s and $30 per month for 1.5 Mb/s; higher prices were detailed for business service or service that includes VoIP. There also was a somewhat sneaky price plan of $4 for one hour of service - an emerging tactic in the industry that can zing a "single shot" user with what is really an astronomical fee for a few bits of data - but just $6 for an entire day or $10 for a week.

"Based on the company's successful Tempe, Ariz., model, MobilePro's original proposal provided for limited-area, limited-bandwidth, no-cost service but required higher- bandwidth broadband users to pay a monthly fee," the company says, adding it "also offered an alternative designed to close the 'digital divide' to the city's low-income quintile of residents, which included the city serving as an anchor tenant, but this proposal was likewise rejected by the city."

Thus, the company says, it has now rejected the city as a customer.

MobilePro President and COO Jerry Sullivan, in a prepared statement explaining the decision, said, "It is our understanding based on the final request of the City of Sacramento that the city would require MobilePro to provide free high-speed wireless Internet service to all residents and have the company rely primarily on advertising revenues for its profits and returns on investment. Based upon MobilePro's research and experience as one of the leading Wi-Fi broadband wireless network service providers to municipalities in North America, MobilePro does not believe that an advertising-supported business case is financially sustainable. At this time, we view such a restrictive economic model as incompatible with our original long-term plans for both the residents of Sacramento as well as the MobilePro stockholders."

As of press time, the city of Sacramento had not said what it now plans to do, if anything, to offer a municipal mesh network.


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