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August 2007 Archive

Electric Utilities and Metropolitan Broadband - a Relatively Untested Opportunity, in Critical Need of Attention

As further evidence that there is life after EarthLink (please), I point my readers to an important use of wireless broadband networks, beyond providing access to the Internet and the World Wide Web. A Metropolitan Area Network (MAN - a few blocks to a whole city) is midway in size between a Local Area Network (LAN - office, residence or coffee shop) and a Wide Area Network (WAN - cellular network). A MAN enables communication over that wide area, and one of the biggest challenges cities have is gaining access to data from across a wide area. Cities that are willing to change their business processes and move to a more automated platform can gain incredible efficiencies, but undergoing such change is no walk in the park, if you will pardon the pun.

In the Analog World, cities sent people out in the field to find out what was happening. In the Digital World, cities can use new tools to gather information remotely or make their field employees more effective and efficient. Digital advances allow cities to manage the distributed infrastructures under their purview more cheaply and far more effectively and to increase public safety - two of their primary objectives (crime and potholes).

Think about it. A city covers a wide area and city staff are responsible for maintaining a complex system of infrastructure, including some combination of the following:

Electric Power Lines and Meters
Water Pipes and Meters
Gas Pipes and Meters
Parking Meters
Traffic Lights
Video Surveillance Cameras (new)
Streets, Roads, and Bridges
Parks
Fire Department vehicles and stations
Police Department vehicles and stations

For more background on how a wireless network changes the game, see this excellent article Cities Get Smart with Wireless Sensor Networking. With a better understanding of the relationship between wireless networks, sensor networks, and distributed infrastructure comes a realization that there is far more value in a municipal wireless network than in getting out to a website or checking an email. The issue of infrastructure maintenance and disaster recovery is getting more attention now thanks to the dramatic and tragic collapse of levies in New Orleans and more recently, the I-35 bridge in Minneapolis.

Cities that own an electric utility are in a great position to take advantage of new broadband communications technologies, as are larger electric utilities. They produce significant revenue, they manage a critical distributed infrastructure, and they have a critical task to manage in the event of an outage. I offer up also a white paper I worked on with Craig Settles (Successful.com) this spring, showing how cities are putting together wireless broadband projects with automated metering infrastructure (AMI) projects. After some discussion this spring, we managed to get two sponsors lined up, Nortel (Wi Fi) and InfoIntellect (AMI vendor - web site currently under construction).

I had called Craig this Spring because my client now, my prospect then, had two RFPs out on the street, one for a wireless project, and another for an AMI project. The City of San Marcos, Texas, I'm happy to say, chose MetroNetIQ in their infinite wisdom to help them with their wireless project. They currently have two simultaneous projects underway. Besides the wireless network, over which they will run municipal applications (we expect responses to the RFP on September 27), they've hired a company called UtiliWorks to execute on a plan to bring in Automated Meter Infrastructure (AMI) for their city-owned water and electric utilities.

Note for later - the relationship between these two projects, and between MetroNetIQ and UtiliWorks, is a fascinating new area to explore as we look to fill the gap left by EarthLink - this is a new way to bring in Wireless and get it funded.

City leaders anticipate that the two projects, Wi Fi and AMI, have great potential to work together, and that, I believe, makes both of these projects unique and attractive. This spring, I was updating myself on the connection between AMI and Wi Fi when I called Craig, but really, I've been looking at this connection since early 2004. MetroNetIQ has a significant background in this area - just see these background documents I authored in 2005: Whitepaper on AMI, Whitepaper on Municipal Utilities, and Whitepaper on Outages.

When I called Craig, I was curious to find out if other cities were going down this path (besides Corpus Christi, which is perhaps the best-known AMI / Municipal Wi Fi Case Study). After all, AMR / AMI is often listed as an example by mesh equipment vendors and others as a wireless application that could benefit from a wireless network. Apparently these projects are still small in number, and while there is progress, it will be a while before we have more case studies to complement the very good information that Corpus Christi has provided.

Q. Why is this train of thought so potentially significant?
A. There are implications way beyond the Municipal Wireless Industry.

Few outside the electric industry really understand the precarious situation that our American domestic electric industry is in. While America's infrastructure crisis should get their attention, this article highlights in particular the perilous state of our nation's electricity grid: Is PG&E fiddling while the grid burns?.

BTW, I just watched a fascinating video - Enron, The Smartest Guys in the Room, which describes the California energy crisis, among other things. Fascinating, and revealing insight on what happens when power is cut off, intentionally in this case, with rolling black outs caused by Enron and others.

But back to our discussion on the Internet and Municipal Wireless. The Internet relies on the electricity grid to function. And there's the rub.

... massive power outages caused by snafus at PG&E, our local power company. This resulted in a transformer blowing up, and causing even more disruptions, especially at 365 Main, one of the large co-lo/data center facilities situated in the SOMA area of San Francisco. This resulted in massive outages at some of Web 2.0's brand name companies - Six Apart, Facebook, Technorati and Yelp - knocking their systems and web services out flat. Whatever the reasons behind the failure might be, yesterday was a rude reminder of how fragile our digital lives are.

The seemingly invincible web services (not to mention the notional wealth they signify) vanish within a blink of the eye. It was also a reminder, that all the hoopla around web services is just noise - for in the end the hardware, the plumbing, the pipes and more importantly, the power grid is the real show.

According to North American Electric Reliability Council (NERC) there has been a 50% decline in the capital expenditures by utilities over the last 15 years. The underground cables are crumbling. This report in Fresno Bee takes PG&E to task.

This is not just a problem with PG&E. Power grid across the country is aging. It is ironic because data centers/hosting business is one where US companies still dominate. The reliable data center/colo facilities have been a distinct advantage for US start-ups, especially the Web 2.0 start-ups. And yet we continue to bet our future on this creaky house of cards. That's like building a Taj Mahal on quick sand. The Internet's Weakest Link

And what's more, there are financing alternatives that arise when a critical application like AMI is tied to a Wireless Broadband network project. See also Funding Alternatives. We'll have to explore this further in another post.

Oh, and by the way, to drive this point home, this critical issue of infrastructure has ABSOLUTELY NOTHING TO DO WITH EARTHLINK, LARGE CITY DEPLOYMENTS, AND FREE WI FI.

Posted on August 31, 2007 at 09:52 PM | Comments (0)

TGILDW - Thank God It's Labor Day Weekend

Pheww. While I have the EarthLink Withdrawl in perspective, I'm still concerned about the ripple effects on the industry. I've blogged a lot this week, trying to put events in perspective. So, I'm looking forward this late Friday afternoon to the start of Univ of Texas Longhorn football season tomorrow evening, and a nice Labor Day. TGILDW!

I thought I'd take one last stab at perspective before I quit blogging for the week though. Nearly two years ago, I cited these fundamentals in a PTI Seminar Keynote, when asked to answer the question "The Future of Community Broadband - Why? How?" (I posted links to these materials in my recent blog, Amid the Hype Crash, Hope Floats.)

Why? External Pressures Drive Change

Pressure from the Technology Environment
1. Broadband has become a new utility.
2. The maturing Internet is realigning our economy.
3. Technology and innovation have become relentless forces for change.
4. Mobile technology is a better match.
5. Government must go digital to keep up.
Pressure from the Competitive Environment
6. One global marketplace makes every region compete with every other.
7. Cities are committed, for the long haul.
8. Cities are under cost reduction pressures, networks offer business process improvement opportunities.
9. VOIP drives voice costs down, opens opportunity for dramatic cost savings for cities.
Disaster Preparation Requires an Alternative Communication Solution
10. Cities must have better, more open and flexible disaster recovery communication networks.

How? Transition to Wireless in Stages

Pioneer Stage - Cities Experiment with Municipal Networks
1. Small cities pioneer and large cities follow.
2. All networks are custom, pioneer models become differentiated.
3. Increasing awareness drives adoption.
4. Cities will adopt Public Private Partnership model as most effective.
5. A Killer App will drive adoption of networks – VOIP is most likely candidate.
Rapid Expansion Stage - Larger Organizations Adapt, Trend Explodes
6. Homeland Security will adopt guidelines for municipal networks.
7. Electric utilities will adopt municipal networks for improved outage recovery.
8. Homeland Security will require cities to have redundant municipal networks to be able to communicate in a disaster.
9. Incumbent Broadband Providers will adopt municipal networks to reach territory that is too expensive for them to serve.
Consolidation Stage - Nodes Transform into a National Network
10. Municipal Networks will be knit together into a national CitiGrid™ for National Defense.

Who knows if things will unfold this way, or what the timetable will be. The key point for including this is to provide a reference point that not all of us were pinning our hopes on the success of large city deployments, even two years ago. And look at these fundamental drivers in this list - none of those have changed because of the events of this week.

Clearly, I think the industry got things backward when it shifted its focus to big city deployments after EarthLink began to get all the attention, when city leaders expected to get their networks risk-free, and when most of the press connected "Free" and "Wi Fi" so consistently. This is a market correction, not a market failure. Market corrections are part of an experimental phase, after all. One might also argue that we are still in Step One of these Ten Steps.

In fact, I posted a comment on MuniWireless this afternoon, Muni Wi Fi: The Paths Forward, included below. This short comment pretty much captures my attitude about things this week.

I've been posting on these events on MetroNetIQ. The principal bottom line conclusion I can make after a long week is that considerable noise, press, and attention in this industry flowed to EarthLink after they announced they would build the Philadelphia network on their nickel. Since that date, cities lined up in the hopes of getting their "free pony ride," and that seemed to be all that the main stream press wanted to cover.

Collectively, those of us who sought to shift the conversation to other models, to multi-purpose networks, to models where cities paid, etc. could not get much attention, when all the buzz was about "free" Wi Fi and ever larger big city networks in SF, Houston, Chicago, etc.

While I feel for EarthLink and all their problems, I'm breathing a sigh of relief, because like a strong wind that blows away the sand to reveal what lies underneath, we can now hope to get some attention for more sound business models and other applications that were relatively ignored before.

Let's hope so, because underlying technological drivers have not changed. We still need more broadband, cheaper broadband, mobile broadband, disaster broadband, and rural broadband; incumbents will still be slow to provide it, and Wi Fi Mesh and WiMAX still have a role to play.

We need to move away from thinking only of citywide networks to think of Hot Zones, away from single purpose networks to think of multiple niche applications sharing a network, away from residential access revenues to think of industrial access revenues from AMR and other distributed infrastructure monitoring, sensor devices, and video surveillance support, to name just a few.

We need more creativity and imagination, and finally, a lot more patience. Our thinking to date has been too one dimensional.

Posted on August 31, 2007 at 04:05 PM | Comments (0)

A Modern Conundrum: Too Much Information, Too Little Time

As a municipal wireless consultant, I read multiple blogs and on-line news sources daily. I'm expected as a professional to understand in-depth the issues that comprise my industry, and those issues change daily. As a political junkie, I also have about 20 political blogs and news sources bookmarked on my Firefox web browser. When I have free time, or when I need a break, I often surf these sites as well (I have to admit I probably spend more time over there on those sites than I should).

As I look back on the reporting this week regarding EarthLink's pull back and big city reactions - I've covered the issue pretty thoroughly in my past five posts - what we might call the denouement of Act One in the play, "How Will We Connect With Each Other?" - I'm struck that were I the average Joe on the street, or even, an educated public policy maker, I'd still be confused as to the issues and what the bottom line is. I certainly wouldn't understand with any depth or detail what the stories meant, or the underlying issues and nuances, certainly not at the level that we do inside this industry.

For better or worse, in the Age of the Internet, we are more or less stuck with having too much information and too little time to process it.

When we drink at this fire hose of information, we're limited by the time we have to consume and process. It's what we would call a hard constraint in a business analysis. So we rely on professional journalists to interpret for us, and on insiders and consultants to share their perspectives in Op/Ed pieces and magazine-length articles.

These days, more and more, we also depend on Blogs, which can be at once more immediate, but also suffer from a lack of editing and a preponderance of opinion. I've charted out territory on this website that's a little unique, because I prefer to write longer posts than the average blog, more in-depth than the average news article, and yet more frequently than the average magazine. What's not unique is that my blog comes loaded up with my opinions. No editor, and I like it that way. It's free to everyone, so readers vote with their browser.

I recently resubscribed to the Economist, a publication I value for its sound reporting, smart approach, and on-target analysis. They go deeper on issues and provide a non-American perspective, and as a weekly, they stay very current. Ironically, I don't find the time to read as much of each issue as I'd like.

And on my blog, you'll note that I often quote Glenn Fleischman, publisher of Wi Fi Networking News, as one of the key analysts in the industry. These two threads came together this week with an article in the Economist penned by Glenn, entitled appropriately enough, Municipal Wi-Fi | Reality bites. I found it to be well written and very timely, a good summary of this week's events, better than I would have written.

This morning, I scanned Daily Wireless, a blog written by Sam Churchill up in Portland, OR. I've known Sam for four years and I'm continually impressed with his reporting: he provides a prodigious amount of information in his daily website - no doubt, it too is a valuable resource.

But like any blog, the reporting and facts on DailyWireless come bundled with Sam's opinions, which were front and center in his piece this morning, Not Dead Yet.

I felt compelled to call Sam to task on his posting this morning, and to highlight a couple of mis-statements that would otherwise lead a reader astray.

First, Sam's opener is bold, but flat out wrong, when he states:

It's funny how all the pundits, including MuniWireless, now claim they saw this coming long ago. They didn't. The only one who accurately predicted the (hopefully temporary) downturn for municipal wireless was John C. Dvorak who said Muni WiFi Will Die in a Market Watch column, 30 November, 2005.

That's a very bold, and somewhat snarky position to take, IMHO. It's all encompassing in nature and I don't know what purpose his statement serves. Is he really casting doubt on the whole population of pundits with his assertion?

First, Dvorak wrote an opinionated piece in 2005 that debunked free citywide Wi Fi (good), but also cast aspersions on free Wi Fi in local venues (wrong), and even on WiMAX (premature). His analysis was flawed, certainly to the point were I wouldn't offer it up as the sole "accurate prediction" as Sam did today. Fact is, broadband infrastructure remains a complicated proposition and it's still premature to say anyone has accurately predicted anything. And, as far as I'm concerned, so what if they did. We all provide analysis and correct it as we get more facts. It's not wrong to offer up your opinion - its what we do on blogs, and nobody has a crystal ball when it comes to Broadband.

In fact, the wonders of the Internet and digital information let you make the determination for yourself. Don't believe me? Just go check out the writings on a variety of websites, and I suspect you'll find a lot more critique of the conventional wisdom than Sam lets on.

See Sam himself on DailyWireless where he has offered valuable commentary, as have I on MetroNetIQ, certainly Glenn Fleischman at Wi Fi Networking News, Daniel Aghion and his colleagues at W2i, Esme Vos and her colleagues at MuniWireless, Karl Edwards at Excelsio Communications, Craig Settles at Successful.com, Eric DaVersa at NetLogix (I could go on and on).

All these pundits and industry experts at some point in the past two years offered up the need for sound business plans, reasonable partnering practices, and multiple application strategies as keys to success in this new field. While we may not have staked out bold positions that criticized EarthLink or forecast gloom and doom regarding the big city visions, we did provide sound analysis that offered up alternatives and warned of potential hazards of overly rosy scenarios.

Fact is, we hoped these projects would be successful, even as we claimed all along that cities needed to provide anchor tenancy in realistic Public Private Partnerships, that equipment makers needed to address the issues with indoor signal penetration and inadequate network design, and certainly on this site, that multiple smaller projects would provide more feedback and lower risk than a few very large projects (that last piece has been a mantra of mine "Small is Good, Simple is Better).

Second, Sam passes over most of the insight offered by Glenn in the Economist piece and goes to an issue he knows well - the details on the Portland situation, since it's in his backyard. His simple statement "Meanwhile, Fleischman gets his facts wrong in the Economist," is misleading - Glenn may indeed have missed a nuance on one tiny piece of his article regarding one deployment, but by and large, his reporting is highly accurate, IMHO.

Finally, Sam's statement - "Everyone wants Free Wi Fi to work." - completely took me by surprise. Huh? For too long, people have conflated Wi Fi and Free, and here Sam does it again!

It would be accurate to say "Some to this day persist in promoting Free Wi Fi" or "In a perfect world, we'd all rather get things for free than pay for them, but surely, we don't expect that - its a fantasy." Or even "Everyone wants more options and better Broadband Infrastructure," or something to that effect. I don't know where Sam gets such an opinion to make such a bold assertion - I for one don't share it, never have.

So, I offer up this example to describe how confusing it can be to get at the truth in this industry. The issues are nuanced and complex. There are competing viewpoints galore. Rapid changes in technology and multiple levels of political influence mean that the situation is highly dynamic. Even as we value certain sources of information, sometimes they get it wrong. There is no way to make this particular complex issue simple, and so there is no substitute to go to school on the issue and get smart - as I say in the heading on this website, for 18 months now: "Raise Your Network IQ, Feed Your Head."

For my part, I'll remain a skeptic to conventional wisdom, but I'll also keep reading DailyWireless, Wi Fi Networking News, MuniWireless, and the Economist, and all the other sources I count on. I'll compare what I've read to my own internal sense of the world, and in so doing, I'll sort out the wheat from the chafe.

I recommend that those serious about this technology and industry do the same, and always, always, take what you read in the press and on-line with a grain of salt. Everything is written with a bias and a POV. Challenge what you read and what you know, and compare notes with colleagues to get at the Truth and to stay current.

And when necessary, for Pete's Sake, when you're ready to commit funds or make an important decision, spend the money to hire a qualified consultant in order to gain expertise, insight, and a pipeline to an industry. It will lower your project risk and ensure a better outcome than going it alone.

Posted on August 31, 2007 at 11:24 AM | Comments (0)

Head in the Clouds, Feet on the Ground

There's been a surreal quality to the events of this week for many of us, maybe just a surreal climax to a somewhat surreal four years. See, many of us all along watched in fascination as the main-stream media tried to explain what was happening in the wireless broadband industry to their main-stream audience as an extension of the DSL and cable broadband access so many were used to. It was far more sexy to talk about a potential conflict between public and private sectors, or how wireless could impact the Triple Play plans of incumbents, or my personal favorite, how we could all have FREE access to the Internet, or get on line while sitting on a park bench.

Only problem was, there was no sound or robust business case to any of those plans. So now, when those plans tank, or waver, as they were bound to, the main stream press all but writes an obituary for Municipal Wireless. In a word, this is an over-reaction - they are still getting the story wrong, in order to tell a more simple story. Better to not tell the news at all, than to mislead, IMHO.

Ironically, the main stream press slowly became actors on the stage itself, as they helped to drive the focus and attention of the industry to the large scale deployments they reported on, projects that were based on a shaky business case of a single use - residential and public broadband access. Their coverage was like warm Gulf water under a hurricane, increasing the spin of the Hype Cycle.

We all knew it, but who am I as a lone consultant to challenge the power of the New York Times or the Wall Street Journal, much less the Market, with a capital M. The fact is, we were all too small to individually impact the direction the market took, and once it took off in that direction, we were obliged to tag along. We didn't choose EarthLink as the poster child for this new industry, but it was irresistible to ride their coat-tails where we could. I bet if you took a poll, we would say that we were glad they were there, because the industry got more attention. And we regret their retrenchment.

I talked to many a disgruntled service provider over the past two years, as they filed their RFP responses, complaining all the way that the business models demanding free this and free that just didn't make sense. Revenue had to come from somewhere, after all.

So, we kept plugging away with our message of what we saw as the Truth, that there was tremendous potential in the changes we saw happening. But it often seemed as if nobody was listening, or they would only hear what they wanted to hear.

It's as if Wi Fi Mesh were a new Swiss Army knife that had been unveiled - Ta Daaa! - it could enable a slew of niche applications, all significant in their own right, if a little more complex to understand and a little more difficult to communicate and launch. Sure, Wi Fi and unlicensed spectrum in general had its bugs and flaws, but it was innovative and it was disruptive.

Yet everyone continued to talk about the fantastic uses of the Swiss Army Knife as a, well, as a pocket knife. "See how it holds an edge, and boy, can you whittle with it!" Wi Fi Networks were seen primarily as a means to connect to the Internet, and their primary purpose was to offer an alternative to DSL and Cable broadband, which was too expensive for many to afford in mostly duopoly markets. That shifted the focus to holes in coverage, the need for bridges in window sills to get an indoor signal, etc., which did not put Wi Fi Mesh in the best light.

The versatility of outdoor wireless broadband technologies always meant that the networks they enabled could serve several purposes. They could be as large or small as you needed, they didn't require any streets to be dug up, any IP application could run on them. They were modular and scalable. Most notably, they could be used to support niche mobile broadband applications for industry and public sector users. With enough deployments, the bugs would be worked out. After all, cellular service was hardly perfect when it rolled out, much less now - "Can you hear me now?"

I've talked about several new innovative approaches that have become available because of these new technologies on these very pages since I first started blogging in May 2005. But uptake on these applications was slow, as long as the buzz was all about getting an RFP out on the street, so a city could get a FREE network built by a third-party service provider. After all, just how interesting would it be to go out and buy a pony, if there was a free one waiting in the wings. "I'll take my chances and wait for the free pony, thank you," many municipalities seemed to say. And after all, as long as that was an option, who could blame them. I'd have done the same.

So, while Wireless Mesh networks could indeed provide broadband access, that was not at all their best feature. We'll see more and more of these articles now, and let's hope that cities will respond. For instance, see today's Moving Beyond Single-Use Public-Access Models - Government Technology and What Now for Muni WiFi?.

Being a technology innovator is no picnic. Pushing out the envelope to provide better service at lower cost will require creativity, patience, and persistence. Mistakes will be made, but errors and flaws will lead to product improvements and lessons learned, if we are deliberate about it. Experiments will need to be conducted and analyzed, and the results should be shared and discussed. In this way, as we all work together to push the ball forward, we will all benefit from industry progress.

Keeping one's head in the clouds is a metaphor for keeping an open mind and staying innovative. Keeping one's feet on the ground is a metaphor for staying rooted in reality. Doing both at the same time is a stretch, if you'll pardon the pun, but it's the only way to make progress. It may take longer than we'd like, but that's Reality with a capital R and it doesn't suck as bad as it may seem right now.

Posted on August 30, 2007 at 07:11 PM | Comments (0)

Picking up the Pieces, Many New Paths

Expect to see all sorts of reactions as cities digest the changes on the municipal wireless scene. Just how city leaders react will no doubt be very subjective. Factors that will guide their decisions include how far along a city is with their plans, how they expected to use the network, and how bold and committed the leaders are. Perception of risk will be a key factor.

For those cities who had counted on a free ride (Chicago, Cleveland), recent events may be quite discouraging, because they point to cities bearing more of the costs and risks of network projects.

For other cities that had already counted on paying their way as anchor tenants (Houston), these changes should not dissuade them from their plans, because there is a lot more to this industry than EarthLink, notwithstanding the large role the company played.

Best off are cities that had made plans already for wireless applications such as public safety video, automated meter reading, or mobile data access for municipal employees (Corpus Christi, San Marcos). Where these applications are part of a practical business model to improve delivery of city services, a wireless network has a strong business case. Some of these, particularly those just starting out, may still pull back, if only because some cities see risks differently. But I'd expect to see more and more of these type projects, and that's good news.

As we see in this clip, Chicago is pulling back. They had planned on a low to no-cost network to satisfy Digital Divide concerns, probably working with EarthLink, so recent events have proven very disruptive to their plans. Who knows what is next for them.

On the other hand, we see Houston regrouping and moving forward in an uncertain direction. They've settled up with EarthLink, exercising a penalty clause in their contract that has EarthLink paying Houston $5 Million (lots of dough for a company trying to save money) for missing deadlines. EarthLink now has an option to move forward under a revised plan with the city or bowing out altogether. Houston can consider other options and that is intriguing.

Whatever happens, the city will keep the $5 million, and the city should use it to bridge the digital divide, perhaps by building smaller "Wi-Fi bubbles" over public spaces, the mayor said.

Personally, I think we'll see more of this - I like "Hot Zones," "Islands," or "bubble zones," as Mayor White calls them, because they allow for experimentation at less expense, and they are accessible - they let the public catch up with the idea of radio broadband. After all, its a new concept for most people and will likely take time to be fully absorbed.

One by one, we should expect to see many more cancellations and delays as these changes are digested. But I also hope that cities will decide to carry forward their plans amid this uncertainty, because infrastructure plans take time, and delays may only serve to derail projects that showed promise, with or without an EarthLink in the picture.

Unnecessary delays and cancellations will be a tragic outcome of this restructuring, if unavoidable and to be expected. The silver lining to this cloud, and I'm a silver miner, is that while there may be fewer projects, there will be more serious projects, and that's good news for the serious players in this industry - they will be better able to focus their limited resources on projects with higher chances of success.

Posted on August 29, 2007 at 04:01 PM | Comments (0)

Amid the Hype Crash, Hope Floats

Daily Wireless provides a good summary today of current news on municipal wireless, as does Wi Fi Networking News "August 28: Metro Shake-out: Chicago Cancels Wi-Fi, EarthLink Lay Offs, Kite Networks Deal Goes South(west), SkyPilot Layoffs Alleged" and MuniWireless, of course.

I spent a lot of time on the telephone yesterday, comparing notes with friends and colleagues. A lot of the comment can be summarized as "Yeah, depressing." and "Well, it was about time." and "After all, we've been waiting for the shoe to fall." In other words, many, if not most or nearly all of the consultants and industry insiders have been watching the progress of the much-ballyhooed large projects and scratching their heads.

It just didn't make sense, no matter how much we all wanted the projects to succeed. There were signs along the way that all was not right with the big city networks - in early August, NPR raised a red flag on Philadelphia (Philadelphia's WiFi Program Off to Shaky Start), and several weeks ago, the Toronto network was highlighted here. And it seemed that too much chance of success rode on the back of a single company, as EarthLink, began to look somewhat desperate to succeed with a model that was unproven and in an area where they had little experience.

Call it the Earthlink Model, if you will, where residential subscriber revenue made the business case and big city government officials negotiated not only for free access for their citizens, but also for a share of profits. How much blood can you squeeze from a turnip? Yet in the existing networks, those few that had already rolled out, expected revenue just was not flowing in (See this article from July), and other projects, though inked, were not beginning on time - bad signs, for sure.

Amid all the noise and hoopla and press regarding these big projects, however, there were myriad smaller projects that sought to mirror the big city approach, but also other smaller projects that were more soundly based on government applications first. So, there's more to the story than these headlines will tell, over the next weeks and months. Yesterday's market adjustment reminds me of the fall of the dinosaurs, so long ago. It's as if the big dinosaurs have been knocked out suddenly by the comet, and amid the dust and darkness, the little mammals, far less glamorous but with better survival skills, will have room to experiment and grow.

So, does this spell the end? For some who pinned their hopes on this doomed business model, it does. But is this watershed day really cause for doom and gloom? I would argue that embedded in any market correction are the seeds of the next market phase. We can lament the passing of the fantasy of Free Public Wi Fi for the masses in large city networks, perhaps we should, because it was an exciting ride - OK, let's have a moment of silence for just that.

...................................................................................................................................

REQUIEM IN PACE -
FREE PUBLIC ACCESS VIA LARGE CITY WI FI MESH NETWORKS

ATLANTA
CHICAGO
HOUSTON
SAN FRANCISCO
ETC

But before moving on, let's all first offer up our respect to the efforts of the many brave souls over the past four years who managed to raise awareness and give us all a vision of a world that could be, a different way of looking at how a society can communicate when using new technologies and new approaches.

Let's start with EarthLink and those large cities who had the courage to offer up a new vision, and take the political risk to promote change. And then let's roll up our sleeves and draw lessons from our failed first attempts, all the better to extract success from early failure, as so many others have done with other technologies in the past. For every Microsoft, there is a Netscape, for every Dell a DEC, Compaq and Gateway.

Now that we have that out of the way, (and let's hope we do, soon), I suggest that all those who still care about - a) compelling new municipal applications that bring new government efficiencies and enhanced levels of public service and public safety; b) enhanced regional competitiveness; and c) a more robust market of competitive alternatives to the current DSL, Cable, and Cellular privately offered broadband options - pause and take a deep breath.

It's time to let go of something that we never really did have (i.e., an opportunity to get something for nothing), and then look again more soberly at what we do have. Reality may suck, but hey, at least it's real and it will be here tomorrow - funny how reality has a knack of being dependable that way. And the situation is not half bad, when you put things in perspective, given the advances in technology and the raised levels of public awareness that we all enjoy, compared to just a few years ago. We're all smarter, a bit wiser, and better equipped to take control of our individual and collective destinies when it comes to broadband.

So, back to the Hype Cycle analysis from yesterday's blog.

2. "Peak of Inflated Expectations"
In the next phase, a frenzy of publicity typically generates over-enthusiasm and unrealistic expectations. There may be some successful applications of a technology, but there are typically more failures.

It was never a smooth ride up to the top of the peak, after all.

As you no doubt recall, throughout the fall of 2004 and into 2005, initiatives at the state level tried to bar cities from owning or operating such networks. Those threatened by these new trends supported state legislation to outlaw public wireless networks, Not sitting idle amid the growing interest among consumer advocates and assertive public officials, incumbent telcos and cable companies got busy in 2004 and 2005 and challenged municipal activist trends that promoted public broadband networks. Many debated the role of the public sector when it came to telecommunications, with some challenging whether public had a role at all.

Amid the debate over the role of the public sector, the challenges inherent in the technology and business model continued, but a combination of lots of investment capital, market opportunism and competitive dynamics drove the industry hype. While early success in campus wireless deployments made sense for Wi Fi Mesh technology, and early stage small city deployments showed much promise, the siren song of larger and larger deployments proved irresistible to equipment vendors, service providers and city leaders, and that's the primary direction the market took, for better or worse. They fed off of each other and the Hype Cycle was off and running.

Private sector service providers like EarthLink, MobilePro, and MetroFi worked with equipment pioneers to outdo their competitors in meeting and exceeding the desires of the pioneer cities and aggressive public officials.

Don't we all just love Monday Morning quarterbacking? It's not hard to see how this happened, certainly, in hindsight. And I don't fault any of them, as a matter of fact. These guys were engaged in pushing out the envelope, and I knew many of the players personally. I saw very few hucksters, although there were a few, no doubt. The industry drew mostly honest, interesting, curious and brave entrepreneurs, from what I could see. It was and still is a very talented group of individuals who toiled to execute on a vision that was not always clear - somewhat cloudy, if you will (sorry, the puns just keep on coming).

Even as I supported those pioneers on both the private and public side who sought to change the world and make a difference, I wrote a lot about the developing industry here on these pages, continuing to suggest alternatives to the conventional wisdom and prevailing sentiment regarding big city deployments and free wireless access. Often it felt a little lonely, as it seemed that my prescription of multiple small projects and experimentation was far less sexy and interesting than the big city projects that got the attention of the Wall Street Journals and the New York Times. I urge you then to go back and browse the many essays and articles on this site. Check out some of the alternative approaches outlined on these pages. I hope it offers some solace to the negative articles you are likely to read over the coming days, because these events are newsworthy.

For a start, here's a slide deck I offered up at a PTI Seminar in September 2005, nearly two years ago, along with the accompanying white paper. I was asked to opine on the "Future of Community Broadband .. Why? How?" While I talked about municipal broadband networks, keep in mind that they may easily come in a different package than the citywide networks that were in vogue back then. A lot can still be accomplished with smaller, more focused networks that come with a sustainable business model, and the projections I made two years ago still hold.

It was a fun time, and I think the ideas from two years ago are especially relevant in light of recent events. I haven't looked at those slides in a while. What's compelling to me is that none of the fundamental dynamics that supported my projections have changed. All that has changed with recent developments is that the Large City Networks Lead model has been severely challenged. I never thought that it made sense to put all one's eggs into one basket. After all, we know that portfolio theory says that to manage risk better, you invest in lots of small risks and then count on a collective success over a broad base of experimentation. We just took a wrong path, IMHO, and now we are correcting.

I think such perspective gathering and a return to fundamentals and reality should offer us all hope for the future, and that's where I hope we begin to focus, on what we can do, rather than putting our energies into lamenting what we have lost, when in fact, we never really had it to begin with. It was a vision of what could be, a chimera. Even if it had continued further, it was never sustainable to expect a company to continue giving free access to cities and citizens. The costs had to be recovered, somehow.

When it comes to the prospects for Municipal Wireless and Metropolitan Broadband, let me offer up a continuing message of hope, because I truly do believe that the best is yet to come, still, despite the current set backs, and those that are sure to follow in days to come. The fundamental dynamics that support alternative wireless broadband approaches are still there. They promise success, amid the rubble, for those that keep an open mind and get down to business. Let's pick out the winners from the losers, make plans, and get back to work. We owe ourselves nothing less.

Posted on August 29, 2007 at 11:03 AM | Comments (0)

From Innovation to Interest to Enthusiasm to Hype

While I'm in this introspective vein, let's reflect on my experience since I started in this industry in June 2003. I'll try to map out this cycle, because my entry as a wireless entrepreneur pretty closely tracks the start of this roughly four-year old Municipal Wireless industry - what I call by the broader term Metropolitan Broadband. (I suspect this analysis will prove a little long for one article, so I'll likely chop it up a bit into more postings as it comes together.)

1. "Technology Trigger"
The first phase of a Hype Cycle is the "technology trigger" or breakthrough,
product launch or other event that generates significant press and interest.

According to Wikipedia, the original 802.11 standard was passed in 1997, then amended in 1999 to create the 802.11a and 802.11b standards, which led to a steadily declining price for chip sets.

That same year, several of the technology companies that had worked on the technical standards formed the Wireless Ethernet Compatibility Alliance (WECA) and branded the new technology Wi-Fi. In 2003, they changed the name to the Wi Fi Alliance and moved their global headquarters to Austin. This marketing innovation accelerated the impact that the technology innovation would have.

I first saw Wi Fi in conference rooms on the Dell campus in 2002. As a vendor representative, I would be busy looking for an outlet to plug my laptop in, while the Dell staff had Wi Fi laptops they could take from cube to conference room and back. "One day, I'll have to get a wireless laptop," I thought, not without some envy. That day came the following spring, when I left my corporate job to go out on my own. With a new Dell laptop, and a slide-in 802.11b network card, I was active on the coffee shop circuit, talking to angels and VCs. So I could gain Internet access from my living room - big improvement, since that was also my office at the time; but also, I could get online wherever I could find a Hot Spot. And in Summer 2003, they were popping up all over Austin. I had gone from Innovation to Interest, and it had affected me at a personal level. This was an intriguing development.

The innovation of Wi Fi was first manifest in business campus environments like the Dell campus, and residences, then later in coffee shops, led by T-Mobile and Starbucks, and in hotels and motels, where companies like Wayport were busy deploying and managing Wi Fi. But these early deployments all charged users for access, and in Austin, paying for access was considered well, not very bright, unless you had the corporate credit card, because there was a budding social movement afoot to make free Wi Fi ubiquitous, and it was working. God Bless Austin. As a broke entrepreneur, I took advantage of free coffee shops as I researched the wireless industry.

Here a pause, because in hind sight, this tying together of "free" and "Wi Fi" proved to promote more and more hype. "Imagine a world, where broadband access was available by radio through the air, wherever you were, and it was so cheap that it could - no, make that should - be given away for free!" These were the seeds that would lead to the move into the Hype Cycle, being sown way back in the early days.

It was all about hot spot proliferation back in 2003, but there was a small group busy working on a broader vision of mesh networks and outdoor access using unlicensed spectrum. More on that later.

This Economist Case Study on Wi Fi from 2004 is a good starting point to understand how we got so excited about Wi Fi to begin with. Wi Fi was refreshing and new, and its popularity took everyone a little bit by surprise. So when I started my company in Summer 2003, without a clear idea of where it would take me, I just knew that Wi Fi changed the rules and would lead to disruption. I had moved from Interest to Enthusiasm.

No matter how many business plans I put together, I couldn't get the Hot Spot model to work, and I turned my attention to Rural Broadband, electric utilities, and municipalities. In that direction I was convinced there was compelling need, a sense of urgency, and the potential for a paying customer.

Originally designed for indoor use, Wi Fi became even more intriguing when it was first put out in an outdoor environment. Wi Fi Mesh startups like Tropos , BelAir , Strix and SkyPilot sprung up like mushrooms in the forest after a good rain, and proceeded to gain early attention when they deployed Wi Fi outdoors using meshing software that would allow the technology to cover broad areas outdoors - without a spectrum license! Here was more fuel for the Hype Cycle, as equipment companies received funding and had a short time to get out and make things happen.

I remember well the event put on by PTI, Tropos, and the City of Corpus Christi back in October 2004. These were true pioneers. At the time, I was consulting with Austin Energy, and we were looking into new broadband communication technologies to support innovation and efficiencies inside the $1 Billion public electric utility. Whether it was Wi Fi, preWi MAX, or BPL, we were interested in understanding how we could use such technologies to run a more efficient electric utility. Our visit to Corpus was enlightening and gave me an early view of where this technology could go. And I also met the Tropos crew, who gave me keen insights into how their technology was being deployed in small deployments, and would soon be deployed city-wide, like in Corpus Christi, Oklahoma City, and it was hoped, Philadelphia.

But all was not rosy, especially with the challenge this new approach posed to existing interests and conceptions about the role of the public sector in telecommunications. November 2004 was a watershed time in this new industry, as the City of Philadelphia made clear its plans to build a citywide data network using Wi Fi Mesh. Also from November 2004, this article - Why Ask Wi? The Wired City in History questioned San Francisco Mayor Gavin Newsom's foray into municipal wireless and captures the mood of the time.

In response to pioneer mayors, not just in Philadelphia and San Francisco but also in Chicago, Houston, and elsewhere, who expressed keen interest in getting a "free" deal on wireless broadband infrastructure, a cadre of equipment vendors and service providers, such as Earthlink and MetroFi, lined up to grab business. Could these mayors and CIOs strike a deal with a willing service provider?

As a non-facilities based ISP, Earthlink was highly motivated to find a broadband infrastructure solution. Other start ups were eager to execute on the vision of the pioneer public servants, and there you have it - for all the right reasons, a series of rational decisions was leading to an irrational conclusion: we were moving from Enthusiasm to Hype. The focus of the market and all the excitement seemed to be sucked up by the big city deployments, and the potential for $100 million deals.

The competitive market drives the process, and I'm not sure it can be avoided. In a few short years, we had gone from Innovation to Interest to Enthusiasm to Hype. These were smart people, willing to take risks and make things happen. I wrote a blog last year defending these pioneers, friends of mine Are Boosters Liars? No, They're Pioneers and We Need Them. If you check this out, note that even then I was commenting on misgivings I had with market direction, even while praising the pioneers.

I've often wondered if MetroNetIQ was a part of the Hype. Maybe a little. One man's "hype" is another man's "marketing." But I'll show in the next blog how my vision of smaller deals and application orientation has consistently been somewhat apart from the hype of large deals and free Wi Fi.

It's a fascinating tale, how so many players - the equipment makers, the service providers, the government officials, the consultants, the press, and the public - worked independently without a shared script, to create an environment that we can now label a Hype Cycle. For those in the middle of it, it has at times seemed like a tornado - you could not ignore this whirlwind and still participate if you were a part of this industry, and you certainly couldn't stop it. You could either choose to play or sit out. Wisdom of the Crowds, indeed.

So, as they say, "Hindsight is 20/20." Next up is a closer examination of Hype and my challenge that it may not be seen only in a pejorative light: The Bright Side of Hype, if you will, as only an optimist like me could paint it.

Posted on August 28, 2007 at 04:13 PM | Comments (0)

Looking up from the Trough of Disillusionment

It's been a long summer hiatus - ages since I posted. I've been busy, and frankly, needed to take a little time off to regenerate. It's good to be back.

And this is what I come back to - Earthlink, pulling out of Houston??? - This Houston Chronicle article from a week ago cites Earthlink's lack of progress, and the potential for a lawsuit from the City of Houston. Can it be?? There's a lot more where this comes from. But more on that later. (I'm not panicking, not by a long shot).

How can I read recent posts like Glenn Fleishman's Wi-Fi Networking News (scroll down and see especially August 15 Metro Round-Up: Flounder for Breakfast; SF's Bottoms-Up Network; Long Island Select Provider; Short Delays in Minneapolis, St. Louis Park; August 17 Counterpoint to Muni-Fail: Outside Out, Not Outside In; and August 18 Future of Houston's EarthLink Network Unclear; and August 23 Alexandria, Arlington, Virg., on Hold While EarthLink Ponders for a good review of current events) and not conclude that Something Major is going on in the industry. My argument is that we're entering Phase Three of Gartner's Hype Cycle, which I'll explore herein, and in later posts.

The past two months have been an introspective time for me, and busy on the work front as well. I just turned 50 a few weeks back, and so did my wife yesterday. We took a long holiday break - a family car trip to Washington DC, Colonial Williamsburg, the Biltmore Mansion in Asheville, NC; and New Orleans. I'm happy to say that despite all the activity and closed quarters over nearly 4,000 miles of highway, no limbs were lost, no egos were bruised, no kids were given away, and our marriage is still intact. In fact, it was a lot of fun, and refreshing at the same time it was exhausting (hold it, is that possible?) OK - mentally refreshing, physically exhausting. A side benefit of the trip was even more food for thought, and time to contemplate - our nation has been through harder times than now, and they're still struggling in a mighty way in the Big Easy.

So this has been an introspective summer for me, and it provides a good backdrop for these dramatic times in the municipal wireless industry, more on that in a bit.

Like all of you, I've had high points and low points in my life. And no doubt like all of you, I prefer the high points. But that's what life is, whether it's business life or personal life - a series of peaks and valleys. The key to success (and happiness), IMHO, is knowing when you're in a peak or valley, and taking it in stride, anticipating the next peak (or valley).

I'm happy to report that while I'm not standing on a peak at this particular morment, I'm sure not down in a trough either - in fact, I believe that I'm heading into a peak. Things are going relatively well. At this stage in life, it's fascinating to look back with a little perspective, and it's a valuable exercise to identify some touch points for going forward for the next 50 years - I'm an optimist, after all. Hopefully, I can learn a few lessons and avoid some of the hard knocks I took along the way. While each of my physical, mental, and emotional scars has its own story and each was well earned, that doesn't mean that things were necessarily pleasant at the time. Wounds may turn into scars over time, but they still sting on point of contact. And when wounded, its so easy to lose perspective and think one's world is crashing down around one.

So, let me say, "Thank God for perspective" - as the saying goes, "Time heals all wounds." (Not to mention its corollary, "Time wounds all heels.")

So, how does this rambling set of thoughts apply to what we're seeing in the municipal wireless field? As recent press articles like this one in Business Week (Why Wi-Fi Networks Are Floundering) challenge the validity of Muni Wi Fi, I'd suggest that it's time for a little introspection on this front as well.

Bottom Line for me is that I view recent events as more of a return to reality, and yet another step forward in the Hype Cycle (see below). While I'm happy to report that in my personal life, I'm heading up another peak, I'm afraid that we are moving into a valley in the municipal wireless industry. Thus the title of this post, "Looking up from the Trough of Disillusionment").

So, given all this depressing news, I think a pause to look back at how far we've come and where we currently are in the metropolitan broadband industry will help put some of the more alarmist opinions in perspective.

I feel a need to sort things out right now, as I get accosted by some op eds on the Internet, and helpful "friends" and colleagues forward such articles on to me, telling me "I told you so," "Wi Fi sucks," "cities don't belong in telecom" and other versions of that familiar refrain. Well, my sole reply has been and will continue to be: "Your conclusions are premature. It's still way to early in this story to draw the curtains."

Fortunately, Gartner provides a valuable tool to support such a conclusion, and to help in a more objective evaluation. They've named their tool the Hype Cycle - this link offers a helpful list that summarizes the stages of the Hype Cycle. Suffice to say that we've all seen this cycle before, and here we go again, in our little industry.

As you review the list below, see if you agree with my conclusion that we're moving into a new phase now. And that we have a lot more ahead of us, promising more excitement, if a different kind of excitement. See my application of the Hype Cycle, below and in the next few posts.

What are the 5 phases of a Hype Cycle?

1. "Technology Trigger"
The first phase of a Hype Cycle is the "technology trigger" or breakthrough, product launch or other event that generates significant press and interest.

2. "Peak of Inflated Expectations"
In the next phase, a frenzy of publicity typically generates over-enthusiasm and unrealistic expectations. There may be some successful applications of a technology, but there are typically more failures.

3. "Trough of Disillusionment"
Technologies enter the "trough of disillusionment" because they fail to meet expectations and quickly become unfashionable. Consequently, the press usually abandons the topic and the technology.

4. "Slope of Enlightenment"
Although the press may have stopped covering the technology, some businesses continue through the "slope of enlightenment" and experiment to understand the benefits and practical application of the technology.

5. "Plateau of Productivity"
A technology reaches the "plateau of productivity" as the benefits of it become widely demonstrated and accepted. The technology becomes increasingly stable and evolves in second and third generations. The final height of the plateau varies according to whether the technology is broadly applicable or benefits only a niche market.

Clearly, these Wi Fi Mesh networks have failed to meet expectations, which some believe the fault of the technology and the business models, while I prefer to say the expectations were flawed to begin with. Sit back and watch press coverage continue to track this retrenchment, and watch conventional wisdom-based pundits comment that the whole thing was flawed from the beginning. And then watch a rebirth over the next year, out in the trenches, and hopefully, out of the spotlight and early stage hype that all these large city deployments have generated.

In the next few posts, I'll track how I think we got here, building the case to show that the industry is not going to dry up and blow away, and in fact, these may be positive developments we're seeing, only the beginning of a new phase in the industry...

Posted on August 27, 2007 at 11:37 AM | Comments (0)