[1st-mile-nm] Plan For Internet Service Fizzles

[peter]

Sunday, October 7, 2007

Plan For Internet Service Fizzles

By Rosalie Rayburn <http://www.abqjournal.com/cgi-bin/email_reporter.pl>
Journal Staff Writer
    A bold initiative to use cutting edge technology to bring free 
wireless Internet service to Rio Rancho was once hailed as visionary.
    But the vision ended last month when city officials sent a letter to 
wireless company Azulstar, terminating its contract to provide the service.
    According to the letter, Azulstar failed to pay electricity charges, 
provide a satisfactory business plan and proof of its financial ability 
to offer continued service.
    Azulstar signed the 25-year contract with the city in October 2004 
to operate a wireless network on city property and rights of way. In 
return, it offered a limited-time free Internet service to residents of 
Rio Rancho.
    The termination followed months of negotiations and threats by the 
city to dump Azulstar over complaints of poor service, lack of customer 
support and unpaid electric bills.
    City officials initially championed the network's benefits, although 
the city didn't invest money in the project.
    But Azulstar's network never really got off the ground--- subscriber 
numbers were small, and the seeds of the problems that eventually ended 
Rio Rancho's municipal wi-fi experiment were there early on.
    A contract with Usurf, another company hired to build the wi-fi 
network ended abruptly after the corporation that bought Usurf said the 
project no longer fit its business model. City officials then chose 
Azulstar.
    Shortly after the city signed the deal, a communications expert 
warned them of severe technical and financial drawbacks in Azulstar's 
proposal for Rio Rancho.
    But the possible benefits of the project and its kudos value for 
making Rio Rancho one of the first cities to have a wi-fi network 
appeared to outweigh the warnings.
    "The way we crafted it, the city had nothing to lose," former City 
Manager Jim Palenick told the Journal in a phone interview on Friday.
    According to Palenick, Intel proposed the wireless project to city 
officials and helped find a wireless provider. They picked Azulstar 
because it had experience creating a municipal network in Grand Haven, 
Mich. He said the city didn't invest any money in the project and the 
contract simply allowed Azulstar to use city rights of way.
    Unlike the Sandoval County Broadband project, which is using public 
money to fund a countywide-wireless network, Azulstar built its network 
using about $1.5 million raised from private investors, he said.
    City officials and Intel touted the wi-fi network as a catalyst to 
spur economic development.
    A USA Today article in 2004 quoted Terry McDermott of Intel talking 
about the advantages of having a wi-fi network saying, "You could bring 
your company to Rio Rancho and you don't have to worry about the 
infrastructure needs that you normally would have by rewiring or going 
into an old building."
    Announcing the deal with Azulstar, then-Mayor Jim Owen, a former 
Intel site manager, said, "City-wide wi-fi will enhance the way people 
work, play and live in our rapidly growing city."
    For residential customers, Azulstar's plan offered one hour of free 
service daily. Monthly subscriptions started at $14.95. Company founder 
Tyler Van Houwelingen claimed he had 2,500 free service and paying 
customers when Rio Rancho terminated his contract.
    Soon after service began in 2005, city officials began hearing 
complaints from customers about inconsistent service.
    Communications consultant Peter Baston of Santa Fe-based Ideas Inc. 
told the Journal recently that he warned Palenick and city councilors 
that Azulstar's wi-fi Internet signals would not penetrate through the 
stucco-and-chicken wire materials used in most Rio Rancho homes.
    In a phone interview on Friday, Van Houwelingen admitted he 
underestimated the stucco-and-chicken wire problem. Azulstar's 
experience was with brick or frame and siding homes in Michigan, he said.
    Baston also warned about Internet service competition from Qwest and 
Cable One. He urged the city to invest in a fiber optic cable network.
    Palenick said in his interview that he didn't recall any 
communications with Baston.
    "Numbers at the beginning looked good," Palenick said.
    He said Azulstar believed it would get a private subscriber base 
that would make the service economically viable. Many other cities that 
have tried similar experiments have found they can't survive with 
residential subscribers only, Palenick said.
    Van Houwelingen said he proposed new technology to overcome the 
service quality problems, but the city declined. He is now building a 
system using that technology in Miami Beach, Fla. The Miami Beach police 
force is the primary customer, but residents will also be able to use 
part of the network, van Houwelingen said.
-- 

Peter Baston

*IDEAS*

/www.ideapete.com/ <http://www.ideapete.com/>

3210 La Paz Lane

Santa Fe, NM 87507

/Albuquerque// Office: 505-890-9649/

/Santa Fe// Office: 505-629-4227/

/Cell: 505-690-3627/

/Fax: 866-642-8918/

/_Mailto:pete at ideapete.com <mailto:pete at ideapete.com>_/

 

 

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://www2.dcn.org/pipermail/1st-mile-nm/attachments/20071012/6ef765d5/attachment.html>