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Municipal Wi-Fi networks have been suffering from badreception of the political and economic kind lately.
San Francisco illustrated the two sides of the problem aselected officials said they did not like the terms being offered by Earthlinkto set up a network in the city and the internet service provider decided towalk away from the project as its business model led to unsustainable losses inother cities.
A major MuniWireless conference is taking place in SiliconValley this week and its organisers have issued their annual report on thestate of the industry.
While all indicators a year ago were pointing to dramaticgrowth, says Muniwireless, “a year later, a clearer, and, quite frankly, moresober picture has emerged.â€
It estimates 2007 US spending on networks will be $329.4m,down from the $450m it predicted for 2007 a year ago, but still up 35 per centon actual spending in 2006.
Growth rates of between 33 per cent and 48 per cent areforecast between now and 2010, down from the 100 per cent year-over-year growthexpectations of a year ago.
The report blames a number of factors: changes in strategiesfrom a few major cities that delays spending; financial troubles at Earthlink,the most ambitious provider; uncertainty over the right business model; growingpains in deployment and negative press reports causing concern amongcommunities and investors.
However, it highlights a number of more positive factors: counties (compared to cities)accounting for a larger portion of the market; a survey showing people are morepositive about the future of Muniwireless and mixed-use networks becoming the norm, where residential, localgovernment, local business and visitor uses for free or paid access emerge.
Concerns remain though. Survey respondents saidwireless network performance and unclear return-on-investment scenarios werebigger challenges than a year ago.