On City Lamp Posts

This morning, at the coffee area, I met a friend who was wondering how Google was planning to roll out its proposed free wireless service in San Francisco, and the potential costs for such a roll out.

I suggested that Wi-Fi (W-LAN, Wireless Local Area Network) was primarily connected to the "real estate" business in the following sense.

City governments own property in the city environment and can deploy wireless hubs at these properties.

For example, cities are in the best position to accomplish such Wi-Fi roll outs simply becasue they own lamp posts.

In fact, that's the way most free services are supposed to be deployed:

Google's proposal highlights the potential savings of offering a wireless, citywide link. The company proposes establishing just 20 to 30 access points per square mile in San Francisco. Each is essentially a small inexpensive box, similar to the Wi-Fi gear many consumers have in their homes, which would be mounted on the top of a city lamp post. Installation of one box takes about six minutes, Google said.

The access points connect to each other wirelessly. The whole citywide network would need just a few wired connections to the Internet, Google said. All consumers would need would be Wi-Fi cards, such as those many currently use to access wireless networks, or computers with the capabilities already built in. Under city guidelines, the service would have to be accessible from outdoors in 95% of the city and from indoor locations in at least 90% of the city.

. . . [San Francisco mayor] Newsom has pushed for a free or low-cost wireless high-speed Internet offering in San Francisco partly as a way to extend access to low-income residents.

Jesse Drucker, Kevin J. Delaney and Peter Grant, "Google's Wireless Plan Underscores Threat to Telecom," The Wall Street Journal, Monday, Oct. 3, 2005. (Online subscription required.)

Same report contains interesting information regarding free Internet in Europe:

In Europe, KPN NV of the Netherlands recently said that the number of minutes the Dutch spend on free Internet chatting now exceeds the roughly 12 billion minutes the country's inhabitants annually spend on the traditional phone. The threat of the Internet is one of several factors forcing the European telecom sector there to consider consolidation.

(There are reports today in the FT that Telefonica SA of Spain may buy KPN.)

In general, in the U.S., operators have used regulatory pressures to resist city government contracts for city-wide deployment of W-LAN, reports the WSJ.

WSJ also compares Google's market valuation (about $80 billion) with that of Verizon (about $90 billion). A more appropriate evaluative comparison might have been that of Google w/ Skype ($2 - $4 billion based on its sale price to eBay). Skype, at the time of its sale, had about 50 million registered users. How many Google users are registered?

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