Sunday, January 29, 2006

The Business Case for Silicon Valley’s Muni WiFi Network

Friday's announcement of a Silicon Valley-wide municipal broadband network is definitely an expanded vision of muni WiFi, though Morrow County, Oregon (cited in the book) represents an actual deployment of similar size. The states of Rhode Island, similar in size to the Valley, and Maine plan equally bold border-to-border WiFi infrastructure deployments.

The most common questions in coverage of the Valley announcement were “what’s the business case?” and “how are they going to do it?” Today I tackle the business case. Wednesday I’ll have a go at the “how” challenge.

The most direct ROI can result from cities and counties using the network to wireless-enable mobile government workforces, mobile physical assets and buildings. This ROI not only can justify many times over any money that governments contribute to the effort, but also can be used to drive the network’s use for social and economic development programs.

At the tip of the ROI iceberg, every government has several departments similar to Philly’s License and Inspections that can save an hour or more per worker a day by replacing paper-driven taks with wireless apps. Instead of wasting time going back and forth to the office to pick up, complete and get new paper forms, workers in the field gather, process and access data faster, accurately and more efficiently. Wireless access to resources also lets them make more and better decisions while in the field.

Taking the task audit proscribed in “Fighting the Good Fight for Municipal Wireless” uncovers a range of government operations involving mobile and office workers that can be streamlined or eliminated with wireless. Besides the productivity ROI, muni WiFi does this at faster data speeds and for significantly less money than carrier data wireless services.

The ROI of covering your assets

Every city and county owns a staggering number of mobile assets that it must track, access and manage. Everything from vehicles to office, emergency and repair equipment. It’s proven that wireless asset tracking and giving workers mobile asset management apps produce millions in ROI through theft or loss prevention plus more productive use of assets and the people who maintain them.

Cities such as Houston and Corpus Christi have also realized that wireless asset management also increases revenues. Using the technology for automated meter reading for city-run utilities and operating smart parking meters are just two areas where cities can collect more money faster and with greater efficiency.

Then we have the most glaring deficiency in emergency response operations. The lack of communication technology interoperability between departments and agencies that respond to a major crisis, both in the immediate aftermath and in the months following, causes much suffering. Muni WiFi, appropriately planned and implemented, will save lives and alleviate a lot of unnecessary misery. After Katrina hit, what technology was back online first, making a difference?

Closing the divide

Shifting to social issues such as the digital divide, which is surprisingly prevalent in parts of Silicon Valley, muni WiFi is a potent tool that produces ROI of a different sort. Cities and their stakeholders can use it to deliver programs that close the divide while making disadvantage citizens more productive members of society.

Look at what groups in Philly such as the Norris Square Civic Association, the People’s Emergency Center and Lutheran Children and Family Services did during just the pilot project phase of muni WiFi deployment. Here you start to see the potential. These groups are using technology, content and programs that leverage the network to close the divide.

The Philly School District already used their own WiFi networks to deliver nationally-recognized innovative education programs that raised the quality of education for kids of all economic strata. Now the District plans to help the city use its WiFi network to bring parents directly into these programs as partners in their children’s education.

Improving your business communities

On the economic development side, this network will create additional ROI. Review my previous post on the business impact of muni WiFi to see some of the general business impact. But wait, there’s more!

In the Valley you also have an ecosystem of startups, established technology powerhouses, venture capitalists and a plethora of supporting businesses and services. This ecosystem functions on the power of business networking, both within itself and with other parts of the country and the world.

Can you imagine what happens when you weave this networking dynamic into a high-speed, low-cost WiFi network that facilitates not only people-to-people interaction, but also machine-to-machine and machine-to-people? Think about all those creative business and technology minds down there once they start considering the possibilities.

I always laugh when I hear some incumbent telco or cable company whine about how these networks are going to stifle innovation. First off, if you have more billions than anyone except maybe Bill Gates and you can’t be innovative in the face of a $5000 WiFi transmitter, you deserve to be put out of business. But you watch the Valley. They’re going to show you some innovation with WiFi that rocks the free market world.

Thursday, January 26, 2006

Local Business Support of Muni WiFi Is No Surprise

One under-reported aspect of municipal wireless is that cities’ initiatives, if planned and managed properly, can significantly impact area businesses, and not just those hosting Internet cafes.

In a survey reported in today’s Herald Sun, nearly 70% of responding downtown businesses “are interested in some form of a municipal wireless network the town might help create.” U of North Carolina researcher Shannon Schelin who conducted the survey with the Chapel Hill Downtown Partnership said "That really did surprise me. I didn't expect a number quite that high."

We shouldn’t be surprised. Here’s what citywide affordable WiFi means to businesses.

Small businesses with 15 – 20 workers, and even larger workforces, who are mobile within a city will seriously consider mobile applications. Once they don’t have to spend $60- $80 for slow, sometimes spotty cellular data network services, but can get true high-speed wireless access, they can leverage mobile technology to compete more aggressively with larger companies. Application Service Providers (ASPs) with Web-hosted software will drive costs for mobilizing workers even lower.

Messenger services, companies that provide home and office delivery, repair and maintenance companies, professional service firms and contractors can reap the benefits of wireless dispatch, time tracking, group calendar management, etc.

Asset management will be more practical and affordable for businesses. Vehicle tracking, construction equipment security and remote monitoring can tap into this less expensive WiFi option. Firms with warehouses, manufacturing plants and shipping docks won’t have to build a complete WiFi or RFID infrastructure, just tap into the city network.

If cities deploy business portals over the network, such as Philly did with The Cloud from Pervasive Services, local retailers, museums and food establishments are some of the businesses that can see revenue increases. The Cloud lets them create content and special promos that are accessed by, or pushed out to, tourists and locals. The Cloud also can be integrated with festivals, concerts and other big-crowd events to drive customers into local businesses.

In the outlying areas, muni WiFi represents the best or only way for companies to get high speed Internet access and support a content-rich interactive e-commerce presence. For some home-based and small businesses in disadvantaged areas, the network is an affordable lifeline to potential customer who wouldn’t visit these neighborhoods. A caveat is that local government or some other entity provides the training often required so owners learn how to effectively use the Internet.

If cities and their partners properly market the network to companies, the potential for a change in how consumers buy is huge. With high speed WiFi, local merchants’ ability to use video and audio content to build or strengthen customer relationships makes financial sense. Enabling real-time interactivity and transactions with shoppers on the go boosts the bottom line.

And to address that line favored by the incumbents about no company being willing to trust a public network, consider this. Morrow County, Oregon relies on a 1000-square mile WiFi network with off-the-shelf security software to manage a myriad of monitoring and emergency response resources that keep tabs on the following.

1/3 third of the U.S.’ remaining stockpile of warfare materials, the Hanford Nuclear Reservation, a nuclear power station, a major east-west rail line, a natural gas plant and energy production and distribution facilities are all covered. The network is HIPAA-certified safe so that patient data can be wirelessly transmitted, and it’s FIPS 140-2 compliant. If Morrow County can feel secure in their use of a WiFi network, I’m sure business owners can be assured of a good night’s sleep while using their city’s network.

It’s safe to say that businesses, regardless of industry, are going to embrace municipal wireless, and be the better for it. As the article today concludes “Schelin said there weren't any clear factors, such as the age of the business or the ages of the clients the business targets, that matched up consistently with how the businesses felt about wireless. ‘People who believe wireless is important aren't just people catering to college students, which is a little different from what I expected to find.’

Wednesday, January 11, 2006

10 questions San Franciscans need to ask about that RFP

There seems to be quite the dust up in San Francisco over the RFP for a WiFi network, and from all sides of the political spectrum. The conservative view is the standard free-market arguments about government in the private sector’s business. The heart of the left and moderates argument is that the RFP doesn’t seem complete nor responsive to the needs of the people.

You can read an article and a blog that lay out some specific issues of contention.

Having looked at S.F.’s RFP, re-read Philadelphia’s RFP and knowing the many steps Philadelphia took leading up to their RFP, I believe there are a few vital things missing in the city by the Bay. If groups supporting muni WiFi in San Francisco or any city ask the following questions in the context of the process that Philly followed, many cities would get a better start to their initiatives. Don't imitate every step Philly took. Ask the questions they asked and answer them in a way that best fits your city.

1. Is there a steering committee for this initiative that is reflective of the city?

The mayor of Philadelphia selected an executive steering committee of 15 people representative of various community and business constituencies, and two from the city government. The committee brought in a consultant firm proficient in muni WiFi deployments for guidance. In S.F., the Techconnect review panel has seven members: three from the city, two from the Public Utility Commission, one community rep and the consultant firm Philadelphia retained.

2. Does the steering committee have a deeply thought out, clearly articulated vision of where they think this initiative should go?

Philadelphia’s committee worked together as a group in one session to complete an eight-page workbook in a vision-development exercise. They defined what a wireless network should and shouldn’t be, what services it should deliver to the communities, and worked through 30 values to determine “What values drive the development of this community technology program?”

3. Was there, or is there a plan for, an aggressive needs-analysis process that reflects the diverse city?

The committee conducted 20 extensive focus groups with about 15 people each, and each group represented a key constituency, including ethnic groups, neighborhoods, health care, education and business. Even the incumbents were invited to a focus group, which they declined. Participants were recruited and selected based on their recognized standing (formal or informal) as a leader within their respective constituency. All economic strata of the city were represented.

4. Is there a business plan?

The executive committee, in 90 days and before the RFP was issued, created a 72-page business plan for the wireless initiative. As with any multi-million dollar business venture, the plan included ROI projections, business model analysis, an analysis of best practices, infrastructure definition, stakeholder analysis and plan for marketing the network to the various constituencies.

5. Has there been a technology feasibility study?

For nearly a year before the RFP was issued in Philly, there was a series of “proof of concept” deployments of WiFi networks, spectrum analysis, RF testing and five pilot projects in different parts of the city that each brought together a different set of vendors’ products. S.F. cancelled their plans for a feasibility study.

10 questions San Franciscans need to ask about that RFP (continued)

6. Are there plans to put feet on the street to reach constituent groups to initiate development of community content, tools and activities that maximize the network?

After the business plan was submitted to the mayor, various community relations activities generated upport from neighborhood associations, non-profit and faith-based community service groups, chambers of commerce and tourism groups. Reps from the city built relationships among organizations, as well as between groups and the city, to put economic development and digital divide programs in place. The city hosted several neighborhood pilot launch parties to draw attention to the network and the programs.

7. Is the RFP specific enough and demanding enough to ensure that citizens’ best interests are served?

When reviewing the RFP of each city, I feel Philly’s document asks for vendors to provide a lot more detail than the S.F. RFP does to ensure certain objectives are met. For example, item 2.2.2 in the Philly RFP says “Respondents must define in their Proposals a preliminary architecture for the System as well as the services to conduct a more thorough and detailed design for the System.” Then it lists 11 points that must be addressed. Of course, if you do all of the preliminary work Philly did, you can be more demanding in an RFP.

8. Are there requirements to make sure the network infrastructure doesn’t become obsolete?

This might seem like a nit to pick, but Philadelphia requested (item 2.2.6) “a detailed plan for how and when this technology refresh process will occur during the contract term.” They also specify that upgrades be backward compatible, request that vendors’ product roadmaps reflect the intended upgrade plan and expect for the entire network infrastructure to be replaced through refreshes in the course of seven years.

S.F. appears to be more relaxed on this point, asking bidders to explain how they will determine during the course of the contract when and how upgrades are to be done. I bring this issue up because technology obsolescence can kill your network or cost a fortune to overcome if you don’t plan appropriately for it. Like other points in the S.F. RFP, it seems like they’re touching the right bases, but not carefully enough to ensure citizens don’t get screwed later.

9. Is a proof of concept required?

In Philly, the winning vendor is required (item 2.3) to build a 15-square mile proof of concept network that will operate for three months and be “sufficient to demonstrate the functionality and viability of the recommended solution.” Seems to be a prudent move since it’s better to know early if there are major issues to resolve then rather than after the other 120 square miles have been built out.

10. Does someone have the political will to put the brakes on something that might not be a great idea?

Whatever you want to say about the Philadelphia initiative, the people driving the process showed a willingness to slow down, revise, re-write or whatever was necessary to get the job done right. If you look at some of the dissent about the S.F. project, it’s about too few people making key decisions who aren’t plugged in enough with citizens. Even though the RFP calls for this network to be build for free, everything comes with a price, often paid by those citizens. Citizens are saying they want to see enough to know enough so they can determine if this RFP is a good idea. And they want it changed if it isn’t good.

Bottom line. Many cities are racing to be one of the first with muni WiFi deployments. They see what Philly is doing and they want to be part of that. When you look at these first couple of cities that are deploying, you see the political fights, the early network build outs and the first couple of failures. What you don’t see is all of the preliminary work that went into (or should have gone into) these launches.

It’s a staggering job to do this muni WiFi thing right. Yet with the stakes being what they are, don’t you owe it to your city to ask these important 10 questions, with an understanding of how these pioneering cities addressed the issues?

Tuesday, January 03, 2006

Shifting the municipal WiFi discussion in 2006

One particular piece of logic keeps floating to the top of my brain as I watch cities announce muni WiFi initiatives and telcos denounce them. It’s logic that needs to start driving the discussion in cities planning or launching their initiatives.

Aside from its representative body, city government is a business operation. In many places, a multi-million or multi-billion dollar operation. Looking at it further, cities are similar in three distinct ways to companies that have many acres of land they use for large warehouses, shipping docks, manufacturing plants or office campuses.
  1. Hundreds, if not thousands, of employees are mostly mobile in a city’s place of business – the streets within its geographical boundaries;
  2. there’s a huge number of physical assets such as emergency equipment, vehicles and building structures that cities spend a lot of money to track, retrieve and maintain; and
  3. they have, or can negotiate, access to vertical assets upon which can hang the infrastructure for an effective WiFi network.

Businesses figured out that the cost of a WiFi network pays for itself many times over through the decreased costs plus increased efficiency and productivity that comes from wireless asset maintenance and on-site employees using mobile applications. And none of these companies would even dream of spending truckloads of money for wireless data services when they own the wireless network employees on their premises are using.

Governments. Start thinking like a business! Put the discussion about providing wireless public access on the back burner for a month. Spend that time building the business case for using your vertical assets to deploy WiFi so you better manage your human and physical assets.

What you’ll likely discover is the following.

You’ll make back the money you invest within two years or sooner from the resulting cost cutting and productivity improvements. Factor in the money you won’t spend for carrier data service and ROI is quicker. Everything after that is major financial surplus. This stops all the yammering about cities not being able to make money with the network, WiFi networks are boondoggles, etc., etc.

You probably won’t have to tap into tax revenues to build the network. Build it using either capital funds, bonds or be creative and have an ISP or vendor build it. This gets you past arguments about using the taxpayers’ money. Sure, telephone poles belong to the citizens, but they’re getting more efficient government in exchange for pole space they aren’t using anyway. Hardly seems like an impeachable offense.

You can use the money you save by cutting costs and running a more efficient business operation to run social programs, spur economic development or find other ways to give citizens more value for their tax dollar. You (a.k.a. the citizens) own the infrastructure, so do with it as the citizens deem fit.

If you want to provide public access, either for the social programs or because you feel it’s a good thing to do, bring in a third party to run and manage it. No matter how much the telcos bluster about you competing unfairly against them, public/private partnerships for the greater public good are as much a staple of American government as lobbyists and billion-dollar tax subsidies. Also, since the network’s ROI is coming from improved government operations, the city has minor financial risk with the public access service.

Bottom line. Think like a business. Use WiFi to run a better government operation. Neutralize opposition to muni WiFi. Then ponder public access.