Why pay for WiFi?

In its current issue, The Economist reports on the failure of municipal WiFi.

[T]he networks that have been completed have attracted few users…America’s biggest network, around Tempe, Arizona, was aiming for 32,000 subscribers, but had only 600 in April 2006 and has not provided figures since.

EarthLink and MetroFi have responded by asking city governments to act as “anchor tenants” and agree to spend a guaranteed sum on the service. Minneapolis and Portland, Oregon, accepted such contracts from the beginning; their Wi-Fi schemes are proceeding relatively smoothly. But most cities have balked at the change. Chicago’s plans foundered when EarthLink and AT&T, the two firms bidding to build its network, demanded anchor-tenant commitments. MetroFi has lost four contracts since April after asking municipalities to subscribe upfront…

CEI’s own Cord Blomquist made this same point in The American a couple of weeks ago, and cited another hazard in cities deploying WiFi:

As municipal Wi-Fi companies become entrenched, we can expect them to not only demand that cities be anchor tenants, but that they help make up for the shortfalls that will inevitably result when new technologies supplant Wi-Fi. Worse, seeking to put off that day of reckoning, they may well ask for regulations stacking the deck in their favor, slowing the spread of the latest and greatest tech.

Of course, as long as there’s electronic pork to be had, expect some Internet companies to keep pushing for municipal WiFi and other such schemes.