Santa Clara ready for wireless: MetroFi to finish one of largest Wi-Fi networks in nation

[Dr. Richard C. Cassin-2]

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  Santa Clara ready for wireless
  MetroFi to finish one of largest Wi-Fi networks in nation
  Todd Wallack, Chronicle Staff Writer
  Monday, April 19, 2004
  ?2004 San Francisco Chronicle | Feedback | FAQ


  URL: sfgate.com/cgi-bin/article.cgi?file=/c/a/2004/04/19/BUGH865P5M1.DTL



  The Bay Area is peppered with Wi-Fi hot spots: SBC Park, Union Square,
countless hotels and cafes. Some even cover several blocks.

  But now a Mountain View startup plans to connect an entire city with the
wireless Internet equipment, allowing anyone in the city limits of Santa
Clara to surf the Net at lightning fast speeds for $20 to $30 per month.

  MetroFi Inc., which has kept a low profile until now, plans to begin
service in half the city, including most of the city's 40,000 homes, by this
summer and finish the 20-square-mile network later this year -- making it
one of the largest public Wi-Fi networks in the country.

  "We're basically changing the landscape,'' said Chuck Haas, MetroFi's CEO
and co-founder, who is already well known in Silicon Valley for helping to
start Covad Communications, a DSL Internet provider based in Santa Clara
that survived the dot-com bust.

  A handful of other small communities already have citywide networks, but
the concept is still new. Syndeo Group recently installed a Wi-Fi network
covering 13 square miles in Lafayette, a rural area in Southern Louisiana.
And Aiirmesh Communications is building a wireless network in the Los
Angeles suburb of Cerritos, which has 50,000 residents and measures close to
9 square miles. (San Mateo's Tropos Networks supplied the equipment.)

  The largest such network is in Eastern Oregon, where EZ Wireless of
Hermiston has created a network spanning seven rural towns and 600 square
miles. It is used by emergency crews, businesses and residents.

  Now MetroFi and Aiirmesh are talking about creating similar Wi-Fi
community networks around the country. Aiirmesh says it is in talks with a
number of cities, including some in Northern California. MetroFi says it
plans to build networks similar to the one in Santa Clara in other parts of
the Bay Area.

  "We'll start in our home area first ... and then expand across the
country,'' said Pankaj Shah, another MetroFi co-founder and Covad veteran.

  A number of previous efforts to provide other types of wireless Internet
services ran aground because they proved too expensive and didn't attract
sufficient customers.

  Sprint, for instance, signed up 52,000 customers, including several
thousand in the Bay Area, for its wireless Internet service, called Sprint
Broadband Connect. But it halted its roll-out two years ago.

  Meanwhile, Metricom in San Jose offered a different type of wireless
Internet service, called Ricochet, which relied on radio transmitters atop
light poles. But the company went bankrupt in 2001 after losing several
hundred million dollars trying to roll out the service nationwide.

  In addition, MetroFi faces stiff competition from existing broadband
Internet services in Santa Clara. For instance, Comcast Corp. offers cable
modem service for $46 to $60 per month and SBC Communications sells DSL for
as little as $30 per month, with a one-year contract, plus taxes and fees.
Covad and other smaller firms also offer DSL. (Aiirmesh has an advantage
with its system in Cerritos, since the community currently lacks cable and
DSL service.)

  But MetroFi executives are undaunted.

  Haas pointed out that Sprint used a fixed wireless technology that
required the company to send technicians to install receivers, about the
size of a pizza dish, on customers' roofs -- which drove up the company's
costs and wasn't mobile.

  Metricom's service, meanwhile, was slower (just slightly faster than dial-
up) and relies on the company's own proprietary technology, which took
additional money to develop and maintain.

  By contrast, MetroFi says its roll-out should be significantly cheaper,
since it plans to rely on standard Wi-Fi technology that is already being
used by thousands of customers. (The company declined to name its equipment
supplier.) And it says it can avoid expensive "truck rolls" to customer
homes by shipping customers the equipment -- which looks similar to the
standard Wi-Fi kits available in electronics stores -- to install
themselves. It will also be faster -- more than 1 megabit a second, which is
comparable to DSL.

  Moreover, MetroFi believes it can compete head-to-head with DSL and cable
modem by offering cheaper prices, perhaps as little as $20 per month.

  "The key value proposition is affordability,'' Haas said.

  However, MetroFi said customers will actually sign up for its service
through other Internet service providers, such as Earthlink, so it couldn't
say for sure how much its partners will charge. MetroFi plans to operate the
local network and act as a wholesaler, selling the service to ISPs who in
turn market it to consumers.

  MetroFi executives wouldn't say how much money the system costs or how
much it needs to break even. But Aiirmesh chief technology officer John
Griebling said community Wi-Fi networks typically cost about $100,000 a
square mile to deploy, which would put the Santa Clara network at $2
million. Still, that's one-tenth the cost of building a new DSL or cable
network, making it much more affordable.

  Likewise, MetroFi executives said they wouldn't have received venture
capital funding if the technology was a money-loser. Today, the company
plans to announce that it has received $9 million in early funding from
Sevin Rosen Funds, August Capital, Western Technology Investors and other
individual investors.

  Still, a technology analyst warned that MetroFi and others could run into
problems with interference, since the community Wi-Fi networks must share
the radio spectrum with everything from smaller hot spots in cafes and homes
to baby monitors and door bells.

  "There are definitely problems leveraging an unlicensed frequency to
produce ubiquitous Wi-Fi,'' said Chris Kozup, an analyst for the Meta Group,
a technology research firm. And even where interference isn't a problem, the
Wi- Fi signal doesn't always penetrate walls, making the service
inaccessible inside many homes.

  Griebling conceded interference could be a problem, saying the firm spent
most of its engineering efforts trying to reduce the impact.

  But Haas dismissed the issue, saying several different networks could
normally share the same frequency without problems, since the capacity of
each Wi-Fi channel is larger than most surfers ever need.

  As for the problem of not being able to receive Wi-Fi signals inside a
house? Haas said customers could position the main Wi-Fi receiver near a
window, and then use a home network to relay the Internet connection to the
rest of the home.



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--
  Going Wi-Fi
  MetroFi plans to launch a Wi-Fi network covering the city of Santa Clara
this year, one of the largest public Wi-Fi networks in the country. Other
large public networks include:

  -- Eastern Oregon -- 600 square miles and seven towns

  -- Lafayette, La. -- 13 square miles

  -- Cerritos, near Los Angeles -- 8.9 square miles

  -- Half Moon Bay -- downtown

  -- Baton Rouge, La. -- downtown

  -- Cleveland, University Circle area

  -- Athens, Ga. -- downtown

  Source: Chronicle research

  E-mail Todd Wallack at [hidden email].

  ?2004 San Francisco Chronicle | Feedback | FAQ

    Page D - 1

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