Tempe’s vaunted Wi-Fi system in shambles

Tempe was so proud of its citywide Wireless Internet service that a large framed display of a wireless kickoff ceremony has adorned the entrance to the mayor's office for three years.

Click on the graphic to see how the Wi-Fi system works

But today, a piece of wire from a "wire-cutting" ceremony has become unglued and is falling off the prominent display. It's symbolic of how the city's highly touted wireless network is itself in shambles.

Cities across the nation had barraged Tempe for advice on emulating the city's system, one of the first citywide networks in the U.S. But since the owner of Tempe's network abandoned the system late last year because of a stunning lack of interest, cities are now watching Tempe to see if it can revive the service.

The system is still on, so users can tap into it for free. However, nobody is fixing transmitters that stop working or providing customer service to a few hundred people believed to still be using it in a city of 161,000.

Tempe's model doesn't seem an outright failure even if the city is looking for a new owner for the privately-run network, officials said.

"I still think there's a place for it," said Dave Heck, Tempe's information technology director. "It just needs to fill the right niche."

Tempe and other Wi-Fi experts say they've learned several key lessons from the city's experiment, including:

Wireless networks require a vastly larger upfront investment for transmitters than expected. In Tempe, more than twice as many transmitters were installed beyond initial estimates and the signal still wasn't strong enough to reach inside some homes.

Demand was a fraction of projections. Tempe never signed up more than 1,000 subscribers, about 10 percent of initial estimates.

Modern Valley homes thwart Wi-Fi signals. Stucco houses feature a wire mesh that blocks or weakens Wi-Fi signals, so wireless providers needed to spend more on equipment to boost the signal indoors.

Profits are fraction of what was expected, if there's any profit at all.

These factors doomed many systems that started or kept cities from starting their own Wi-Fi networks.

"I don't think it's a cost-effective model," said Shawn Woolley, Gilbert's technology services director.

Gilbert had signed an agreement with MobilePro Corp. to roll out service in the town, as the corporation had set up service in Tempe and had expanded into about 25 percent of Chandler. MobilePro bought the Tempe system from Gobility, which bought it from Kite Networks.

Nothing was ever built in Gilbert despite promises a couple of years ago. MobilePro had plans to blanket Chandler as well, but stopped after only getting service to about 25 percent of the city.

A few cities across the nation have seen success, but often only after taxpayer dollars subsidized the systems. Tempe and other Valley cities left most costs to the private investors, so failures are a burden to those investors.

Wi-Fi technology may make sense in only limited areas, Valley wireless administrators say. The technology is attractive to users in parks, municipal buildings and other places where lots of people gather. Future Wi-Fi networks may include only those areas and not subdivisions where homeowners have wired connections or use wireless cards, experts say, adding that public demand in neighborhoods is too low to make a profit.

But they agreed cities should provide limited areas and look to try a wireless service called Wi-Max, which could prove far cheaper and more reliable because it requires fewer transmitters, said Alex Dushuk, a technology manager for Mesa who had consulted on Tempe's Wi-Fi network. He expects that future large-scale wireless efforts will use the Wi-Max approach.

"I think that's where the technology is heading," Dushuk said.

The upside is Tempe and other Valley cities didn't spend taxpayer dollars.

Tempe Mayor Hugh Hallman argues that any failures aren't a burden to Tempe. The existing transmitters are worth more installed than if they're removed, he said, which means another company is likely to buy the network and re-invigorate it.

"The experiment is far from over," Hallman said. "But it's teaching a lot of other cities and a whole lot of other Wi-Fi suppliers about what can and cannot be done."