Analyzing the Mesh Alternative
by Edward Naef, Vice President
Telephony Magazine, March 20, 2006

In the effort to make high-speed access available to more people in more places, "Municipal WiFi" networks using Meshed WiFi technology are gaining traction in the United States. Currently Philadelphia has announced details of its planned partnership with Earthlink and numerous other cities such as San Francisco and Boston are seriously considering similar initiatives.

Meshed WiFi's promise is widely available broadband at low cost: estimates suggest that a large metro area can be covered for tens of millions of dollars, a bargain in the context of wide-area networking. Since most PCs and laptops today already have WiFi chips, no new CPE would be required, eliminating additional end-user device costs. Service speeds of up to 50 Mbps would in theory be attainable, with unlimited scalability and little network management. On the surface, it sounds like an ideal proposition.

We at CSMG have evaluated the business case for Meshed WiFi services in some detail and believe that while each situation is unique, there are several key factors that must be fully understood in order to minimize the risk of failure.

First, as with any business case, the attainable market share is a fundamental driver of value. For example, in a city like Philadelphia, with strong cable and RBOC presence, what is a realistic market share for a new high-speed data venture - 5%, 20%, 50%? The ultimate share has a direct impact on the per subscriber revenue that must be attained (either through end-user charge, municipal subsidy or a combination of both).

Second, from a technical perspective, WiFi is widely known as a "first-wall" technology, meaning that coverage within buildings can require the use of high-powered window receivers. More seriously, bandwidth speeds achieved by end-users of a metro WiFi deployment may be disappointing. In a mesh environment, WiFi bandwidth degrades as it passes through each node (or hop), often significantly. In addition, actual bandwidth varies with signal strength which can be negatively impacted by topology, distance from a node, and physical obstacles. Finally, as a shared resource, realized mesh WiFi speeds vary significantly with the number of simultaneous end users. This combination of variable throughput combined with potential interference can complicate deployment of certain applications. VoIP, one of the areas of greatest current interest, will be especially challenging in an unmanaged network using unlicensed spectrum.

Third, while a Meshed WiFi network is cheaper to build than a wired infrastructure, it is not free. In addition to the capital build out costs, there are operating expenses that must be recovered. The most significant expense is backhaul: the network may be locally robust, but will be valueless if users cannot reach beyond it to the Internet or to remote locations. For example, in Philadelphia, there will be at least 4,000 wireless nodes (based on the fact that Earthlink is leasing space on 4,000 light poles). Even with the latest Mesh WiFi technologies, hundreds if not thousands of backhaul points are still required to connect the Meshed network to the Internet - each requiring some form of broadband connectivity. Deploying WiMAX backhaul may help, but many leased connections will still be required.

How then can cities provide this desirable public utility, if they do not wish to make it simply a paid subscription service? There are several options worth considering beyond direct subsidies. Meshed WiFi might be cost-justified through its enablement of enhanced public safety applications. Another approach is a partnership with a profit-making organization that believes it will be able to generate revenues from the network though services such as location based advertising. For example, amid much speculation, Google has announced a partnership with Earthlink in its bid for the San Francisco Meshed WiFi network, which could act as a foundation for a location based search service.

All of these factors must be carefully considered in order to give each deployment the highest chance of success.