CEDX

Guest Commentary on MuniWireless

That tireless promoter of wide access to broadband, the globetrotting Esme Vos, extended a gracious invitation for me to write about the prospects for the Long Island Wi-Fi project, and I used up many bits in responding to her invite.  I tried to put the project in contrast with the work that we have been doing on Fire Island, and in the context of the competitive environment that it faces.  You can try to glean some nuggets from my brain dump at this link, or read the whole thing after the jump:

Lessons Learned from Long and Fire Islands

As our Fire Island Wireless network is closing out its 5^th and most successful season, I would like to share a few things I’ve learned as they apply to the Long Island Wi-Fi project. Even though the plug has not been pulled officially, the writing is on the wall for the Long Island Wi-Fi project, and its an obituary. Cablevision is launching its Optimum Wi-Fi network, offering complimentary access to 2 million wired subscribers over the tri-state area, not just Long Island, and that pretty much dries up any potential paying customers that e-path might have had.

Supporting the Entrepreneurial Spirit

My friend Pam, owner of Klatch Coffee Bar on Maiden Lane in Lower Manhattan, and her husband JC, have started a summer program for budding entrepreneurs, building a a coffee bar in donated space at the South Street Seaport. 
The locations of both coffee bars are on the map below, and the press release is after the jump.

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Long Island Wi-Fi project update

Things are looking grim for the bi-county wi-fi project.  In this Newsday article, where I get the last word, and the followups on MuniWireless and Wifinetnews, the coup de grace may be administered by the combination of e-Path's classification of what kind of company it is, and the cost of pole rental to that classification.  Ugh.   I had no idea pole costs were so high for a non-telecom classification.  Reid Epstein also has another couple of nuggets in there that were news to me.  In the county budget for last year, $200K was allocated for the RFP, which I thought was outrageous,  but in the article, he reports a spend of a more reasonable $60K.

The whole business model there is shaky, especially with the outdoor network, and the two entrenched incumbents on the island providing fixed services, plus cellular data availability.  The network envisioned is in a no-man's land, where it won't have the performance to compete with wired offerings, or the coverage to compete with existing cellular mobility.  It was doomed from day one, and the thing that really cheeses me off is that it froze the market for individual municipalities to deploy their own nets, with them waiting two years to see if there really was a free lunch out there.  We had substantive discussions underway with a few villages, but these evaporated once this wacky plan came along. 

We are able to thrive on Fire Island because we can compete against DSL on price and performance, and we collect normal amounts of revenue for providing what has become an essential commodity in a niche market.  Now that we have a substantial existing customer base, we can use those cash flows to build higher tiers of service to take us beyond our current offerings into higher performance services, where it will be possible to support VoIP, adding another revenue stream.

Somebody should just put this dog out of its misery.

Philadelphic Phoenix's bones are where the action is

The news of an investor rescue of the Philly network is welcome, but the devil is in the details.  The investors are picking up an important distribution infrastructure that they can use to build a business on.  The duopoly has set bandwidth prices high enough, and the scarcity of wired broadband is such that if you take that distribution infrastructure and use it to deliver ethernet handoffs, you can make some serious coin.  Especially if you can deliver better than DSL performance and bundle some perks that the incumbents charge extra for.
The free no-support wi-fi is a no brainer to pickup the rights of way and siting agreements. It allows the politicos to save face and not impede the deal.   There's no way to make decent money reselling somebody else's infrastructure, unless you have a massive account base to aggregate those slim margins over.  You have to reduce your monthly nut by owning your own backbone to your internet peering point.  Flipping the asset and giving away wi-fi while aggressively selling wired bandwidth to class B and C office buildings and multi-tenant units gives this plan a good shot at being viable.  Real estate is everything in this game.

I'm also happy to see an investor seeing promise, even in a failed network.  I hope they'd be even more interested in a profitable wireless broadband provider, wink wink, nudge, nudge!

LIMBA - LIRR President, Helena Williams pulls into our station

Helena Williams, newest, and first female President of the LIRR came to LIMBA today to give us an update on her first six months at the throttle of the nation’s busiest commuter railroad. Drew Scott of News 12 was in attendance and snagged a post-meeting interview. Ms. Williams has a long career in public service, from positions in New York City Government, Nassau County, and running the Long Island Bus division of the MTA. Her enthusiasm for the job is evident, and it is an exciting time to be at the LIRR, working on the first expansion of the system in over a hundred years, East Side Access (ESA). Her approach has focused on three key areas, safety, security, and service reliability. Her talk today was focused on the third area, reliability. She said that this was what has arisen most in her interactions with customers.

The two projects that will have the biggest impacts on service reliability will be ESA and the third track on the mainline between Floral Park and Hicksville. Ms. Williams is not a career railroader, but her demeanor, carriage, and experience appear to make her the right person for the job at the right time. For ESA to be a success, supporting projects in the region must also be implemented successfully, and the attempts by her predecessors to move these forward have met with ferocious resistance from those unwilling to shoulder burdens for the greater good. Her recommendation of Conquering Gotham as a reference bodes well for her prospects in completing the supporting projects. In presenting these projects, she spoke of sharing benefits and burdens on a bi-county, regional basis. To put it in a nutshell, ESA brings huge benefits to both counties, but Nassau must bear the burden of Main Line Corridor Improvements ( MLCI - third track ), and Suffolk must bear the burden of a new train storage yard somewhere. The third supporting project, trackwork in Jamaica, imposes burdens on the existing ridership, having to have things juggled while trackwork takes place within the space and time envelope already owned by the railroad.

Her description of the review process and emphasis on the railroad’s acceptance and integration of community feedback into the plans for MLCI, and a plausible description of road traffic conditions if the supporting projects don’t take place indicate that an understanding of the landscape and a recognition that different sales approach is necessary has arrived in Jamaica station on Track #1. A quick overview with light detail of some trouble spots and how MLCI can solve them shows an engaged manager with both strategic and tactical skills. All those skills will be called upon to guide the nation’s busiest railroad, running 728 daily trains with just about 1200 pieces of rolling stock carrying 289,000 customers per day.

Intra-island service was another highlight of her talk, where she described the integrated project to deal with County Road 39 construction. The LIRR’s shuttle service between Speonk and Montauk was a large, but not the only part, of this effort. She gave kudos to the East End planners that brought together van and carpooling services from LIRR stations to end destinations, plus communication facilities as a model for future projects. She emphasized the integration part of the equation, where the LIRR is part of a holistic approach to transportation, and transportation oriented development.

Once again, we had a lively Q & A session, which covered the prospects for additional shuttle service projects and the Moynihan Station/Farley Post Office project, which prompted a declaration by Ms. Williams that we should have her back for another meeting just to discuss the issues surrounding that particular item. We look forward to another informative Friday morning visit from Madame President.

Long Island Business News Podcast - At C Level

Shortly after Labor Day this month, I was interviewed by David Reich-Hale of LIBN for their podcast series featuring Long Island CEOs.  This was right around the time of the Muni about face by the big players, and left a bunch of juicy questions to answer, vis-a-vis the prospects for Long Island Wi-Fi.  It's about a 10 minute listen, and the first time I've been able to hear myself on a professionally produced podcast. Does everybody else hate the way they sound to themselves? 

I didn't say no, I said that e-Path can be successful if they make some changes

In Glenn's write up of this story in the Long Island Business News where Alison Snyder interviews me about the prospects for e-Path's success in building a Wi-Fi network on Long Island, I never said that they couldn't do it, I just outlined some of the pitfalls and challenges that await them, and made some suggestions on what they should do in my opinion to raise their chances of success.  They're going to have an uphill battle for sure, there's no disagreement about that.   I don't think that metro wi-fi blankets work, and that to be a successful wireless ISP, you have to have a mix of service offerings, over and above wi-fi access, which is what I wrote in the comments to Glenn's post.  At the end of the story, where Alison says I discredit the claims of e-Path's partnership with Cisco and Keyspan, I was questioning the proposition that Keyspan Communications and Cisco will be clients or anchor tenants of the network.  From the outside, it looks like Keyspan Communications and Cisco will be suppliers to e-Path of fiber backhaul and equipment, respectively.  I don't see how e-Path will get revenue from Keyspan Communications and Cisco.  LIPA, the electric utility, may be both a customer and supplier to e-Path, because they can use the network connectivity for telemetry from their substations, and they will collect rents from e-Path from the poles that e-Path has to mount it's equipment on.  If Keyspan Communications was a bit more forward thinking, they would already be customers of the existing WISPs on Long Island, using existing POPs to expand their footprint, but they don't do that.
I also think that the selection of e-Path was the correct one for the counties, because it puts no public funds at risk, and if they flop, they flop, no harm done.  My firms did not bid because we didn't see the ability to have a successful business case without anchor tenancy, and at the time, the big boys with the big pockets were pursuing the job, and we figured that it wasn't even worth the time to work on a bid because one of the big guys would be picked.  e-Path turns out to be the smart ones, because they were one of the last ones standing at the end of the bid  process, and now they have valuable leases to county property, gratis.  Delivering wi-fi with them will probably not be profitable enough for sustainability, but they can be used as a starting point for additional offerings, and that's where they can be a success.

Getting mentioned in the press is a great thing, because you get your name out there, but you don't have control over the ultimate end product.  Blogging is a terrific communications tool, because you get noticed and googled when you're in the paper, and you can use your blog to amplify and clarify your message. PR, Marketing, and Viral Marketing are different things from each other, and David Hornik of August Capital explains this well, and hilariously,  in one of the podcasts from VentureVoice's Entrepreneurial workshop.

Long Island Wi-Fi prospect update article

Alison Snyder of Long Island Business news interviewed me for her update article on the Long Island Wi-Fi project's prospects in light of the recent changes in the muni wi-fi market.  This project is a no-lose proposition for the counties, because they make no investment in the system, only allowing access to county property and having no commitment to buy services. The recent turmoil in the muni wi-fi market benefits e-Path because expectations have been so severely lowered, that whatever modest success e-Path is able to achieve will be viewed highly.  I think that in order to succeed, e-Path needs to roll out more offerings than outdoor wi-fi access, but it remains to be seen whether they can raise enough money to even build out their test networks.

Newsday Details some of Long Island Wi-Fi challenges

One of the nice things about blogging is that you can expand upon some of the things that you see in print and the articles you are mentioned in.  It's also good to be included as the local expert among the company of Glenn Fleishman, Esme Vos, and Chuck Haas, noted authorities in the space.  Rich Dalton of Newsday writes an extensive piece about the prospects for the Long Island Wi-Fi project.  We had a wide-ranging conversation during his research for the piece, but the one quote that made it in there was the one about e-path facing a tough time acquiring customers.  This will be true, as there's a tiny market for outdoor wi-fi networks on the bulk of Long Island.  Outdoor networks in general are pretty low percentage shots in terms of getting your money back.  Weather is a huge factor, and so are the trees.  The density required to compensate for foliage is cost prohibitive.  I do think that e-path can be successful if they know the local landscape well and can find the seams where cable has not penetrated and follow that path toward buildout.  The performance of Verizon's DSL has been less than stellar, and customers can be grabbed from them, but reliability and performance of the network, plus getting customers with regular payment habits will be key for their success.  It will be difficult, but not impossible.  Of course, acquiring an existing provider with an established customer base, and then using the mounting assets that come with their award to expand might also be a good way to go.

LIBizBlog catches up with me

Henry Powderly of Long Island Business News picks up on my post about the local tech feeling on the Long Island Wi-Fi award.  I think that there are many ways that wi-fi on Long Island can work, but as I said last year, that I didn't think that a blanket approach would work.  Using wi-fi to try to approach the functionality of the existing cellular networks over a large area is a bridge too far.  Wi-Fi access points replace the functionality of wired 4 to 48 port hubs ( not switches ), and that is what they are best at.  Seamless mobile roaming demands another technology for it to be useful and adopted by subscribers, and wi-fi will not get there before a competing technology does.  If the price of cellular carrier provided connectivity drops, then there's really no point in trying to make wi-fi work in that mode, and you're left with a white elephant.

Where wi-fi works is infill coverage and indoor hotspots, and that's where it should be used.  If e-path is smart, they will find the local spots that are not served by cable/dsl or the existing wireless providers like myself, and start building there, and work with local development agencies to find grants to build out infrastructure for the underserved communities on the wrong side of the digital divide and get those going.  Finding community apps to tie together these ponds of connectivity and promote local businesses will help the effort also.  Promoting less expensive communication via unlocked dual-mode handsets that have prepaid cellular SIMs and a SIP + IM client could develop into a nice little business among this constituency.