David, Goliath bid for Wi-Fi in St. Petersburg
Earthlink and a small local provider are hashing it out.
By PAUL SWIDER
Published November 15, 2006
In what some might consider odd, competing businesses have been in attendance at the city's purchasing staff meetings as the group prepares to choose a vendor for Wi-Fi.
The competing bidders have shown up battling to build, run - and pay for - a citywide wireless Internet network.
Earthlink and Citi Wifi are the only companies left standing after the city culled bids to cover its 60 square miles with radio signals that allow people to connect to the Internet through the air. Last week, an evaluation committee heard final presentations from the Atlanta-based Internet service provider and its small St. Petersburg competitor.
A final decision will come within a month or so, but discussions are stacking up as a contest between an established Internet player and a spunky local high-tech startup.
Earthlink touted its 5.4-million customers nationwide and its hundreds of millions of dollars in liquid assets it is already using to build wireless networks in Philadelphia, Anaheim, New Orleans and other cities. Citi talked of its projects in Dunedin, Treasure Island and West Palm Beach, but emphasized its technology and criticized Earthlink.
Both companies are seeking to tap into an increasingly popular sphere of development. Wi-Fi spending in U.S. cities may exceed $3-billion in the next four years, according to a report by MuniWireless.com.
Some access to the Wi-Fi network would be free, but Earthlink's full-access charges would start about $21.95 a month and Citi's, $24.95. Temporary access would also be available for tourists.
Don Berryman, president of Earthlink's municipal wireless division, said that 12 years ago his company started providing dialup access, which is now too slow for most customers. Because Earthlink doesn't have wires of its own, he said the company has to move into wireless to keep customers.
"We're motivated," Berryman said. "We're losing our dialup base."
The president of Citi, Frank McCarthy, said his company came into being after helping to set up communications after Hurricane Charley. He said building such networks is all he does, though he acts as an Internet service provider for customers in Dunedin.
"This isn't a side project for an old company trying to remodel itself," he told the committee.
In a meeting after the presentations, committee members said they liked the fact that Citi is local, but worried about its finances, experience and professionalism.
"It's important we consider the viability of who is going to do this," said Gene Webb, who runs information technology for the Police Department.
Earthlink says it will cost about $7-million for 2,400 installations around the city, the "nodes" of the network. Citi estimates nearly $8-million for its 1,770 nodes.
The committee expressed doubt about Citi's funding, evidence of which was only a letter of guarantee that did not name the privately held company's investors.
"We have the money in the bank," Berryman said of Earthlink. "We also have the customers to bring to the market."
Committee members said they were impressed with Earthlink's business plan, customer service models and smooth presentation.
The most serious point of contention was over technology. Citi contends that Earthlink's nodes have failed in the field, while Citi's hybrid nodes create better connections even though there are fewer of them. The city staff was not convinced.
"The argument that less nodes is better does not make sense," said Dave McLean, the technical support manager with the city's information technology department. "It's a physics issue."
McLean said he tested Citi's Dunedin network himself and found it half as fast as the company claims. But even that speed is twice as fast as what Earthlink is promising as a basic retail standard, McCarthy said,
Webb said police departments use the technology Earthlink proposes and he considers it "world class." He also said he thought Earthlink would make sure performance was strong and consistent because it needs wireless to survive.
Paul Swider can be reached at 892-2271 or firstname.lastname@example.org or by participating in itsyourtimes.com.
[Last modified November 14, 2006, 23:12:10]
[an error occurred while processing this directive]