Google's plan for city signals Wi-Fi ambitions
Google Inc.’s expansion into public Wi-Fi could be a boon to the embattled municipal broadband movement and presents intriguing new possibilities for the search giant, though putting the traditional carriers out of business isn’t likely to be one of them.
The company took its wireless ambitions to the next step on Friday, submitting a proposal for providing wireless Internet access throughout San Francisco. Few details of the plan were provided, but the city had asked for ideas and comments on how to provide access to everyone in the city either free of charge or at low cost. Google’s was one of 24 proposals received, Mayor Gavin Newsom said at a news conference Monday. If the rest of the decision-making process goes as smoothly as possible, such a service might go live within five or six months, Newsom said.
Projects to deliver public Internet access under the auspices of municipal governments have come under fire for being financially risky or unfair to other service providers, with a plan by Philadelphia becoming a lightning rod for the debate. Philadelphia is expected to announced its contracts for city-wide Wi-Fi this week. (Google hasn’t expressed any interest in Philadelphia’s project.) Google, whose billions in annual revenue are generated through targeted ads associated with searches, might be able to improve the economics of such plans via location-based advertising. But it’s a big leap even for Mountain View, California-based Google, which now has its hands in free e-mail, video and maps, among other things.
Google is already dabbling in wireless projects. In April, it began sponsoring a hot spot in San Francisco’s Union Square, and last month a page appeared on Google’s Web site offering download instructions for “Google Secure Access,” a client the page says “allows you to establish a more secure connection while using Google WiFi.” The company has so far declined to elaborate on its Wi-Fi plans and could not be reached for comment Monday.
For the past year, Google has been sponsoring the free Wi-Fi network in New York City’s Bryant Park. On that project, though, Google’s contribution is purely financial; the company isn’t controlling the network or tracking traffic across it. Bryant Park’s Wi-Fi hot spot, launched in 2002, is managed by a local nonprofit group, the Public Internet Project.
San Francisco is exploring ways to provide ubiquitous high-speed wireless service in order to create an attractive city for innovative people and businesses, as well as helping economically disadvantaged residents get online, Newsom said. Last month it sought comments from the public as well as information from potential builders or operators of a service. A committee will study the input for about three weeks and present its findings to Newsom, the mayor said. After that, the city will write a request for proposals that would include actual plans and bids to provide a service. The city could adopt one proposal in its entirety or put together its own proposal from parts of several plans.
A wide variety of entities submitted plans, said Chris Vein, director of the city’s Department of Technology and Information Services. They included mobile operators such as Cingular Wireless LLC and Internet service providers such as EarthLink Inc. There are also several different types of revenue sources suggested in the proposals, including advertising, according to Newsom.
A public-private partnership may be the best approach, in part because technology is changing too fast for the city to keep up with it, Newsom said.
“I have a hard enough time maintaining the water system,” which mostly dates from 1915, Newsom said. Likewise, the city aims to get the system up and running with little or no taxpayer expense, he said. Newsom declined to estimate how expensive it would be to build such a network.
Google would provide both the network and the fundamental service for free, although certain aspects of the service might carry a charge, according to Newsom, who said he hasn’t yet examined the proposals in detail. There would be no reason for the city to pay for a network if a private company is willing to provide it free, he said, though he added the Google plan might not turn out to be the best deal.
Google most likely would find partners to actually build and operate a municipal wireless network, said Esme Vos, founder of the Web site MuniWireless.com and a researcher of municipal wireless projects. What Google would bring into the equation is money, she said. Google could build a system delivering ads to Web users in specific locations, which could be determined through information from the access points. Background data about a user’s characteristics and interests could target those ads even more precisely, she added.
Advertisers would pay Google a premium to deliver highly focused ads to those users, Vos believes, and the builder and operator of the network would get a piece of that revenue just for providing the transport of data packets.
Providing the service for free is the perfect way to draw in users for advertisers to reach, she said. “The more people that are on this network, the more valuable it is for everybody, especially for Google, and especially for the network operator,” Vos said.
Though this approach won’t necessarily be the best for all municipalities, Vos believes Google’s San Francisco plan is just a test bed for more such offerings.
Telecommunications analyst Jeff Kagan agreed. “This is really a trial for the company, no matter what it says,” he said.
Google’s ability here is unproved, Kagan said. “It’s not a communications provider. It’s a Web site, it’s a search engine. It’s terrific on the Internet, but accessing the Internet is a different business. They have to prove themselves.”
He believes Google’s future in Wi-Fi will depend on the results in San Francisco. “They’ll see if it’s a viable business, if it helps them generate more business and hang onto customers,” Kagan said.
However, the real battle for broadband and Wi-Fi will be fought between the phone and cable companies, Kagan believes. He expects offerings such as a Google Wi-Fi service to pick off perhaps 20 percent of the market. Kagan doesn’t see such services as the primary broadband service for a consumer. The key to that business will be bundles of Internet access with voice and video, he said. Google “isn’t offering any bundles, just fast Internet,” Kagan said.