Why have municipal Wi-Fi networks been such a flop? - By Tim Wu - Slate Magazine:
Setting up a large wireless network isn't as expensive as installing wires into people's homes, but it still costs a lot of money. Not billions, but still millions. To recover costs, the private "partner" has to charge for service. But if the customer already has a cable or telephone connection to his home, why switch to wireless unless it is dramatically cheaper or better? In typical configurations, municipal wireless connections are slower, not dramatically cheaper, and by their nature less reliable than existing Internet services. Those facts have put muni Wi-Fi in the same deathtrap that drowned every other company that peddled a new Net access scheme.
Today, the limited success stories come from towns that have actually treated Wi-Fi as a public calling. St. Cloud, Fla., a town of 28,000, has an entirely free wireless network. The network has its problems, such as dead spots, but also claims a 77 percent use rate among its citizens. Cities like St. Cloud understand the concept of a public service: something that's free, or near-free, like the local swimming pool. Most cities have been too busy dreaming of free pipes to notice that their approach is hopelessly flawed.
The lesson here is an old one about the function of government. When it comes to communications, the United States relies on a privateer system: We depend on private companies to perform public callings. That works up to a point, but private industry will build only so much. Real public infrastructure costs real public money. We already know that, in the real world, if you're not willing to invest in infrastructure, you get what we have: crumbling airports, collapsing bridges, and broken levees. Why did we think that the wireless Internet would be any different?