City takes back Wi-Fi net it sold to Earthlink

The City of Corpus Christi, Texas, has taken back ownership of the wireless mesh network it sold last year to Earthlink.

On Wednesday, city officials inked the deal with Earthlink, which is trying to unload network properties it bought or built during the past three years. The company pulled the plug on its municipal wireless business a year ago. The deal with Corpus Christi could spark a flurry of activity as cities and Wi-Fi network operators reassess their often troubled relationships and work out new ones.

The city's Municipal Information Systems group will take over network operations for the mesh, which supports a range of municipal applications, including automatic meter reading, video surveillance and inspections."We have the network staff capable of doing the operations," says MIS Director Michael Armstrong."We know our business."

The city could bring in another network operator in the future. But one municipal broadband consultant and author thinks the city will retain at least partial ownership.

"They need to retain some level of ownership over the infrastructure," says Craig Settles, principal with Successful.com."This enables the control needed to ensure that the city can roll out the applications [it has planned] and be able to enhance the network to meet future needs."

Settles says that degree of control also means the city can be as aggressive at is wants in pushing for "digital inclusion" projects, initiatives to train and equip low-income or other groups to use affordable computers, applications and Internet access.

Corpus Christi was one of the first citywide Wi-Fi mesh deployments, completed late in 2006 at a cost of just more than $7.1 million. The initial objective was to support the rollout of gas and water meters that could report usage accurately and automatically, without requiring inspectors to visit each home or business. Today, data is collected from about 55,000 meters — with about that same number still to be deployed — and transmitted to the city's customer information and billing applications.

One key element in the network is the fiber backhaul capacity."We have a have substantial amount of fiber," Armstrong says. "The more often we can get [wireless traffic] back to that, the better [Wi-Fi] performance becomes."

On Thursday, the city council voted after 30 minutes of discussion to accept the IT department's recommendation to resume ownership of the network, which it sold to Earthlink for $5.3 million in 2007. Under the agreement, the city will forego the remaining amount due on that transaction, or $1.6 million. No money is actually changing hands in this deal. But according to data compiled by Michael Armstrong, director of the city's Municipal Information Systems department, the city is coming out ahead.

For one thing, Earthlink had invested nearly $1.8 million more in various network improvements and upgrades, and the city will receive inventory valued at nearly $1 million. Even without the final Earthlink payment, the initial cash payment by Earthlink of $3.7 million covers about half of the city's total investment. Overall, Armstrong estimates, the city's costs totaled $9.3 million for a network with a"value received" of $12.5 million (the sum of the estimated market value, the inventory value, the Earthlink cash paymen, and other amounts).