Municipal Wi-Fi is on the ropes, analysts say

"I think cities will and should scale down their muni Wi-Fi plans and look to hot spot and cellular networking technologies for many of its needs. I believe cities do not have an obligation to provide blanket Internet coverage, but would do better to offer access in public areas like libraries or city buildings and parks," says Phillip Redman, Gartner vice president of research.

Click to see: Phillip Redman

"In the industry as a whole, while EarthLink's decision sets things back to a degree, there are some notable success stories - Minneapolis and Portland come to mind - which proves that it can work, Once there is the right combination of political will, business strategy and sufficient profit margins, I think more governments will begin to warm to the prospect of providing muni Wi-Fi," says Ben Madgett, analyst with Datamonitor.

Click to see: Ben Madgett

"I don't see cities opting to abandon their Wi-Fi plans completely, and I think that those who lose EarthLink are likely to look to vendors who can fill the void. At the same time, they will or at least they should be more cautious in developing a clear, sustainable business plan to avoid spending millions of tax dollars on such a risky initiative," Madgett says.

"Most companies are hesitant to enter this market now, as they originally should have been. It is sad to see that these cities were sold a bill of goods that even early on in my analysis, wouldn't work at existing cost levels. The cities though are also partly to blame as we all know, nothing comes for free," Redman says.

"The fact that EarthLink has pulled back out of the market has really hurt the public access municipal wireless market in general," says Peter Jarish, research analyst with Current Analysis. "It was one of those cases where EarthLink was the poster child for making it work or being the one to make it work."

Click to see: Peter Jarish

"With the current state of the market, muni wireless seems to be much more viable in small to medium size areas, where deployment is more manageable, and there is a larger need to compete for economic development,''Madgett says

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