Covad Deal Revives Stalled Silicon Valley Wi-Fi Plan

Covad Communications has jump-started a stalled public wireless project in Silicon Valley with a plan to target businesses first.

The competitive broadband provider will build a long-delayed Wi-Fi test network in one local city with an eye to a commercial rollout that might include other technologies and partnerships with incumbent mobile operators. But the initial concept is far more narrow than what a regional nonprofit and a consortium including Cisco Systems and IBM had once envisioned.

Ambitious Project Stalls

Like many municipal Wi-Fi plans, the one proposed in early 2007 by Joint Venture: Silicon Valley Network and Silicon Valley Metro Connect sailed into rough seas in mid-2007. Azulstar, the startup that was to build and operate the network, couldn't get funding even for two test networks at about US$500,000 each.

Some critics said the planners would have to back down on an estimated US$100 million concept that spanned about 40 municipalities and 1,500 square miles, with several types of networks and services designed for government, consumer and business customers.

After Azulstar pulled out, Metro Connect set out to find another partner and found that Covad's hopes overlapped with its own. Covad, based in San Jose, California, provides high-speed fixed wireless service to businesses in the San Francisco Bay Area and other markets using proprietary pre-WiMax networks. It wants to reach a larger number of smaller customers, including home-based businesses, with a service that can be deployed for less money and carry a lower monthly rate.

Test Territory Set

For the test network, which will cover one square mile of downtown San Carlos, California, for three months, Covad will roll out Wi-Fi base stations on light poles and other locations, and use its own wired and wireless infrastructure to link those to the Internet. Covad plans to deploy Wi-Fi access points in the test area over the next 30 days. The company wants to find out whether it can make money selling a Wi-Fi service on unlicensed spectrum to small businesses. City governments and public safety agencies are a secondary target, said Alan Howe, vice president of wireless strategy at Covad.

"Our commitment is primarily to serve our own internal needs," Howe said, noting that no taxpayer funds will go into the test network. The grander vision of signing up cities across the region is attractive but too much to dive into now, he said. "We want to make sure we walk before we run."

New Partner Welcomed

Working with Covad suits Joint Venture: Silicon Valley Network, which has been hoping for a viable operating partner since the beginning, according to Seth Fearey, vice president and chief operating officer of the group. Cities and companies in the area felt burned by Metricom, which operated the popular Ricochet service in the 1990s but later failed and left its equipment behind, he said.

"We just want someone to come in and offer good-quality service and make money at it, so that it can be upgraded, kept current and be valuable for the long term," Fearey said. The ill-fated choice of Azulstar was made by Metro Connect, the partnership of Cisco, IBM and nonprofit SeaKay, he said. There's no guarantee of Covad's future, but the company brings valuable assets such as its existing backhaul network, he said. A Cisco representative was not immediately available for comment.

The partners are now taking a "calmer, more rational" approach to the project, said independent municipal network analyst Craig Settles. He still believes that governments may be a more ripe market because of ample grant money available for such initiatives. A regional wireless network would be ideal for police and fire in the area because the cities are small, and response to big emergencies is often a joint effort.