Poor coverage and unworkable business models have plagued many municipal Wi-Fi projects, but the city of Lompoc, California, says managing subscribers was one of the things it needed to improve before getting its project back on track.
The city of about 42,000 on California’s central coast launched its citywide Wi-Fi system in late 2006 but by mid-2007 had only a few hundred subscribers. Many had signed up and then cancelled. Lompoc reportedly had spent nearly US$3 million on the city-owned network and would need 4,000 subscribers to break even. The fee-based network provides between about 700K bps (bits per second) and 3M bps depending on location, according to Richard Gracyk, Lompoc’s wireless services administrator.
Since the launch, the city has added some nodes to fill coverage holes and is taking steps to save costs and help pay for the network. But a critical piece of the equation was properly managing subscribers and controlling access, Gracyk said.
Lompoc recently switched to a new gateway server from Aptilo Networks. It brought the flexibility to offer a 15-minute trial feature for customers who don’t know whether they want to pay for service, and to provide service without having a credit card on file for the user, Gracyk said. The latter feature is critical for Lompoc’s plans to start using the network for government purposes, such as meter reading and getting information out to police and firefighters.
The Aptilo system, which includes network monitoring along with accounting, user database, authentication and other functions, also delivers more information that the city’s customer support staff can use to identify the source of problems when customers call, Gracyk said.
Gracyk said he hadn’t realized how important the back-end elements were to the whole picture.
“They are just as important as our nodes out in the street,” he said.
Many other cities have made the same mistake, according to Craig Settles, an independent municipal network consultant. Often this is because the network projects are driven by infrastructure vendors.
“If their role in life is to sell you hardware, then the rest of the stuff back there is an afterthought,” Settles said.
Making Lompoc’s network viable required even broader changes, according to Gracyk.
“We’ve had to refocus on this project and figure out how to make a go of it,” he said.
There were a variety of problems, according to Gracyk, who came into the job last September. For one thing, the city hadn’t worked out how it would respond to issues when customers called in to its help line, which was run by a third party. And shortly before the Aptilo gateway replaced Lompoc’s previous system, Gracyk discovered that the existing box was limited to handling 500 subscribers. The city thought it had bought licenses for additional users but didn’t have them, he said.
But there was also a chance to make the economics work better. The city let most of its contracts with outside companies expire and brought customer support, network planning and administration, and other functions back in-house. Thanks partly to Aptilo, the volume of support calls has fallen and it’s feasible to handle them within the city, Gracyk said. This has lowered costs, and the greater government use of the network will either bring in revenue or save money elsewhere to help pay for the network, he said.
He now expects the network to break even with just 2,000 subscribers per month, and it already has about 1,000. That counts users of all services, from a $4.99 plan for 48 hours to the $15.99 monthly household subscription. About two-thirds are monthly users, Gracyk said.
“Right now, we are making payroll based on our subscriptions,” Gracyk said.
Lompoc isn’t alone in improving the economics of its network by making better use of it themselves, Settles said.
“There’s definitely a way for cities to turn these situations around,” he said.