City-owned Wi-Fi costly, but gives S.F. control, report finds 

A city report suggests there may be an alternative to Mayor Gavin Newsom’s high-profile agreement to provide free wireless Internet access throughout San Francisco and questions its promise of closing the "digital divide."

Last Friday, Newsom announced that an agreement was reached with Earthlink and Google to blanket The City’s 49 square miles in a free wireless Internet, or Wi-Fi, network, at no cost to The City.

The report says San Francisco could spend between $6 million and $10 million to build its own network and pay $2 million a year to maintain it. Although seemingly costly, the report says it gives The City the most control over the use of the network.

"The City would likely face competition from private interests and risk a wireless network obsolescence due to technological change in the future," the report said.

Under the four-year contract with Earthlink and Google, Earthlink would spend the estimated $15 million to build the network. Google would use the network to offer a free Wi-Fi service that would allow people to surf the Web at eight times the speed of dial-up. To help recoup its costs, Google would sell advertisements. Earthlink will provide wireless service at three times faster than the free service for a charge of $21.95 per month.

As part of the agreement, Earthlink will pay The City $600,000 for right-of-way access and $40,000 annually to be able to use the light poles to mount equipment needed to build the wireless network. The City would also receive 5 percent of the gross revenue from subscribers, which is expected to generate about $300,000 annually.

Supervisor Jake McGoldrick, who requested the report, said a municipally owned Wi-Fi network might better serve residents. The City may be able to provide better Internet service since "all we need to do is break even. We don’t need to make a profit," McGoldrick said.

"Doing it municipally was something that was considered and is clearly not the right path to go down," Newsom’s spokesman, Peter Ragone, said.

The report also brought into question the promise of the Earthlink and Google agreement to close the so-called "digital divide" because of the "relatively slow throughput [Internet] speeds and connection equipment costs for users." Many users of the network would have to purchase such equipment, which costs between $80 and $200, to pick up the Wi-Fi signal, according to the report.

Chris Vein, director of The City’s technology office, who helped negotiate the deal, said the free-service speed is adequate for all the basic uses of the Internet, such as e-mail and surfing the Web, and said revenue coming in from the agreement could help pay for the equipment needs of some users.

"By any objective standards, the plan that we have presented to the public is going to do more faster to close the digital divide than any other municipality in the country," Ragone said.

The Board of Supervisors must approve the deal and could vote on the contract as early as February, but that seems unlikely. "I would anticipate many committee hearings," McGoldrick said.

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