News

Wi-Fi Overbuild Grows in Mich.

8/15/2004 8:00 PM Eastern

Telecommunications providers have seen their cities overbuilt by video providers and telephone companies, but a wireless broadband overbuild in Michigan might be one for the books.

In Grand Haven, a community of about 16,000 on the shore of Lake Michigan, wireless-fidelity (Wi-Fi) provider Ottawa Wireless Inc. in four and a half months has already attracted 300 residential customers, about 35% of which have abandoned cable-modem or digital-subscriber line service in favor of cheaper, portable broadband, according to the operator.

Wired broadband service typically sells for $35 to $50 per month. Ottawa’s entry-level product, a 256-Kilobits-per-second service, retails for $19.95, according to company CEO Tyler van Houweligen.

He said about 60% of customers traded up from dial-up connectivity.

The venture has also sold about 300 pay-as-you-go access cards for people who don’t want monthly commitments.

Charter Communications Inc. officials declined to comment on the impact of the wireless competitor. SBC Communications Inc. is the incumbent phone provider.

Ottawa Wireless is in the midst of a beta test of mobile Wi-Fi voice-over-Internet protocol telephone service, with the expectation of a full product launch within the next few months. Unlimited calling is expected to be marketed for $29.99 per month.

Several cities have committed to developing large Wi-Fi hot spots, including Long Beach and Half Moon Bay, Calif.; Spokane, Wash.; and Rio Rancho, N.M. Those communities have established services in their commercial cores.

Grand Haven officials believe their community is the first to host a service that is available to all 16,000 residents and thousands of tourists attracted to the community each summer.

The system includes several hundred Wi-Fi radios located on city infrastructure to cover six square miles, and also allows Internet access from as far from the shore as 15 miles, according to van Houweligen.

Mayor Roger Berman said the Wi-Fi project is an offshoot of discussions which started four years ago, during cable refranchising.

A municipal cable build was considered, but rejected as too time-consuming. Though not a technologist himself (Bergman owns shoe stores), the mayor said Wi-Fi connectibility was on his “personal agenda” for the town.

“I feel Wi-Fi is the future. It makes us more of a cool city than we have been,” he said.

Along came Ottawa Wireless, which had been marketing a citywide wireless plan to European cities with no success. Cities there reacted negatively to the prospect of antennas all over town, CEO van Houweligen added.

But when in his former hometown of Grand Haven, he found a receptive audience.

“They knew it would be complicated, but they opened the rights of way for us,” he said. The network is privately owned, but the operator shares revenue with the city. Van Houweligen would not specify the split, but conceded the amount is close to the 5% franchise fee paid by the local cable operator.

“I think it has real upside for us,” the mayor said.

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