Santa Clara ready for wireless – MetroFi to finish one of largest Wi-Fi networks in nation

The Bay Area is peppered with Wi-Fi hot spots: SBC Park, Union Square, countless hotels and cafes. Some even cover several blocks.

But now a Mountain View startup plans to connect an entire city with the wireless Internet equipment, allowing anyone in the city limits of Santa Clara to surf the Net at lightning fast speeds for $20 to $30 per month.

Todd Wallack, Chronicle Staff Writer

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MetroFi Inc., which has kept a low profile until now, plans to begin service in half the city, including most of the city’s 40,000 homes, by this summer and finish the 20-square-mile network later this year — making it one of the largest public Wi-Fi networks in the country.

"We’re basically changing the landscape,” said Chuck Haas, MetroFi’s CEO and co-founder, who is already well known in Silicon Valley for helping to start Covad Communications, a DSL Internet provider based in Santa Clara that survived the dot-com bust.

A handful of other small communities already have citywide networks, but the concept is still new. Syndeo Group recently installed a Wi-Fi network covering 13 square miles in Lafayette, a rural area in Southern Louisiana. And Aiirmesh Communications is building a wireless network in the Los Angeles suburb of Cerritos, which has 50,000 residents and measures close to 9 square miles. (San Mateo’s Tropos Networks supplied the equipment.)

The largest such network is in Eastern Oregon, where EZ Wireless of Hermiston has created a network spanning seven rural towns and 600 square miles. It is used by emergency crews, businesses and residents.

Now MetroFi and Aiirmesh are talking about creating similar Wi-Fi community networks around the country. Aiirmesh says it is in talks with a number of cities, including some in Northern California. MetroFi says it plans to build networks similar to the one in Santa Clara in other parts of the Bay Area.

"We’ll start in our home area first … and then expand across the country,” said Pankaj Shah, another MetroFi co-founder and Covad veteran.

A number of previous efforts to provide other types of wireless Internet services ran aground because they proved too expensive and didn’t attract sufficient customers.

Sprint, for instance, signed up 52,000 customers, including several thousand in the Bay Area, for its wireless Internet service, called Sprint Broadband Connect. But it halted its roll-out two years ago.

Meanwhile, Metricom in San Jose offered a different type of wireless Internet service, called Ricochet, which relied on radio transmitters atop light poles. But the company went bankrupt in 2001 after losing several hundred million dollars trying to roll out the service nationwide.

In addition, MetroFi faces stiff competition from existing broadband Internet services in Santa Clara. For instance, Comcast Corp. offers cable modem service for $46 to $60 per month and SBC Communications sells DSL for as little as $30 per month, with a one-year contract, plus taxes and fees. Covad and other smaller firms also offer DSL. (Aiirmesh has an advantage with its system in Cerritos, since the community currently lacks cable and DSL service.)

But MetroFi executives are undaunted.

Haas pointed out that Sprint used a fixed wireless technology that required the company to send technicians to install receivers, about the size of a pizza dish, on customers’ roofs — which drove up the company’s costs and wasn’t mobile.

Metricom’s service, meanwhile, was slower (just slightly faster than dial- up) and relies on the company’s own proprietary technology, which took additional money to develop and maintain.

By contrast, MetroFi says its roll-out should be significantly cheaper, since it plans to rely on standard Wi-Fi technology that is already being used by thousands of customers. (The company declined to name its equipment supplier.) And it says it can avoid expensive "truck rolls" to customer homes by shipping customers the equipment — which looks similar to the standard Wi-Fi kits available in electronics stores — to install themselves. It will also be faster — more than 1 megabit a second, which is comparable to DSL.

Moreover, MetroFi believes it can compete head-to-head with DSL and cable modem by offering cheaper prices, perhaps as little as $20 per month.

"The key value proposition is affordability,” Haas said.

However, MetroFi said customers will actually sign up for its service through other Internet service providers, such as Earthlink, so it couldn’t say for sure how much its partners will charge. MetroFi plans to operate the local network and act as a wholesaler, selling the service to ISPs who in turn market it to consumers.

MetroFi executives wouldn’t say how much money the system costs or how much it needs to break even. But Aiirmesh chief technology officer John Griebling said community Wi-Fi networks typically cost about $100,000 a square mile to deploy, which would put the Santa Clara network at $2 million. Still, that’s one-tenth the cost of building a new DSL or cable network, making it much more affordable.

Likewise, MetroFi executives said they wouldn’t have received venture capital funding if the technology was a money-loser. Today, the company plans to announce that it has received $9 million in early funding from Sevin Rosen Funds, August Capital, Western Technology Investors and other individual investors.

Still, a technology analyst warned that MetroFi and others could run into problems with interference, since the community Wi-Fi networks must share the radio spectrum with everything from smaller hot spots in cafes and homes to baby monitors and door bells.

"There are definitely problems leveraging an unlicensed frequency to produce ubiquitous Wi-Fi,” said Chris Kozup, an analyst for the Meta Group, a technology research firm. And even where interference isn’t a problem, the Wi- Fi signal doesn’t always penetrate walls, making the service inaccessible inside many homes.

Griebling conceded interference could be a problem, saying the firm spent most of its engineering efforts trying to reduce the impact.

But Haas dismissed the issue, saying several different networks could normally share the same frequency without problems, since the capacity of each Wi-Fi channel is larger than most surfers ever need.

As for the problem of not being able to receive Wi-Fi signals inside a house? Haas said customers could position the main Wi-Fi receiver near a window, and then use a home network to relay the Internet connection to the rest of the home.
Going Wi-Fi

MetroFi plans to launch a Wi-Fi network covering the city of Santa Clara this year, one of the largest public Wi-Fi networks in the country. Other large public networks include:

— Eastern Oregon — 600 square miles and seven towns

— Lafayette, La. — 13 square miles

— Cerritos, near Los Angeles — 8.9 square miles

— Half Moon Bay — downtown

— Baton Rouge, La. — downtown

— Cleveland, University Circle area

— Athens, Ga. — downtown

Source: Chronicle research

E-mail Todd Wallack at [email protected]