Wi-Fi plans in Sacramento unplugged

Plans to roll out a wireless Internet network in California's capital, Sacramento, fell through on Friday after wireless Internet provider MobilePro pulled back its proposal.

The city had accepted the MobilePro offer in September of last year, and a pilot in the center of Sacramento was performed in March. The parties went into final negotiations, but couldn't agree on terms, and finally, MobilePro chose to withdraw the offer. "The requests that were made by the city of Sacramento were fairly significant and changed the overall structure of our business case," said Jerry Sullivan, president and chief operating officer of MobilePro. "We just could not make it work in our business model."

The sticking point? Speeds for free access. MobilePro was offering 56Kbps in a limited area for two hours a day; higher bandwidths would cost subscribers a monthly fee.

Sacramento originally agreed to the deal, but Stephen Ferguson, CIO of the city's IT department, said too much has changed since the request for proposal was put out more than a year ago. "We just got to a point to when MobilePro could not meet the conditions we were seeing in other contracts," he said.

Sacramento watched advertising-financed 300 Kbps free access being promised citywide in Portland, Ore., and San Francisco, and wanted a similar deal. "In exchange for increasing the speed, MobilePro wanted the city to be an anchor tenant at a cost in excess of a million dollars a year," Ferguson said. "The council didn't feel that was appropriate."

In MobilePro's view, a higher-speed free access based on ads would not be financially viable without subsidies from the city. "It's got to be a win-win for both the city and our shareholders," Sullivan said.

The Sacramento city council will decide how to proceed this week, and Ferguson thinks another RFP will be issued soon. "We have a lot more experience now, we know what other cities are getting. The city council just wants deal points that are comparable to what we see in other cities and we were a ways off of that."