Utility bills: Water, gas...Ricochet?

Aerie Networks, which bought the network Friday for $8.25 million, has plans to let city governments sell the service in much the same way that utilities provide consumers with water and electricity, company officials said. The plan was announced Monday.

Ricochet's maker, Metricom, like many wireless ISPs, went out of business in the midst of an industry consolidation. Resellers such as Wireless Web Connect, which was the chief reseller for the Ricochet service, have been reeling, too.

"No one has made money," Mort Aaronson, chief executive of Aerie Networks, said Friday. His plan is different from the single-channel reseller approach, he says. "Why would we want to do what others have failed at?"

Under Aaronson's proposal, Aerie would partner with local governments and allow them to sell the service directly to their citizens, or use resellers to do the job, Aaronson said. Aerie itself plans to use traditional resellers to sell the service, he added.

Some of Metricom's first customers were governments and utilities. Initially Metricom built wireless transmitters designed to automatically read electric and gas utility meters and only later used the technology to develop a wireless modem service. At one point the company's initial products were being used by nearly 200 public utility companies nationwide.

If the plan succeeds, Ricochet would be the latest in a series of wireless networks being treated as utilities by government agencies. Officials in Jacksonville, Fla., and in Ashland, Ore., have set up "wireless zones" in shopping areas and neighborhoods to allow people with wireless modems to access such networks for free.

"What governments are dealing with is a very big issue: Should infrastructure be addressed as a utility?" said Libby Clapp, chief of information technology for the city of Jacksonville. "It's looming on the horizon as a big issue.

Halfway around the globe, in Adelaide, Australia, the local government has set up a "wireless Internet precinct" to provide high-speed wireless access to area businesses.

Some analysts see those kinds of partnerships as a natural progression, since the government originally built the Internet's backbone.

"Why not treat it as a public utility?" IDC analyst Keith Waryas wrote in an e-mail. "It is a public network after all. Providing the on-ramp (in the form of an ISP) is the only part that's historically been private."

Metricom built its wireless, high-speed Internet service in 14 cities using $1 billion in investments from high-tech luminary Paul Allen's Vulcan Ventures and long-distance provider WorldCom, among others. The network was turned off in August after the company filed for bankruptcy protection. The popular service drew 51,000 subscribers, who paid as much as $80 a month for service after buying a modem for $300.

There are some roadblocks to Aerie's plan, the most immediate being the costs of restarting the network. Many of the 16,000 radios that once powered the network have been abandoned, and Aerie must now negotiate with numerous local agencies to re-lease the light poles atop which the radios sit--a move that will take time and money.

Paul Silverstein, one of the several attorneys who represented creditors and debtors in the case, said the negotiations are the hardest he's experienced in recent memory.

"This process gave the word 'tortured' a new meaning," he said.