Firm wants to resurrect Tempe's Wi-Fi network - East Valley Tribune: Tempe

Firm wants to resurrect Tempe's Wi-Fi network

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Posted: Wednesday, August 13, 2008 9:08 pm | Updated: 10:39 pm, Fri Oct 7, 2011.

Tempe's citywide wireless Internet network, abandoned months ago, is drawing attention from a company interested in bringing the system back to life.

The network hasn't had any paying customers since early January, when its operator - the last following a number of sales and acquisitions - stopped providing customer service after years of struggles marked by a lack of interest and weak signal strength.

Tempe's vaunted Wi-Fi system in shambles

Until mid-May, Internet users still could tap into the signal, but now the only signs of the network's existence are the gray boxes and transmitters attached to light poles and atop buildings throughout the city.

Despite the system's failure, Computers and Tele-Comm Inc. of Independence, Mo., believes it can profitably operate the system and will tell the City Council as much tonight.

CTC runs wireless networks in the Kansas City area, and in the Hilton and Hyatt hotel chains.

President/CEO Graeme Gibson explained that his company sees a bargain waiting for a buyer. Currently, the network is owned by the venture capital firm Commonwealth Capital, which provided financing for its last operator.

"This is a million-dollar house that's on sale for $138,000," Gibson said.

The meeting between Gibson and Tempe's elected leaders will take place during the Council's informal issue review session, so this will be a preliminary discussion rather than negotiations.

But Gibson stated up front CTC won't get involved unless the city agrees to some concessions, as he called the city's contract with the original operator "untenable." For example, the contract's penalty for failure to provide service was a "rent" of $500 per pole; CTC would want that lowered to $50.

Because of these potential snags in any dialogue between Tempe and CTC, Gibson estimated his company only has a 50-50 chance of buying the system.

Five years ago, when Tempe began planning to bring Wi-Fi, wireless fidelity, to its downtown, the city was far ahead of its East Valley peers in embracing this new technology.

The system came online in early 2005, turning Mill Avenue into a "hot spot" where users of laptop computers and personal data assistants could connect to the Internet using not wires but a signal carried through the ether.

Within months, the city decided to expand the system across Tempe's 40 square miles with the rollout targeted for February 2006.

But there were problems from the start.

The system debuted with only a third of the number of transmitters needed to effectively cover the entire city; the cost of more equipment hamstrung the network's marketing efforts. Also working against Wi-Fi were Tempe's stucco homes, which have a layer of wire mesh blocking or weakening signals.

Because of these problems - and, Gibson said, the operator being forced to spend its marketing money on more transmitters - demand was a fraction of projections. Tempe never signed up more than 1,000 subscribers, about 10 percent of initial estimates.

Still, Gibson sees a system that would be worth the $1.3 million purchase price, plus the $1.4 million needed for the restart. "Of all the systems we've looked at," Gibson said, "this is the most resurrectable."

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