BOSTON – The city of Boston is considering an unusual approach to creating a citywide, low-cost wireless Internet network: putting a nonprofit organization, rather than a private service provider, in charge of building and running the system.
A task force on Monday recommended that Mayor Thomas Menino assign an as-yet unidentified nonprofit to raise the $16 million to $20 million in private money that the city estimates it will need to build and begin running the Wi-Fi network.
Other cities have generally relied on a single private contractor to assume upfront costs and financial risk for a chance to expand its business.
Although Boston's strategy depends on the willingness of foundations and businesses to come forward with cash donations, officials believe having an existing or newly formed nonprofit in charge is the best way to ensure the project meets its civic goals and steers clear of special interests.
"We believe the nonprofit route may be the best way to bring low-cost service to every neighborhood while providing a platform for innovation unlike any in the nation," Menino said at a news conference where he received a task force's recommendations.
Other U.S. cities launching wireless initiatives have created various layers of oversight to ensure private contractors serve the public interest by keeping prices down, expanding access to low-income neighborhoods, and, in some cases, opening up the network to rivals.
But Boston appears poised to go further than any other U.S. city by putting a nonprofit in charge as the network's developer and owner, outside experts said.
"I'm glad they've done something a little more creative than just having a private provider do it," said Esme Vos, founder of MuniWireless.com, a Web portal for information on municipal wireless projects.
But Glenn Fleishman, editor of the daily Web journal Wi-Fi Networking News, said he wasn't sure other cities would mimic Boston when they are "able to put out requests for proposals and getting companies knocking on their doors with offers to pay for the networks."
Philadelphia, for instance, chose EarthLink Inc. (ELNK) to build, manage and own its system and act as a wholesaler and retailer. The system there could start operating next year.
Boston is one of more than 250 communities nationwide that are preparing or have deployed Wi-Fi service, which uses radio waves to connect users to the Internet at high speeds.
No major U.S. city has yet begun to offer citywide service, and organizers of Boston's initiative have no estimate when they will be able to bring wireless coverage to the city's 590,000 residents spread across 49 square miles.
Boston's proposal aims to reduce the price of broadband Internet access for city residents from an average of roughly $40 a month to $15 by having the nonprofit act as a wholesale seller of network capacity to existing sellers of Internet access. Those companies could offer low-cost or free ad-supported online connections.
City officials hope that even if some Internet providers don't participate, they would face pressure to cut prices for the existing services.
"We've identified a highly disruptive business model," said Rick Burnes, one of three co-chairs of a task force that spent five months developing the proposal. "By harnessing new technologies and implementing a unique network model, we can eliminate much of the cost of delivering broadband, thus providing an inexpensive platform for entrepreneurs while also bringing cheaper service to underserved populations."