San Marcos balks at municipal WiFi

The city of San Marcos is having second thoughts about a citywide WiFi plan due to the potential cost.

Two years ago, San Marcos city leaders were eager to get a wireless network started. Like leaders of other cities, they expected that a private company would build the network at no cost to the city. Now, many of those city leaders -- faced with a new industry business model that asks cities to pay for network construction and to hire private companies to operate them -- are putting their wireless projects on hold or pulling back entirely.

On Tuesday, the San Marcos City Council decided to continue negotiations with two private companies. But the $2.5 million to $5 million cost for a wireless network to cover the city's 25 square miles is giving some leaders second thoughts.

"Four to 5 million dollars makes me itch a bit," Council Member Chris Jones said.

For comparison purposes, the somewhat-larger city of Houston voted to spend $2.5 million over five years back in April. One way or the other, that's really saying something about where this sort of project is these days.

San Marcos is pursuing different options with two companies, Maryland-based Solutrea and Austin-based Blue Moon Solutions. Solutrea is proposing a wireless network that follows the older business model in which a private company owns the network and charges the city to use it. Blue Moon Solutions is proposing to operate a network owned by the city.

Cooper said the latter proposal might be a better deal for the city because it results in a moneymaking asset. If San Marcos decides to pay to build the network itself, the city could need to find as much as $5 million in savings and new revenue over five years to break even on the project, Cooper said. At the same time, the wireless network could save San Marcos $2.2 million, he said. The city could earn another $4 million by "renting" space on the municipal wireless network to other companies and retail customers.

Other possible benefits of a municipal wireless network, such as lower crime rates, attracting businesses and forcing down rates charged by other Internet service providers, are harder to gauge, Cooper said. A municipal wireless network could help San Marcos brand itself as a "smart city, a digital city," he said, and attract some well-educated workers and high-tech businesses already drawn to Austin.

Council Member John Thomaides acknowledged the importance of attracting the "creative class" to San Marcos, but said, "Is this the best way to go about it?"

It's a little harder to argue for that now. I still think the basic idea is a good one, but it's clear there's a lot of bugs left to be worked out.

Posted by Charles Kuffner on January 27, 2008 to Technology, science, and math