Minneapolis WiFi network profitable but city uses few services

Minneapolis' 59-square-mile muni-WiFi network has long been touted as an example of success as the network's owner US Internet has turned a profit.

That profit can primarily be attributed to the network's anchor tenant, the city of Minneapolis, which has a 10-year deal with US Internet to pay $1.25 million a year for services. However, city departments are complaining that the contract is hurting their already tight budgets. One third of Minneapolis' city departments don't use the service at all but are being charged for it, reports the Star Tribune.

David Roth, project manager in the city's information technology department, said the city will use about 6 percent of the $1.25-million worth of network capacity it is paying for. City planners estimate usage will grow to $175,000 next year, or 14 percent of its bill.

Meanwhile, US Internet has about 20,000 subscribers and is reporting a $1.2-million annual profit.

"The goal was to have 30,000 Minneapolis subscribers on the network in five years, which would have been 2012," Joe Caldwell, the CEO of USI Wireless, a wholly owned subsidiary of US Internet that runs the network, told the Star Tribune. "I think we're going to be a year off on that, but we're going to hit it." He attributed the delay to technical problems, winter weather and a shortage of sturdy light poles that were capable of supporting WiFi radios.

For more:
- see this Star Tribune article

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