Yet another muni WiFi project has foundered on the rocks of NoBusinessModel. WiFi vendors don't mind overselling the benefits of free WiFi, because their business model usually involves getting the local government to take all the risk. In some cases, local governments are putting up hundreds of thousands or even millions of dollars for WiFi systems that have yet to prove themselves.
In other cases, the service provider may put up most of the equipment, but gets an exclusive franchise, meaning no competition and no service alternatives. The companies that thought free WiFi could be supported by ads are finding out that that is a tough business to be in.
Waukesha, Wisconsin can be added to the list ever growing list of cities that have had a wireless service provider pull out because there was no money in free WiFi. Chicago, San Francisco, Philadelphia, and Houston have all had to pull back on wireless plans recently. St. Cloud, Florida has been trying to give away free WiFi service to residents with little success; residents have complained that the wireless system is slow and unreliable compared to fee-based copper systems (DSL and cable).
Wireless services have a place in every community. We all want our wireless devices (phones, iPhones, PDAs, etc.) to work wherever we are. But wireless by itself is an incomplete solution. With countries like Japan rapidly building out 100 megabit fiber systems, having only low speed wireless is not going to help a community's economic development future.