AT&T backs out of plan for free citywide Wi-Fi in St. Louis

~ The chief problem was AT&T engineers couldn't find a cheap way to power the network's transmitters.

ST. LOUIS -- Blaming the high price tag, AT&T Inc. is disconnecting its plan for free citywide wireless Internet service in St. Louis.

The telecommunications company said Friday it has scrapped its plan, announced in February, to blanket the city's 62 square miles with Wi-Fi signals, the wireless Internet service now found in airports and coffee shops.

Instead, AT&T said it will build a pilot project in the downtown core and expects to have it in service early next year.

"It's a setback," said John Sondag, vice president of external affairs for AT&T Missouri. "We're disappointed. But we will still learn something."

St. Louis joins San Francisco, Houston and Chicago as cities where citywide Wi-Fi, which backers say would improve municipal and economic efficiency and ensure everyone had fast access to the Internet, has run into problems.

Under the plan announced in February, AT&T would build out the wireless network across the city over two years. It would then provide free Internet service to everyone for 20 hours a month and then charge for more time or higher download speeds.

The city would provide access to its light poles to act as transmitters, but wasn't obligated to pay anything. Still, city officials planned to spend $400,000 a year for a special public-service network that could be used by police, meter readers and other city workers.

The chief problem was AT&T engineers couldn't find a cheap way to power the network's transmitters, which carried the network signal and sent it to people's computers. One estimate required 50 transmitters per square mile.

They initially planned to mount the transmitters on city streetlights, but some of those don't have power during the day. They also experimented with Ameren utility poles, but they didn't always provide the straight line of sight necessary to send signals to a computer. Other unsuccessful options were mounting the transmitters on stoplights and buildings and even attaching a battery.

"We'd have spotty coverage at best," Sondag said. "And that's something neither the city not AT&T wanted to do."

City officials could rewire the city's street light poles to provide 24-hour power, but that would be too expensive.

"It can be done, but we don't have $28 million lying around to do it," said Michael Wise, the city's director of information technology services. "And if we did, we'd be spending it on something else."

The other problem is how to make money from a municipal Wi-Fi network, which can cost up to $200,000 per square mile to build. Such networks face growing competition from home broadband access, cellular phone companies boosting their own wireless Internet services and the development of new technologies, such as Wi-Max, a more powerful version of Wi-Fi.

"Down the road, there may be a different business case," Sondag said.

Network 1 Communications is showing some success with wireless Internet by thinking smaller. The company last week launched a service in northern O'Fallon, a St. Louis suburb, and is attracting subscribers.

"It's running well," said Mark O'Neal, vice president of sales for the Fenton-based company, which plans to build out the rest of O'Fallon by early next year and is talking with other municipalities. Network 1 has cut down on the cost by using cheaper transmitters and has avoided problems with power access.

AT&T is also not giving up and hopes to have 70 transmitters in downtown St. Louis. The network, which will have consumer access and dedicated bandwidth for city services, will help company officials determine what works and how to pay for it.

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Information from: St. Louis Post-Dispatch, http://www.stltoday.com