Connections in Government

— August 27, 2007

By Craig Settles

Businesses, take note. Municipal broadband--city- or county-wide wireline and wireless networks--not only helps governments operate more effectively, it can also help dramatically reduce costs and increase the value of mobile applications. This much-needed catalyst should move managers off the fence and have them deploying mobile workforce automation and asset management applications, particularly in small and medium-size companies.

While much of the publicity for municipal networks has centered around giving citizens free or inexpensive Internet access, the real ROI lies in two areas: enabling governments to operate more effectively and offering businesses high-speed access (1 to 2 Mbps or more download and upload) for $20 or $25 per month per worker.

Show Me the Money in Muni Broadband

To understand the financial impact for local government, consider these success stories. Merton Auger, city administrator of Buffalo, Minn., reports: "We did business planning for public works and public safety and determined that we'd have a five-year payback on the network. These included time and gas savings from not having to drive back and forth from the field to the office all day, and instant information access so mobile workers resolve problems sooner."

Business Unit Manager Leonard Scott in Corpus Christi, Texas, states: "We estimated our automated meter reading system to save over $1.6 million for the 20-year life of the application."

Charles Hewitt, CIO of Providence, R.I., estimates that its network, besides greatly improving the effectiveness of public safety personnel, will eliminate an hour at the beginning of each day and the hour and a half before quitting time that building inspectors spend commuting into the office. "The bigger impact is that we can complete inspections of building projects sooner and get those up faster," says Hewitt. "This helps the tax base, attracts new businesses and increases the velocity of investments because you finish projects faster and with fewer mistakes."

And in Concord, Calif., Director of IT Ron Puccinelli believes that "by consolidating all of our communications functions into one mobile device, we expect to save $180,000 based on our formal cost benefit analysis."

While some cities make headlines for less-than-stellar performance, these success stories are based on an understanding of the business case for muni networks.

Commercial entities use WiFi to wirelessy enable their people and physical assets that work primarily on the premises because of the resulting cost savings and improved efficiencies. Why pay recurring cellular wireless data costs for mobile workers when you own the infrastructure for wireless Internet or intranet access that's faster than cellular?

The workplace of local government employees is their jurisdiction's geographic boundaries. The city owns or can negotiate access to the infrastructure on which WiFi is deployed. Employee productivity and efficiency is greater with broadband rather than with slow cellular service. The cities' budgets don't take hits from per-worker or per-asset charges. "We spend $500,000 a year in cellular phone bills," says Scott, "so new WiFi-enabled handsets using VoIP over our network means we won't have to pay for minutes."

What distracts from ROI discussions is the hype. "Too often the focus is on fancy video services and free or inexpensive WiFi for consumers," says Angela Singhal, director of municipal wireless solutions at Nortel. "They are important, but applications such as public safety, digital video surveillance and advanced meter infrastructure [AMI] pay for these networks. They may not be sexy, but they are critical to success. For example, about $1.6 million can be recouped with an AMI deployment for 20,000 utility meters."

The Promise of ROI

Jim Freeze, senior VP of marketing and alliances for BelAir Networks assesses why municipal broadband is low on most companies' radar screens. "Businesses haven't gotten their heads fully around it yet,"  he explains. "It's a relatively new concept. This year a number of cities are completing their networks, and providers will be offering services specifically for businesses. Most don't view consumers as their only source of revenue."

As businesses realize muni networks provide a better cost-per-speed alternative than cellular networks, expect to see interest in mobile applications to increase significantly. Midsize and smaller companies are still hesitant, relative to their larger counterparts, to adopt wireless applications. At $60 per month per worker for upload speeds that are about twice that of dial-up, it is difficult to justify the expense when there is not enough symmetrical speed to run video, VoIP and other mainstream mobile applications.

Forrester reported in 2006 that in North America and Europe, small businesses most frequently were using wireless email (28 percent) and personalized contacts and calendars (25 percent). Fewer companies had mobile applications, with between 11 percent and 15 percent of SMBs adopting sales force automation, portals, customer facing applications and VoIP. Municipal broadband should change these numbers.

In a June 2007 survey of 300 economic development professionals sponsored by the International Economic Development Council, 42 percent of those professionals expect municipal wireless, and 47 percent expect municipal wireline networks, to directly impact and increase business productivity and competitiveness. Another 25 percent and 28 percent, respectively, expect an indirect impact.

"Once networks are in place, there will be a market for applications," states Donald Berryman, EarthLink's president of municipal networks. "Muni wireless offers a benefit that attracts small businesses, and I see them taking advantage of the technology with applications that reduce costs and re-direct the savings into expanding operations."

Motorola, which last year acquired rugged mobile device manufacturer Symbol, concurs. "Most businesses have WiFi and a lot have GPS capabilities on existing mobile devices, which makes them ready for muni networks," comments Craig Newman, market development manager. "We're on the cusp of finding the right applications that businesses can use with these networks. Field workers going into smaller towns and rural areas where muni networks are bringing wireless for the first time will really benefit."

Broadband is More than Wireless

Municipal broadband doesn't end with mobile workers and wireless. Freeze observes: "It's clear that providers plan to target businesses with T1 alternatives, similar to what happened in Galt, Calif. When they installed our network around malls for consumers, businesses in the area subscribed." Muni network vendors can install the service more cost effectively and with less business disruption. High-powered customer premise equipment from companies such as Ruckus Wireless ensure high-speed indoor coverage.

Berryman anticipates an end to some service redlining. "There are businesses in certain parts of town paying more for T1 lines than in other parts of town for the same service, which impacts where you can do business. Eliminating this produces additional cost reductions for businesses and brings more of them into the digital economy."

Wireline networks such as fiber may have more appeal for some than wireless. Fredericton, New Brunswick, in Canada, formed a co-op with 30 of its largest companies to lease the highspeed fiber network the city built. If one of them wants a fiber line between buildings, it's built. The city has also built a Supervisory Control and Data Acquisition (SCADA) system, for monitoring stations and the fiber backbone for a research center, none of which incumbent telecom companies would do because the market isn't large enough.

One perceived challenge to muni wireless adoption by enterprises--roaming--is becoming manageable. Vendors such as iPass enable seamless access to networks whose operators subscribe to its service. David Hawkins, director of business development for iPass finds "the gravitation by companies to WiFi is huge because of hotspots. To mobile devices with our software muni wireless looks no different than the typical commercial hotspots. We can roll the growing number of metros into the same service plans. The software records the session, iPass sorts out the billing."

Security is another reason for concern, but some believe this threat is exaggerated. "It doesn't matter how the client device gets to the main servers--cable, WiFi--they're all vulnerable," observes Imran Abbas, manager of the Solutions Architect Team for reseller CDW Government. "The real issue is how secure do you make office servers from attack?" Good security here protects an enterprise from public network threats. 

"You need a good understanding of what the security framework of the muni network is," adds Joel Vincent Sr., manager of outdoor wireless systems for Cisco Systems. "It's similar to an indoor network where you're trying to determine how you keep HR data, for example, mobile but also private from the rest of the enterprise. You have to be sure, when authenticating, that what people can do on the government or enterprise side of the network is different than what they can do on the general public areas."

For addressing client-level vulnerability, Abbas recommends requiring multiple methods of authentication, high-level data encryption and compartmentalizing users' access. "As an engineer I should not have access to HR records. So even if a laptop is compromised, thieves can do limited damage. Of course, muni network designers should incorporate high levels of security as well."

As managers begin planning their mobile strategies for 2008, and the number of cities with muni broadband increases, these networks should definitely influence decisions. We may very well see a lot of the fence-sitters coming down firmly on the side of these local government initiatives. //

Craig Settles is president of the Bay Area consultancy Succesful.com.

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