Annapolis going wireless, and it's free

Ads will pay for Internet network, a first in the U.S.


Annapolis is close to becoming the first city in the country to offer free wireless Internet access provided by a private company and paid for entirely by advertising - a model that analysts say could be adopted nationwide.

Unlike other cities with wireless networks - such as Philadelphia or Houston - the Annapolis plan carries no fees for users or investment by taxpayers. Instead, a local company, Annapolis Wireless Internet, will build the network and pay for it by selling local ads that users will have to view upon accessing the network.

The Annapolis network, which has been running in parts of the city since February, covers much of the downtown area and will expand across the entire city in the summer.

An official unveiling is planned for Saturday at City Dock, with Gov. Robert L. Ehrlich Jr. and other officials scheduled to attend.

In other cities, the municipality has paid to install and maintain the networks. But the Annapolis system is the first of its kind in the country, according to Ina Sebastian, an associate analyst at Jupiter Research who specializes in municipal WiFi, short for wireless fidelity.

That may be changing. Google and Earthlink last week announced plans for a network similar to Annapolis' in San Francisco that would be available free to customers. To pay for it, Google would use the wireless technology to pinpoint the location of users and track their Internet use, sending ads directly to them tailored to their location and usage.

Annapolis Wireless will sell local advertisements on its Web site that all users will have to view when they access the network. From there, one can freely use the Internet without further advertisements. The firm is working with Nortel Networks of Toronto, a company that sets up wireless hardware, to offer the service in Annapolis.

"There's zero taxpayer involvement, which gives us some flexibility," said Philip McQuade, president of Annapolis Wireless Internet. "You could easily compare it to radio. People listen to the radio with non-intrusive advertising, and that's what we've done to the Internet."

Annapolis Mayor Ellen O. Moyer said she was excited about the network and happy it was achieved without any cost to taxpayers.

"It moves us into the 21st century," she said. "Having this whole new system that makes it possible for everybody to communicate is great. We're on the cutting edge of a lot of things and we're proud to be a model in this case."

So far, the network is getting about 400 users a day, many of whom are boaters accessing the network on the water, but company officials predict usage will grow quickly in the coming weeks.

McQuade said potential advertisers were initially skeptical of the business model, but interest has lately picked up significantly. He said he expected to land deals with national advertisers soon.

For now, the company will continue to focus on Annapolis, but McQuade said he is interested in expanding into other major tourist areas in Maryland. Baltimore's Inner Harbor has free wireless access that was paid for in part by a city wireless company, although the network spans only about 1,000 feet and is touted as a pilot project.

Jason Brumfield, a regional manager for Nortel Networks, who has helped set up wireless networks in many cities, said Nortel is providing the hardware for the program as a partner and will get money only if the advertising model works. Normally, the cost for setting up a wireless network in Annapolis could cost as much as $250,000

"We're interested in doing it because, number one, we think offering broadband in municipalities for free or next to free is a really important venture for making a stab at the digital divide," he said. "We want to make sure these guys succeed, and we think this model can be replicated to other cities from a private business perspective."

Sebastian, the Jupiter Research analyst, said public networks are sprouting up all over the country, including in San Francisco, Houston, Philadelphia and New Orleans. Many companies also provide wireless service for a fee, but 58 percent of consumers only used public "hotspots" - or wireless networks - when they are free, according to a recent study she completed last month.

Use of WiFi is growing, she said, especially among business travelers. The reason is convenience: Users connect to the Internet without hooking up phone lines or other wiring. Their computers send and receive data through the air with small devices that operate like radios or cell phones.

Some businesses, such as Starbucks, have begun to equip their facilities with hotspots so customers can open their laptops and surf the Net while sipping coffee.

In 2005, only 14 percent of people who used the Internet had used a wireless hotspot, the Jupiter study found. More recent data estimates the number has climbed to 20 percent.

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