By Tom Steward | Watchdog Minnesota
CHASKA — One of the nation’s first cities to enter the Internet provider business may soon exit, confronted with the reality of plowing millions of dollars to upgrade its aging Chaska.net WiFi network to remain competitive in a fast-evolving digital marketplace.
Technology that used to be cutting edge no longer necessarily cuts it with a steady stream of innovations like 4G and smartphones.
“It’s less about should we sell Chaska.net and it’s more do we reinvest into that next level of technology or do we think our goal of being a connected community has been met?,” said Chaska City Administrator Matt Podhradsky. “Are there enough private sector options where it doesn’t make sense as a public sector entity to move into providing a next level service?”
Chaska.net now serves 1,400 subscribers, or about 13 percent of the southwestern Twin Cities suburb’s households, down 33 percent from a peak of 2,100 customers a few years ago. Billed as the first municipal Internet utility in the country, Chaska.net started out providing fiber optic high speed service for the city, schools and some businesses back in the dark ages of the worldwide web — 1998.
“By 2004, that’s really when we got our entire network up and running, at that point we were the first city in the U.S. to provide residential WiFi to all residents in the city,” said Greg Boe, a Chaska city councilman. “That’s something we’re very proud of. We did it to fill a need that wasn’t being met to provide for our residents a low-cost alternative because back then, it was modem access and there was really little or nothing as far as high-speed online.”
The city deployed a WiFi mesh network over 16 square miles, offering wireless broadband service to all 18,000 residents for $15.99 per month. Police officers, building inspectors and other employees were furnished with WiFi connected laptops and other devices.
The muni-network breaks about even on annual operating expenses, but has spent $3.3 million on technology infrastructure since its inception, including $2.1 million for dozens of WiFi cells and other equipment for the wireless system. Officials say those funds came from the city’s electric utility and were partially offset by an unspecified amount of in-kind broadband services provided to city offices and operations.
Now city hall faces a daunting $2.5 to $3 million bill to upgrade the system by 2015 to meet technical support requirements from the manufacturer. The deadline prompted the community to reexamine the feasibility of operating a citywide WiFi network that could siphon city funds needed for other priorities. The city already subsidizes two golf courses and a community center that rack up hundreds of thousand dollars in deficits annually.
“We’re looking at some fairly substantial costs that would be a burden to the taxpayers of Chaska and to the city funds,” said city councilman Jay Rohe. “Personally I’m just not willing to go forward and make that investment at this time given all the options that are available to the people of Chaska when it comes to high-speed Internet. So I believe we probably should move forward in the process and look at a potential sale.”
The city is considering privatizing the wireless portion of Chaska.net, including access to the utility’s towers, poles and subscribers. The fiber optic service would remain intact.
“There’s no question that a direct connection to cable or a direct connection to fiber or DSL provides a much more reliable connection than any type of wireless connection will,” Podhradsky said. “It used to be the pricing was just out of the market for most of our residents to be able to afford and that is not the case anymore.”
A decade after its heralded debut, Chaska.net WiFi service could soon go the way of the rotary telephone. No decision will likely be made until 2014, but momentum seems to be building toward taking the ground-breaking WiFi offline. “It’s at a point where we need to decide if we want to because we have to pony up some money to bring it up and I really think we’re leaning toward not doing that,” Boe said.
Contact Tom Steward at [email protected]