William E. Beck is deputy chief information officer and director of business technology development for the city of Minneapolis. He has also headed up the city’s broadband wireless initiative, begun in mid-2004. Beck spoke with Editor-at-Large Carol Wilson about that initiative.

What led Minneapolis to take the approach it is taking to broadband wireless?

We have been working on this for almost two years now. We began about a year and a half ago. It started with a couple of smaller municipalities that were moving toward wireless or had implemented wireless broadband services--Chaska, Minn., was one. There was an attempt at our park board meeting to try to get broadband into the parks, and that caused the council to decide to look at broadband wireless service options. We were told to go and investigate what’s real, what’s not real and come back with recommendation. That’s how we began the journey.

We tried to get a broad picture of what other municipalities, cities and states were doing in terms of broadband and what kind of models they were using. We also looked at potential risks in terms of what we were hearing--legislation moving forward and litigation associated with the telcos and the cable providers.

As a result, what we saw boiled down to three options. One was public ownership. Most cities were looking at some form of public ownership because of their experiences with telcos and cable providers, who were primarily focused on areas that were profitable for them. As a result, there were areas within the municipalities that were unserved or underserved--areas that were low income or geographically difficult to get to, with small populations.

When larger municipalities took this approach, telcos and cable providers stepped in and immediately filed lawsuits for unfair competitive practices, because the city was unfairly subsidizing. In Chaska, for instance, the subsidy is $16 a month, but that’s a very small area--about 22 miles with about 12,000 people. Telcos and cable operators aren’t going to file a lawsuit there.

Because they don’t want to offer broadband in those areas anyway?

Exactly. But Minneapolis is one of the larger cities. We were already in litigation with Time Warner--we had sued them for breach of franchise--and Qwest was already lining up to take us on just because of the rumors, and we wanted to avoid that.

So we looked at other models. One of the others is to have a provider come in and build it out and own it and operate it and basically then the city would buy services on that network. The third model was a public-private partnership--it’s the same model as the second one, but city has more of a governance role. For example, we determine the servicing of the business community and underserved areas.

What we chose to do was a public-private partnership model. It looks a lot like the second alternative. We then put together a number of committees to assess community needs--business and residential--and to look at what we call digital divide issues.

The first part of the RFP was specifically based on the institutional needs of the city--to meet the needs of the police, fire, inspectors, public works--all of our wireless needs but our fiber needs as well.

Contrary to popular belief, there is a lot of fiber in a wireless network, for backhaul. Plus, if we are going to meet all the institutional needs of the city, that means serving some buildings with 200 to 300 people in them, and you need the bandwidth of fiber to service those facilities.

The second part of RFP was focused on desired needs--residential needs, business needs and digital divide needs. We put all those in there.

The third section focused on the providers’ business model. We knew they would have to produce revenue to keep costs down. Where they are going to make their money is not on increasing the price of access but on value-added services. Plus, we wanted to see a wholesale model that allows open access to the 200 local hot spots we already have. Rather than excluding them, we want them to be included, to expand their business opportunities, not put them out of business.

The goal is to create border-to-border seamless local coverage, with open access so you can go anywhere in the city--offices, a hot spot, a park--and use the same sign-on. If T:Mobile has a hot spot, then it is signed up with the city network. We don’t have to have a separate sign-on.

At the time we put together this RFP, we were attending conferences to get a bead on what other cities were doing and where the industry was going. We attended the Wi-Fi conference and there the answer to everything was Wi-Fi, then the FTTP conference, and that’s where all the fiber zealots were, and then the WiMAX conference, with all the folks leaning toward WiMAX as a major component of the solution.

I said, I don’t care about the technology. We have to get beyond the religious debates. My solution needs to include all three.

So then you put out the RFP--what was the response?

People wanted to know what kind of medication we were on and if we were willing to share. We thought it was outrageous and no one would show up. We’re all dressed up--would anyone take us to the dance?

So we held a vendor conference--90 vendors came, 160 people, they were standing in the hallways. It was much more than we expected. We had 22 vendors sign up as prime contractors, nine actually submitted proposals and we narrowed that to EarthLink and U.S .Internet, and started due diligence last October.

Each vendor will be doing a one-square mile pilot to demonstrate their ability to deliver solutions for our institutional and business needs. They will also have to do one demo for how they are going to support residential, business, all of the above. They are working on that now, and expect to light up the pilots in early March. We will run that for 60 days, then select a vendor for the city wide network, which is 59 square miles, 385,000 residents and 160,000 households.

One of the criticisms of muni broadband networks that aspire to help underserved communities is that it doesn’t do any good to provide broadband wireless if people don’t have computers. What are you doing to address this aspect of the problem?

We have from the beginning of this program engaged a group called the Community Technology Empowerment--it’s part of the Americorp branch of the federal government--move forward with an approach to digital divide. It’s not just a matter of getting computers--we can get more computers to the underserved parts of the community than they can consume. It’s not a technology issue. You can give someone a computer and many of them will put them in the trunk and sell them, because that’s the value they have.

We have taken a different approach. We believe that we can get technology to them--the computer is literacy. What we are focusing on is literacy. We are looking for an approach where the provider brings localized content to specific communities to get city services through this network--so they can look at their children’s report cards and homework, for example--to give them a reason for using the service. Then we believe that once they find out how to do that and start experiencing the value of using this communication and the capability, it will grow and expand.

We have a very diverse community--there are seven languages in the city--and that creates some challenges in terms of limited English proficiencies in the city. Because content can be localized, we can create community content zones where you can tailor a neighborhood portal to the Somali community in their own language. It’s a bit unique from what other cities are doing.

You have to give people a compelling reason to use the computer. If I can get a dog license, if I can get my children’s report cards, if I can get a remodeling permit, get my benefits, my welfare benefits, my health care, then I will use it.

You mentioned looking at the service providers’ business plans. What kinds of value-added services are you expecting them to offer?

They are being very creative. For example, there is meter reading. Xcel Energy is very interested in this, they are our electricity provider in Minneapolis. For a very low cost, they can do remote meter reading and energy control.

Telephony services is another area--there are any number of creative ways of using that network to provide additional services to businesses, the residential community, as opposed to the cable companies and the telephone companies. Plus, these people are looking at the underserved parts of the community as a potential business opportunity, an untapped subscriber base.

Did the incumbent service providers--Qwest and Time Warner--participate in the process?

We went out of our way to encourage them to participate. They were at the vendor conference. We have had an adversarial relationship with Time Warner for many years because of franchise violations. They are now going to transfer ownership to Comcast as part of the Adelphia deal. The whole point was they came to the vendor conference, and said ‘We are going to both submit a proposal and sue you at the same time’--but they did neither. AOL was very interested but Time Warner shut them down. They just disappeared.

What about Qwest?

Qwest’s reaction was that we were going to be competing directly with them. We asked them to come in and give us a proposal and be part of the solution. They did submit a 30-page proposal that basically said the city is being foolish, that we should build on Qwest’s current capability and wait for them to develop these services.

Have there been any lawsuits?

Qwest did hire outside counsel that is currently doing a document search. Their position is that our RFP process was unfair--that we didn’t provide enough information for them to submit a reasonable proposal. They have filed 12 lawsuits in other states over municipal projects.

Has there been any political reaction, either by regulators or the legislature?

It’s been fairly quiet--we haven’t seen any legislation introduced to try to prohibit cities from doing this. We have been watching that at the federal level--there are measures that are very restrictive.

We have been trying to keep a low profile. When we issued our RFP we were very careful how we labeled it. We said we were looking for broadband IP data access services. That avoided any implications that it was for cable or for telephone services. We wanted to stay in the unregulated space. As soon as we got into something that looked like a cable franchise agreement or a telecom infrastructure, we knew there would be opposition.

We were very careful in terms of how we positioned our problem. In reality, we are looking for someone to come in, finance, build out, manage and sell services.

What about the city’s service needs.

The city’s specifications for this network are significantly greater than what a company coming in and just building out a residential network would be. This has to meet our public safety needs--that means the network is up 24-7, 365 days a year with minimal outage and it is seamless, border-to-border. If I have police cars and fire trucks running around depending on data connectivity, then it has to be there. When there is an outage, it has to be very brief.

Then they layer residential and business services on top of it. Those customers benefit from the increased reliability that the city requires. It costs vendors no more to provide that level of service.

What kind of bandwidth are you requiring?

We are looking for symmetric one megabit consistently, with up to 3 Meg available. We believe we will have a guaranteed 3 Meg soon and in five years, 100 Meg. We believe the technology--the way it is moving--will support that.

So by going with an outside provider, you have avoided a lot of the potential political and legal problems?

Our reasons, quite honestly, were, number one, financial. The city could not afford to do this on its own. We can’t build a network that costs $25 million up front and needs replacement in three to five years because that’s how the technology is evolving.

Also, we are not in this business. We could put the infrastructure in and technically support the technology, but we don’t know how to market and sell it. If we do get into that business, we are competing directly with the private sector.

The city let us know up front that we have no money to do the planning, we will get no capital and we cannot increase the operating budget in any way.

I believe the landscape is changing, that in 10 to 15 years, there are going to be a whole new group of communication providers out there. You are not going to see the big telcos or cable providers--I think they are going to be gone. It’s going to be the entrepreneurs who are going to build a business around value-added services.

In five years, I want to see the access free, or around a couple of bucks. We want to drive the cost of access down and build up the value-added services.

We will never do free. The reason is that it says it has no value. Even for our underserved parts of the community, there is going to be a cost. There are all kinds of ways we can subsidize that.

Are a lot of other cities interested in what you are doing?

Absolutely, I’m getting 10 to 15 calls a week.