Less than a year after its plans for citywide Wi-Fi coverage appeared doomed to failure, Rio Rancho, N.M., is now home to what is believed to be the world's first metrowide voice over Wi-Fi network, which went live last week via wireless ISP Azulstar Networks.

Developed in conjunction with voice-over-IP technologies developer Ecuity Advanced Communications, Azulstar's voice over Wi-Fi service began operations across about 65% of Rio Rancho. The company will offer fixed service for residential and business customers as well as mobile service, with pricing for residential customers set at $29.95 per line for unlimited calling within the U.S. and Canada. Azulstar's business phone services include four-digit inter-company calling, a fax line and a soft PBX, which enables a suite of centralized call controls. According to Azulstar CEO Tyler van Houwelingen, the handful of businesses that have signed up for service are enjoying an average savings of 60% in comparison to what they were paying for voice service from a traditional provider.

“We've beaten out any other citywide Wi-Fi network by a significant margin,” van Houwelingen said. “The technology we're using here is very cutting edge. None of it goes over wires. If you look at Vonage or any other VoIP service, it's got to go over a broadband connection, but everything from us transmits to some 200 access points set up around the city. There's a pre-WiMAX transport from each access point back to our network operations center, and from there we terminate it onto the public switched telephone network.”

According to van Houwelingen, Azulstar's Wi-Fi network will cover roughly 96% of Rio Rancho within the next 30 to 45 days — the remainder of the city comprises new residential developers the company cannot serve until officials install the light poles where it can mount its access point equipment.

That's a far cry from the summer of 2004, when Rio Rancho's proposal to build a citywide Wi-Fi network ground to an abrupt halt. When city leaders first resolved in November 2003 to develop the network, receiving technical assistance and vendor evaluation from Intel (whose Fab 11X computer chip facility calls the city home), they selected broadband services provider Usurf, which agreed to cover the projected $2 million buildout cost. Just two months after its launch, Rio Rancho officials terminated Usurf's license on grounds the company's revised business strategy no longer complemented the kind of network the city desired.

Soon after, the Rio Rancho City Council voted to approve a new agreement with Azulstar, which had just completed a Wi-Fi deployment spanning its native Grand Haven, Mich.

“I would look for some really neat services to begin running here in Rio Rancho — many of them are already in pilot,” van Houwelingen said. “Other cities are still trying to figure out the business model and how the network goes, but the real issue is what you can do with these networks, and that's where we feel we're getting further and further ahead of the competition.”

But according to John Yunker, president and chief analyst with Byte Level Research, companies like Azulstar face stiffer competition from rival wireless technologies than from rival Wi-Fi providers. “My biggest concern if I were in the business of doing VoIP over Wi-Fi is WiMAX,” Yunker said. “It's technologically feasible, and it's easy to see the need for these types of services, but I can't say the business model will work with WiMAX coming.”

Yunker also cited concerns with quality of service. “Consumers might be put off, unless there's significant cost savings,” he said. “If you're trying to give them voice that's not significantly less expensive than what SBC's charging, it's a tough market.”

RIO RANCHO WI-FI

November 2003

Rio Rancho officials resolve to launch metrowide Wi-Fi network.

May 2004

Rio Rancho selects service provider Usurf to engineer, implement and deploy wireless infrastructure.

June 26, 2004

Rio Rancho and Usurf officially launch project, commemorating event with a picnic dubbed “Your Wireless Window to the World.”

August 2004

Rio Rancho terminates Usurf's contract, begins search for new service provider.

November 2004

Azulstar secures 25-year lease agreement to deploy Wi-Fi service in Rio Rancho.

Jan. 5, 2005

Azulstar turns on its first Rio Rancho Wi-Fi subscriber.

May 5, 2005

Azulstar launches voice over Wi-Fi service.