Sydney - municipal broadband

Free city broadband quietly shelved

The State Government would have known a year ago that its promised free wireless broadband network for the Sydney business district and surrounding centres was unviable, analysts said, but chose to announce its decision to scrap the project on the day six people were killed in the Sydney Harbour boat tragedy.

The Minister for Commerce, Eric Roozendaal, quietly announced last Thursday that the Government had evaluated proposals from 15 providers keen to build the network but concluded it was not practical based on technical and financial grounds. The emailed press release was sent to technology writers but political reporters did not receive it.

This came almost a year after Mr Roozendaal said the Government was in the "final approval stage" of selecting a supplier to build the network, which would provide free internet access to anyone within range.

A spokeswoman for Mr Roozendaal said the decision to scrap the network was announced on the day of the boat crash because that was when the decision was made and "because of the commercial nature of the decision" the announcement had to be made immediately.

Analysts agreed that asking the private sector to build a free wireless network funded largely by advertising was fraught with difficulty, but said this should have been apparent to the Government a year ago.

One telecommunications company that expressed interest in building the network, Unwired, rejected Mr Roozendaal's core justification that it would expose taxpayers to tens of millions of dollars in losses, saying its proposal would require next to no extra Government funding. Unwired's chief executive, David Spence, said all the company required from the Government was access to building infrastructure such as rooftops. Unwired has more than 100 free wireless hot spots dotted across Sydney - running under the uConnect brand - and would use some of this existing infrastructure. The network would be funded by advertising.

Overseas, free municipal wireless projects - promised for US cities such as San Francisco and Philadelphia - have failed largely due to the complexity involved in spreading coverage across a broad area, difficulties in maintaining signal strength inside buildings and the presence of competing paid-for wireless broadband service provided by telecommunications companies, Gartner's mobile and wireless research director, Robin Simpson, said.

But other similar projects in Paris and Hong Kong have been relatively successful, as advances in technology have made setting up municipal wireless networks more affordable.

Mark Novosel, telecommunications market analyst at IDC, said the project "sounded like probably an election promise to get them over the line more than anything else" and the Government would have known if the project was financially viable even when it first announced the project at the end of 2006.