Where have all the Wireless ISPs gone?

Rachel Carlson wrote silent spring in 1962. She noticed a lack of Robins in her yard and eventually made the link back to DDT spraying.  Robins are again abundant, given a fighting chance they seem to prosper quite well.

Much like the Robins of 1962 , in the past 3 years,  I have noticed a die off in Business from Wireless ISPs.  Four years ago, I spent at least an hour or two a day talking to various WISPs around the USA. The mood was always upbeat, many were adding subscribers at a rapid rate. Today the rural WISPs of the US are still out there, but expansion and investment has come to a standstill.

Is the private investment drought by small rural WISPs due to the recession?

Certainly some of the slowdown is due to the weakness in the housing market; but as one operator told me a couple years ago, his customers will keep the Internet connection up long after they have disconnected their Television and Phone. Some consumers will pay their Internet bill right up to the last day of a pending foreclosure.

Much of the slow down is due to the rural broadband stimulus.

The Rural BroadBand initiative, seems to be a solution looking for a problem. From our perspective the main thing this initiative accomplished is subsidizing a few providers, at the expense of freezing  billions in private equity. Private equity that up until the initiative  was effectively expanding the rural market through entrepreneurs.

Why did the private investment stop.

It was quite simple really, when the playing field was level, most small operators felt like they had an upper hand against the larger prividers in rural areas for example

– They worked smarter using with less overhead using back haul technologies

– There was an abundance of wireless equipment makers (based on 802.11 public requencies) ready to help

– They had confidence that the larger operators were not interested in these low margin niche markets
With the broad band initiative several things happened

–  Nobody knew where the money was going to be spent or how broad the reach would be , this uncertainty froze all private expansion

– Many of these smaller providers applied for money, and only a few were awarded contracts ( if any) . Think of it this way suppose there were 4 restaurants in town all serving slightly different venues and then a giant came along and gave one Restaurant a 10  million dollar subsidy , the other three go out of business

Related article By the FCC’s own report it seems the rural broad band initiative has not changed access to higher speeds.

Prehaps someday the poison of select government subsidies will come to end , and the rural WISP will prosper again.

Update Nov 2011: It appears that not only did the rural broad band initiative freeze up the small home grown ISP market, but proves again that large government subsidies are a poison pill. Related article

By Art Reisman, CTO, www.netequalizer.com

Art Reisman CTO www.netequalizer.com
Art Reisman is a partner and co-founder of APconnections, a company that provides bandwidth control solutions (NetEqualizer) to
ISPs, Universities, Wireless ISPs, Libraries, Mining Camps, and any organization where groups of users must share their Internet resources equitably.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: