When the Downtown Denver Partnership Inc. inaugurated free wireless Internet service on the 16th Street Mall a year and a half ago, it was trumpeted as a way to put downtown on the cutting edge of a virtual future.
But that vision came to a halt last month, as free Wi-Fi on the mall ran up against a weak economic model and the problems that have plagued free wireless experiments in cities from Portland, Ore., to Houston.
As of Nov. 1, business travelers, tourists and Denverites who want to connect to the mall’s Wi-Fi must pay a daily fee or monthly subscription, turning the grand experiment into little more than another version of services already offered by companies such as Starbucks or wireless providers such as Verizon.
The wireless operator “had anticipated they would have a better return on their investment through advertisements, and they were unable to reach advertisers,” said Kathy Weg ner, a spokeswoman for the Downtown Denver Partnership, a business-advocacy group.
Not that that operator, Kiva Networks, hasn’t gotten something out of the deal. The Downtown Denver Partnership continues to pay the maintenance and operations costs for the mall wireless network, essentially subsidizing what now amounts to a commercial venture.
In return, Wegner said, Kiva Networks keeps the cost somewhat lower than what some competitors charge. A daily fee is $4.95; the monthly subscription cost is $24.95.
Analysts say it’s hard to compare those services, however, because the $9.95 daily fee for wireless charged by a company like T-Mobile — which has hotspots in almost every Starbucks — allows users to sign on in hundreds of sites anywhere in the country. The downtown wireless is just that — limited to downtown.
And the monthly subscription fees for the two plans — the T-Mobile monthly plan is $29.99 — are just $5 apart.
Wegner wouldn’t say how much the partnership is paying for the network upkeep, but industry experts say those costs are usually far more than the initial installation of equipment, a cost Kiva Networks paid on its own.
Industry analysts say downtown Denver has company in seeing the abrupt end to free wireless. Like a series of crashing dominos, similar plans across the country have fallen to misguided strategies and a quickly changing market.
A similarly designed project that was to blanket all of Portland recently stalled with just a quarter of the network complete, and cities from Olympia, Wash., to Plano, Texas, have abandoned free Wi-Fi plans altogether in the past few months.
However, Denver International Airport last month began offering free Wi-Fi in the terminal and concourses, joining hundreds of other airports, including three in Colorado, in providing the service.
Clark Johnson, president of Colorado Wireless Communities, said the free-Wi-Fi model simply hasn’t played out as expected, largely because advertisers haven’t materialized.
Johnson said the Colorado Wireless Communities project — which will blanket 10 cities from Lakewood to Boulder — decided long ago that the free model wasn’t viable. Instead, it has contracted with a company that will earn money from various revenue streams — including charging subscriptions and providing digital phone service through the expansive wireless network.
“The free side of this is a tough nut to crack,” Johnson said. “In specific zones, like downtown Denver, it really comes down to the reasons for doing the (wireless) hotspot. If you’re doing the hotspot as a convenience to patrons and attracting people to an area, then you really just need to be prepared to swallow costs as part of doing business.
“But if you’re interested in someone making money on this, you have to have more than just free Wi-Fi to attract people and money.”
Michael Riley: 303-954-1614 or mriley@denverpost.com
