This is not surprising, given the poor track record of these ventures.  A previous attempt to bring municipal Wi-Fi to Sacramento failed in June 2006 when the city's vendor found that the business model was not "financially sustainable."  The leader of Sacramento Metro Connect, Azulstar, is also no stranger to muni Wi-Fi failure. 

Officials in Rio Rancho, NM last month terminated the city's contract with Azulstar when they could not provide a financially viable business plan.  On a much larger scale, Azulstar's ambitious plan to connect all of Silicon Valley is mired in delays, leading the effort's organizer to declare "we don't have a business model here."  

In August, Earthlink reneged on its plans to make San Francisco the first large city with ubiquitous Internet access (see Sonia Arrison's tech blog post).  In a PRI study published last February, "Wi-Fi Waste: The Disaster of Municipal Communications Networks," a survey of 52 municipal Wi-Fi networks did not reveal a single successful example.  In almost every case, these services fail to compete in cost and quality with privately run competitors.  Despite the fact that Metro Connect defaulted on their contract over a month ago, the Sacramento city council refuses to pull the plug.

City officials are willing to tolerate delays and cost overruns because Metro Connect has agreed to shoulder the entire up-front price of construction and deployment.  This does not shield taxpayers from paying to clean up the mess.  Once the network is completed, Sacramento has agreed to serve as an "anchor tenant," purchasing the city government's Internet service exclusively from Metro Connect, regardless of cost or quality.  The term "anchor tenant" is therefore only a euphemism for ‘taxpayer subsidy.'  In the end, taxpayers will be charged inflated prices for substandard service.

Given the extensive evidence that large public wireless projects fail to compete with private Internet providers, advocates of municipal Wi-Fi are beginning to change strategy.  They argue that these networks can be successful if they tailor their services to the needs of city governments.  Sacramento Metro Connect aims to target applications which will improve city services, such as utilities and law enforcement. 

As long as commercial broadband providers offer competing products, government-run subsidized versions will continue to lag in both cost and quality.  The strategy employed by Metro Connect would be akin to having the city subsidize the construction of an automobile factory for the purpose of producing police cruisers. 

Sacramento does not suffer from a lack of high-quality, affordable broadband services.  Nielsen/NetRatings has ranked Sacramento among the top five cities in the country for home broadband use.  Sacramento is also home to the nation's fastest internet service.  Allowing the Metro Connect project to proceed will not only waste taxpayer money, but could potentially discourage entry of new commercial services into the market.  Limiting competition will slow the deployment of innovative new commercial networks, and could damage Sacramento's standing as one of the nation's broadband leaders. 

The city council should immediately inform Metro Connect that they are in default of their agreement.  After 45 days, Sacramento can terminate the contract and end this failed experiment once and for all.