Wi-Fi in Toronto: Should it stay free?

A not-for-profit group offering free wireless at local retailers and public spaces across the City of Toronto says Toronto Hydro Telecom‘s wireless initiative, set to launch at the end of next month, is essentially a move to compete with what Rogers and Bell are already offering.

Community Wireless Toronto, which began in April 2005, offers free Wi-Fi hotspots at 15 locations in Toronto, including The Centre for Social Innovation, St. Lawrence Market and Lettieri Espresso Bar and Cafe. Other city projects across Canada that offer free wireless include BC Wireless, Ile Sans Fil (Montreal), Ottawa-Gatineau WiFi and WiFi Winnipeg.

“In other cities similar projects have talked about it as a way to get low-income residents online, and there’s none of that language around the Toronto Hydro project,” said Gabe Sawhney, Wireless Toronto volunteer and co-founder. “It’s strictly a business initiative that’s meant to allow the city to use their infrastructure to allow to compete with Rogers and Bell.”

Back in March, Toronto Hydro Telecom, the telecom subsidiary of Toronto Hydro Corporation, which is fully-owned by the City of Toronto, announced it will provide Wi-Fi coverage in the downtown core of Toronto, with the first area (from Front St. to Queen St. between Spadina Ave. and Church St.) to be completed at the end of June. Toronto Hydro Telecom says the Toronto Wi-Fi zone, which will cover 10 square kilometres upon completion in December, will be the largest in the country, rivaling that of other Canadian cities such as Fredericton and Waterloo, Ont., which have rolled out their own public Wi-Fi services. From the end of June until Dec. 31, 2006, customers will be able to access Wi-Fi hotspots for free using their laptops or mobile devices such as PDAs. After that, Toronto Hydro Telecom, which did not provide pricing details, will offer the service at “competitive rates.”

Toronto Hydro Telecom’s March announcement followed a series of Wi-Fi launches. Last October, Bell Canada announced it would build out Wi-Fi infrastructure for Starbucks shops in Canada, including 140 in Ontario for a total of 400 across Canada to be implemented over a one-year timeframe. The service costs a user an average of $7 or $8 for a one-hour session that is charged to their credit card. Second Cup coffee shops also offer a hotspot service through Rogers for around $10 per hour. VIA Rail last December announced it would provide wireless access to customers traveling in the Quebec-Windsor corridor at a cost of $8.95 for a 24-hour period.

David Dobbin, president of Toronto Hydro Telecom, which is providing 100 per cent of the funding for the project, said he has heard of Wireless Toronto but doesn’t understand its business model. Wireless Toronto, which was founded just over a year ago, asks retailers and public spaces interested in offering Wi-Fi to purchase a router (for approximately $80 to $100) and use their existing Internet provider to provide the connection.

“Free is pretty difficult to earn a financial return on,” said Dobbin, who was chief operating officer of Ottawa Hydro when it rolled out its own Wi-Fi initiative a couple of years ago. “It’s pretty hard to get a bank loan when you’ve got no revenue.”

Wireless Toronto was modeled after a similar initiative in Montreal called Ile Sans Fil, which offers free wireless in cafes, stores and community organizations across the city. Like Ile Sans Fil, Wireless Toronto provides community-related information about the location where users are accessing the Internet, such as the history of the area. Both organizations also use an open source software program called WiFi Dog, which was developed by Ile Sans Fil, to run and maintain the network.

Toronto Hydro Telecom’s goal, on the other hand, is very different from that of organizations like Wireless Toronto, said Dobbin.

“The people who use the network own it,” he said. “That’s great, but we’re trying to build blanket coverage here.”

Dobbin added Toronto Hydro Telecom has also explored the option of offering free wireless with advertising footing the bill, but said the telecom subsidiary hasn’t come up with a successful business model for that idea yet.

Sawhney said Toronto Wireless has attempted to contact Toronto Hydro Telecom through a personal contact who works there and has also made appeals to City councilors and the City’s economic development committee. But Sawhney fears it’s probably too late for a possible collaboration.

“The roll out schedule has been established and the budgets are already in,” he said. “I worry that that may not be possible.”

Once completed, Toronto Hydro Telecom’s zone will span east to west from Spadina Ave. to Jarvis St. and north to south from Bloor St. to Front St. that will extend 10 metres inside building walls. The service, which will utilize mesh Wi-Fi technology that is capable of transfer rates of up to 54 megabits per second, will be made available through a series of access points attached to street lampposts. On Monday, Toronto Hydro Telecom announced that it had selected Siemens Communications Group, a division of Siemens Canada Ltd., to install the radio access points.

Prior to Toronto Hydro Telecom’s announcement in March, the City of Toronto had issued an RFP about a year ago for a vendor to provide a business case that would warrant free wireless access to users in public spaces such as Nathan Philips Square (which is included in Toronto Hydro Telecom’s zone) and Mel Lastman Square. Toronto Wireless submitted a proposal to that RFP but it was rejected, said Sawhney. The City had selected the vendor, which it declined to name, but didn’t pursue the project once Toronto Hydro Telecom went public with its plan.

“There was a sense between us and the successful proponent that we could get the same information through Toronto Hydro that they were willing to offer us,” said Michael Franey, director of computer operations services for the City of Toronto.

With a municipal election on the horizon this fall, Franey said it’s too early to say whether City Council will approve free wireless in public spaces.

“What we want to do is take the information coming out of the (Toronto Hydro Telecom pilot) and create the business case to see if it is cost justified to continue that type of concept across some of the public spaces,” said Franey, adding that the City hasn’t thought about blanketing the City or competing with Toronto Hydro Telecom. “That would have to be a policy directive set by City Council.”

Franey and other City staff in the IT department, will use the pilot project as an opportunity to look at how people are using the Internet such as searches or to send and receive e-mail. From there, Franey said his department will make a recommendation to City Council as to whether or not to proceed with it. That document, however, will not likely appear in the hands of councilors until late winter or early spring, he added.

Comment: info@itbusiness.ca

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