Several Canadian cities are watching with interest as a Toronto Hydro Corp. subsidiary moves forward with plans to provide the downtown - and eventually the entire city - with wireless Internet coverage.
Limited wireless-fidelity coverage, or Wi-Fi, has been available in numerous Canadian cities at restaurants, coffee shops and other public "hotspots" for quite some time.
Toronto Hydro Telecom's plan, however, is believed to be the largest proposed seamless network in North America, and would put the city ahead of similar projects in Philadelphia, San Francisco and London, England.
Toronto Hydro workers began installing transmitters on top of selected street lighting poles in the city's downtown financial district almost immediately after the announcement last month.
Toronto Hydro recently purchased the City of Toronto's poles for about $60 million. Officials expect to have the downtown core finished and operational by the end of this year. If all goes according to plan, the entire city would have Wi-Fi coverage within three years.
The installation cost is expected to be less than $10 million, David Dobbin, president of Toronto Hydro Telecom, a wholly owned subsidiary of Toronto Hydro, told a news conference for the announcement last month. He declined to discuss further details about the cost and what the service would cost users.
"We're still working out those details, but it will be a great deal for the people of Toronto," he said.
Mayor David Miller said the idea signalled "the beginning of a new era of telecommunications in the City of Toronto."
City of Vancouver Coun. Peter Ladner says his city is interested in what Toronto is doing with citywide Wi-Fi. He adds council has already asked the city's information technology department to prepare a feasibility report and present it within the next two or three months.
BC Hydro spokesperson Elisha Moreno says that while Toronto's announcement was interesting, the company has no immediate plans for a Wi-Fi network in Vancouver. "It's difficult to compare us with Toronto."
Moreno says there is interest in one of the major benefits that a Wi-Fi network offers customers, however. "It would be good to have automated meter reading. I could see how time-of-day metering could allow the consumer to track their consumption more easily and encourage conservation. We may look at another way of implementing that."
Brian Sharwood, a telecom analyst with Seaboard Group in Toronto, says smart meters, which will become mandatory for all power users in Ontario by 2011, are key.
"The province has told them they have to start doing smart metering very soon. This practically underwrites that cost and turns it into an additional revenue stream."
The Toronto plan was noticed by cities across Canada and North America that are interested in doing large-scale Wi-Fi projects of their own, says Lawrence Surtees, a senior telecom analyst with IDC Canada in Toronto.
"You better believe there are other cities out there who want to get in on this if it works," Surtees says.
"The possibilities are just mind-boggling. This gives Toronto a huge advantage when it comes to possible investment from the business community. It's also a big advantage for local residents who can use the network anywhere without cords or wires."
Surtees says the timing couldn't be better for Toronto, which had been losing technology-savvy businesses to cities such as Ottawa and Waterloo for the past few years.
"Hydro could be tapping into a growing discontent with the established telecom carriers at just the right time," he says. "Consumers want the freedom of choice in the marketplace."
While Toronto's Wi-Fi plan may be the most ambitious to date, there already are alternatives in some cities. Vancouver-based Telus Corp. provides similar coverage with its EVDO technology.
EVDO, an acronym for evolution data optimized, is essentially the same concept as broadband Wi-Fi, says Telus Mobility product development manager Jim Johannsson. "We're using a frequency band that was specifically licensed to us by Industry Canada, whereas Wi-Fi has to share that frequency with things like microwaves, baby monitors and two-way radios. This means a lot more interference can get in the way."
Johannsson says an average user with a laptop, however, would notice hardly any difference between the wireless broadband connection provided by EVDO and Wi-Fi.
Telus has EVDO service available in Vancouver, Edmonton, Calgary, Toronto, Montreal and the downtown core of Quebec City. It also has EVDO service for cellular phones in those cities.
Spokespeople for two Alberta retail electricity companies, Edmonton's Epcor Utilities Inc. and Calgary's Enmax Corp., say the companies are not considering citywide Wi-Fi plans.
SaskPower spokesman Larry Christie says he doubts his company could get into the Wi-Fi business even if it wanted to. The utility is governed by the provincial Saskatchewan Power Act, which strictly sets out what it can and cannot do.
"That would be like (telephone company) SaskTel getting into the electricity business," Christie says.
Glenn Schneider, division manager of public affairs for Manitoba Hydro, says Toronto's idea is interesting, but it might not have the same appeal for users in cities such as Winnipeg or Brandon.
"Nobody knows what's in the future, but it's definitely not something we're looking at right now. I'm not even sure that's something our customers would want as much as they do in Toronto," he says.
Executives at several Toronto-based Internet providers were reported to be upset that a subsidiary of Toronto Hydro, which has the City of Toronto as its sole shareholder, was moving into direct competition with them for a share of Canada's estimated $8-billion wireless market.
IDC Canada's Surtees scoffs at the idea competitors are upset. "They should just get over it," he says. "Ultimately these guys have a structure they could leverage as well. If they're mad enough then they should just do something to compete rather than whining."
Surtees says a 1976 regulatory ruling forces telephone companies to share access on its poles with cable companies. He adds that the cable companies might be able to find a more profitable alternative with another company as their partner.
Philadelphia has plans to build a Wi-Fi network through a partnership with EarthLink Inc., an Internet service provider that will build and maintain the network. The joint service will provide 350 square kilometres of coverage with wireless equipment on about 4,000 electricity poles throughout the city.
In exchange, Earthlink Inc. will pay the city $300,000 US per year to lease the posts and share five per cent of subscription revenues. City officials have said they will use that revenue to provide 10,000 computers for low-income residents and their children.
San Francisco is examining bids from a recent request for proposal. Media reports say one of the bids is believed to be from EarthLink and Google Inc. Google would provide a free service, with an option for a higher-speed service from EarthLink for an additional fee.
In Hamilton, a subsidiary of Hamilton Utilities Corp. has already been set up to look at a citywide Wi-Fi network. Hamilton FibreWired has started to make plans for the project and is believed to be lobbying city council for the green light as soon as possible.
Ottawa already has a small Wi-Fi zone in its downtown core, set up two years ago by Telecom Ottawa to test the benefits for local residents. Toronto Hydro Telecom's Dobbin worked at Telecom Ottawa until last August when he took on his current role.
"We all felt the project went extremely well here in Ottawa. Dave Dobbin did a great job," says Virginia MacBeth, Telecom Ottawa's director of marketing communications. "There are no immediate plans to increase the zone right now, but it's certainly possible in the future."
Surtees says if anyone can make the Toronto project successful, it is Dobbin. "He has the most experience of anyone. This should be very successful. At the very least, it will be interesting to see how this one plays out in the coming months and years."
(David Hatton can be reached at hatton@businessedge.ca)
