WI-FI FO-FUM

Last October Mayor Tom Barrett announced a deal with Midwest Fiber Networks to blanket the city with Wi-Fi signals. At the time there was some skepticism about the proposal, particularly from those concerned about the firm's lack of substantive track record and negative net worth. (See "Beware of Geeks Bearing Gifts.")
Still, the Common Council approved the deal with Midwest Fiber Networks, provided the firm pass the scrutiny of the comptroller and provided the firm create a demonstration project to prove its plan would work.
Alas, well into what should have been the contract period, the demonstration project has not begun, and the comptroller has not signed off on the deal. The Common Council, at its last meeting, instructed the city to begin looking at other firms to create the Wi-Fi network.
Comptroller W. Martin "Wally" Morics, C.P.A., put it this way in an interview with Milwaukeeworld last week:
"The City's point of view is that [Midwest Fiber Networks] is a new and relatively small company. We are telling them to come back to us with deep pockets. ... At the end, we need to know the firm has the financial wherewithal to put brick and mortar in the ground. Right now, we haven't seen that. Absent an agreement, there is too much risk."
Joe Klein, a registered lobbyist interested in internet issues, said his concern with Midwest is that the firm does not apparently have outside capital. "I'm always concerned when a firm has no equity partners," he said. "That is just the way things are done in Silicon Valley."
In fact, that seems to be a rule whenever $20 million or larger projects, like the Wi-Fi-ification of Milwaukee, are undertaken.
In a paper entitled, "The Law of Biofuels," attorneys at Stoel Rives, LLP note, "Many lenders will commit substantial amounts of capital to biofuels projects only after these projects are supported by significant equity investments made by key players other than the project sponsors." Substitute "internet" for "biofuels," and the message is the same. You need outside money, and you have to give up an equity stake to get it.
Nik Ivancevic, a principal at Midwest Fiber Networks, says the comptroller is "asking us to have a service provider" designated for the project. "Originally our mission was to be open access." He says, "we have had a couple of interested parties that want to provide service" on the proposed network. He says his firm's attorneys have been meeting with the City Attorney's office on an "ongoing basis," and as recently as today.
He added that the pilot project, to be installed in the vicinity of Marquette University, "will begin once all the approvals are granted to us. We can't do anything unitl the city signs off on the agreement."
He said that by the end of this week, he should have an announcement, including the name of an anchor tenant, and the completion bond requested by Morics.
As far as the delays, Ivancevic says it is a natural outcome of something that is "new for the city, new technology; we're asking the city to provide something that has never been provided before," with the new technology, and that delays are to be expected.
One more delay to expect: getting Wally's signature on the paperwork. The comptroller and his wife are in Stratford, Ontario for the annual Shakespeare festival there. To be, or not to be? That still is the question.
--Michael Horne