Archive for December 13th, 2007

Muni Wi-Fi nightmare

The city of Philadelphia can be generally credited with launching the muni Wi-Fi craze, and is now seeing the down side of that trend. Earlier this week, the City Council held a hearing at which the status of its ambitious municipal network was examined, given the fact that the service provider, EarthLink, has stated it will no longer invest in municipal wireless networks.

EarthLink’s grand plans have run afoul of business realities, and nowhere is that more evident than in Philadelphia. The company said it has spent $20 million to build out Philadelphia’s network, which is still substantial but not complete, more than the $12 million to $15 million expected. The original contract between EarthLink and the city and its Wireless Philadelphia not-for-profit organization was hopelessly one-sided. As noted by the MuniWireless Web site, EarthLink is expected to pay $2 million to the city, $450,000 in inspection fees and rental fees of $2 per month for each streetlight used in mounting antennas, along with 3700 free accounts for city workers to access the network. The contract also calls for 23 free zones and 25,000 reduced price accounts for low-income families that qualify in WP’s digital inclusion program.

All of that, on top of the higher-than-expected cost of actually installing Wi-Fi citywide leaves EarthLink in no position to do anything but bleed red ink. Subscribership is not likely to cover those costs any time soon, if ever. The company did not attend the hearing, sending an unsigned statement claiming confidentiality, but it’s obvious that EarthLink is between a rock and a hard place here.

In a report also issued this week, the New America Foundation blames Wireless Philadelphia for handing its network over to a private concern. I didn’t read the whole report, but here’s a blogger who did and takes issue with it, for reasons I understand.

Rather than parsing out blame, however, it seems to be that some reasonable re-negotiation needs to take place that doesn’t leave Philadelphia’s ambitious plans for bridging the digital divide in limbo but also doesn’t bankrupt the company attempting to make those dreams a reality. The municipal Wi-Fi market has come a long way and much has been learned the hard way in the process. Philadelphia pioneered once, and it could do so again.

Customer service the true killer app

I practically have RCN’s phone number memorized. When my bill was mysteriously doubled, I had to redial the cable company so many times after being hung up on that it is etched in my brain, right next to the hold music I heard for an hour each time. I even considered canceling my service, which is why I’m convinced that if a company be it a cableco, telco, wireless carrier or Internet provider had a solid customer service experience (not to mention allowed consumers to bypass those pesky automated menus), they would dominate the market. Customer service is paramount, arguably more so than the speed of a network, the features of a cell phone or the number of high-definition channels offered via IPTV.

At least 5,000 consumers agree with me. Forrester Research recently announced its Customer Experience Index (CxPi) for 112 firms spanning nine industries. Making up the lower echelon of the list were wireless carriers, television and Internet providers sad news for the telecom space. In terms of usefulness, usability, and enjoyability, 5,000 consumers surveyed dubbed them failing to perform.

Perhaps even more surprising was that wireless carriers, coming in fifth, beat out TV and Internet providers. Internet providers came in third to last on the list of nine and TV service providers followed, beating out only medical insurance providers (at least they can claim that). Still, it is a dismal state of affairs when your TV brings you less joy than your phone, which in turn is also failing to live up to your expectations. I don’t think we can blame the Writer’s Guild for this one.

So, the question remains: Are consumers demanding more or is the industry delivering less? The answer may well be both. Forrester analyst Bruce Temkin, who conducted the survey, said that to some degree, the carrier and service providers tend to focus a lot on their products and the protection of their territories rather than on the needs of their customers. It can be a double-edged sword as service providers get caught up offering the latest advancements to attract customers, yet overlook the customers they already have. On the flip side, as customers hear more and more about the capabilities of IPTV, mobile handsets and the Internet, they come to expect the technologies to work more quickly, efficiently and right now.

A ray of hope from the Forrester study for telcos is that they were not included in the television space. With consumers so displeased with the eight satellite and cable companies included in the survey, a significant opportunity exists for telecom providers to differentiate themselves based on their quality of experience in this space.

And it’s not just a North American phenomenon. Increasing customer dissatisfaction is leading to higher churn in the UK as well. The solution may come from a better product or more likely from simply communicating the utility of a product, how to use it and enjoy it through stronger customer service. In terms of the overall worldwide customer experience, it might just be the one thing that service providers can’t substitute for faster speeds, cheaper prices or technological innovation.


December 2007
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