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 Stephouse Proves Slow and Steady Wins the Race By Naomi Graychase
July 16, 2008
MetroFi’s grand plans to provide the entire city of Portland, OR with free Wi-Fi went down in flames last month. Meanwhile a local WISP that provides some free Wi-Fi is thriving. When the city of Portland, OR issued its RFP for providers looking to fulfill the City’s desire to unwire “The Rose City,” local ISP, Stephouse Networks declined to submit a proposal. “We are primarily a well-rounded ISP,” says Tyler Booth, President of Stephouse Networks. “We offer wireless, fiber, metro Ethernet, and so on. In terms of wireless, we’ve been doing wireless in Portland for about two and a half years. We were here before MetroFi, but since we weren’t offering citywide free Wi-Fi, we didn’t fit into the RFP model. We had no interest in providing citywide free Wi-Fi—that business model doesn’t work and we knew that going into it.” In the time it took MetroFi to rise and fall, Stephouse steadily climbed. Currently, Stephouse has covered five square miles of Portland’s downtown area and two square miles of North Portland’s St. Johns area with both Wi-Fi and WiMAX service. The local ISP uses Proxim Wireless equipment to provide T1, T3, and fiber-grade wireless broadband services to businesses and individuals within its service area. “In North Portland—St Johns area—DSL service is not available, so we deployed a Wi-Fi service as an alternative to DSL there. The only alternative [for consumers] is cable, which is quite costly,” says Booth. This strategy of only deploying Wi-Fi as a DSL replacement in areas where there is a proven demand has been at the heart of Stephouse’s success. “We are really trying to concentrate on areas with a demonstrated need for these services,” says Booth. “We provide DSL service in residential neighborhoods around Portland. There’s not a whole lot of demand for wireless services as a DSL alternative. There’s no reason for it. It’s so pricey to deploy a network in an environment like that. It can’t compete well on a cost basis, but it’s so expensive that the pay-off time is considerable. We concentrate on areas like St. Johns that don’t have viable alternatives, or in Portland, where there are outdoor roaming users. It’s a completely different space than a residential neighborhood.” Filling the gapMetroFi officially turned out the lights on June 30th and it is currently in the process of removing it’s equipment from the light poles. “We looked at taking it over,” says Booth, “but there was no feasible business we could wrap around that…For some, it’s been a sense of relief, for others it’s been a very tough realization that it’s not always realistic to expect that free wireless is going to be available everywhere. We have a number of previous MetroFi users that have just discovered us and are gladly happy to pay for services in the absence of MetroFi. People are waking up and realizing that it’s not a viable business model.” While Stephouse sees the impracticality of being in the business of providing free Wi-Fi, it also sees the benefit of making free Wi-Fi available when it makes sense. “We do provide free service,” says Booth. “It’s our way to give back to the community. There is a need for it. If someone is traveling through the area and using it for an hour—no big deal. It’s paid for by the subscribers. Anyone can use one hour of free service a day, up to ten hours a month.” Stephouse also provides a pay-as-you go option, which allows users to buy access in one-hour increments ($.99/hour) or to pay for a month of unlimited usage for $20. “We don’t require a contract,” says Booth. “The service ranges from 99 cents for an hour, so someone can just open up their laptop and connect on that ad hoc usage model, or they can subscribe on an ongoing basis as a DSL or cable alternative. We provide them with an indoor dedicated receiver and that ensures the highest reliable service possible. We also use WiMAX in downtown Portland to provide high-speed alternatives.” The equipmentStephouse has deployed a combination of Proxim’s Tsunami MP.11 WiMAX and ORiNOCO AP-4000LR Wi-Fi mesh technology in Portland. “We exclusively use Proxim’s equipment for our Wi-Fi mesh services that we offer and for our enterprise WiMAX offerings,” says Booth, who ruled out products from other major vendors, including BelAir, Aruba, and Cisco before settling on Proxim. “Proxim may not be the market leader, but they’ve been around for a lot of years,” says Booth. “They know wireless intimately. They have some talented folks there who have innovated the outdoor space, which is the wireless technology that we use today. The types of things that an outdoor WISP needs to manage their system—signal quality and interference sources—we need to monitor that very intimately to provide a high-quality of service to our users. Indoors, all of the APs know about each other. In a metro area, there are thousands of sources of interference all around you, and you need to see where they are and pick the best spot to get around them from.” “The price point also fits really well for our business model. It’s not bottom-of-the-barrel cheap DIY stuff, but it’s also not BelAir. While [BelAir] makes good equipment, it’s very expensive and there’s not a lot of benefit for that cost,” says Booth. As MetroFi dismantles its network, Stephouse is receiving a boost in its customer base, but Booth is keeping a level head, with no grand plans to expand beyond proven markets. “We are picking up a lot of new customers that were using the free service prior to finding us,” says Booth. “But, unless I see a strong demand for it outside of areas we’re currently covering, there’s just not any reason for us to look at growing, unless it makes sense. We will be looking around and identifying areas where we see a need for it and continuing to fix it.”
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