'UnpluggedCity' pulling out of Springs

0 Comments | Gazette, The (Colorado Springs), Jul 6, 2007 | by WAYNE HEILMAN THE GAZETTE

SkyTel Corp. said Thursday it will pull the plug July 31 on its 18-month test offering wireless high-speed Internet access in two Colorado Springs neighborhoods.

The Mississippi-based company will instead focus on its core wireless messaging business, said Angie Yang, a SkyTel spokeswoman in California. SkyTel shut down its only other test site in May in Lexington, Ky., and agreed to sell that network to the city of Lexington for $10.

The wireless broadband service "just wasn't working out as a business proposition," Yang said. "If business had been good enough, we might have been able to continue, but it doesn't make any sense to keep operating a noncore business that isn't profitable."

The company has no plans to sell its Colorado Springs networks to city government as it offered to do in Lexington, Yang said. SkyTel is " considering our options" about what it will do with equipment used to provide the service in the Springs, she said.

Ron Cousar, director of the city's Internal Support Services Department, said the city wouldn't be interested in buying the network. He said city officials have not been notified of SkyTel's plans to shut down the network or its plans for the equipment.

SkyTel began selling its "UnpluggedCity" wireless Internet service in February 2006 for $24.99 a month in downtown Colorado Springs and near Chapel Hills Mall. The pilot program was to last a year and determine whether the service could eventually be profitable.

Exactly one year after the test began, Indianapolis-based Bell Industries Inc. bought Sky-Tel for $23 million from telecommunications giant Verizon Communications Inc. SkyTel's lease on streetlight poles with Colorado Springs Utilities will expire in October.

The company leases space on the poles, traffic signal arms and city buildings for transmitters that operate the network. Any computer with a wireless card, standard on most laptops, can connect to the network from homes, vehicles, parks and other locations.

The move comes as city officials are soliciting bids with a July 24 deadline to build a citywide wireless network. City officials have sent out bid packages to more than 20 companies considering submitting bids, including EarthLink Inc. and Time Warner Cable.

About 175 cities and counties have such networks covering all or parts of their territories, according to a March survey by MuniWireless.com. But governments are finding Wi-Fi projects costing more and drawing less interest than expected.

CONTACT THE WRITER: 636-0234 or wayneh@gazette.com