Municipal WiFi networks ("MuniNets") are city-wide 802.11x (b,e,g,n) (wireless) mesh networks that can run an average city $10-15 million. Wireless transmitters are positioned throughout the city in public right-of-ways like atop street poles, traffic lights, and pedestrian traffic areas. The mesh network creates a "fabric" of connectivity that allows anybody with a wireless device to see the network, attach to it, and, subsequently, use the Internet for free.

The state of Muni-WiFi currently look like this: 159 existing and operational networks; 54 networks under construction; and 78 Mini-WiFi's under RFP (request for proposal). Muni-WiFi is a big deal - some big names are getting into the picture like Google, Microsoft, Earthlink, Cisco, and Motorola; example - Portland, Oregon is getting their MuniNet up by the end of 2007 through a partnership with Microsoft and a company called MetroFi; Google's in San Francisco in partnership with Earthlink.

Okay, so everybody wants a piece of the action but if the connectivity is free, you might wonder, "er-what action"? Well, in Portland, MetroFi will push banner ads at the top of the browser for free connectivity, and if you want connectivity with no ads, that'd be a cool $20/month paid to the local municipality, please.

Think of it: a free, public domain hot spot the size of downtown.

If you're into finding unique ways to fund city government, this is looking pretty compelling: suddenly you're an ISP and capable of directly competing with local teleco's, LEC's, and ISP's. You've got economy of scale on your side - a literal city of interconnected users - and a bunch of advertisers salivating over a steady stream of narrow-targeted ads to WiFi owners.

On the other hand, if you're not about open services and are into private enterprise, the explosion of "MuniNets" must look pretty scary. Think how LEC's and ISP's are going to find it even harder to compete against a public utility. Further, think of all of the hardware investments made by thousands of individuals and businesses to setup their own hotspots throughout town - key to their strategy to attract and retain customers, now people can wifi whereever they want and they don't need to be sipping your coffee.

And if you're a technology service provider, you've got to be in a downright panic. No more wifi routers to configure within the home or office; no more problems with privacy and security; no more threatening scare tactics about who may be sniffing your wireless packets. Why? Connectivity on a "MuniNet" is professionally managed and available from the street... just like water. Crap - there goes next year's business plan.

There's a lot of risk here, though. MuniNet's are being implemented with current standards of wifi that don't hold a candle to the next generation of technology - 802.16 WiFiMax: 75mbps throughput in a 30-mile radius operating at 2.5-2.7ghz. Providers of this technology might be able to leapfrog the MuniNet and tap right into suburban areas that are beyond the municipal reach, rendering the MuniNet obsolete.

Regardless, the writing's on the wall: WiFi as a utility is here. If you're not preparing for a mass consumer exodus from privatized services like cable, xDSL, or ISP's to a nearly costless public utility, or, if your business depends on any of those services (like router hardware and software sales, service and support relationships, installation and deployments), or, if you're not planning on how to leverage free bandwidth to lower your own operating expenses, ouch - it's going to leave a mark after it whacks you upside the head next year.