The two companies plan to shell-out up to $270 million to provide free Wi-Fi services to Silicon Valley, which is about 1,500 square miles. And it will certainly have its challenges. Try getting 42 cities with roughly 2.4 million residents to work together.
What's the motivation for this deal? Well it's good marketing. It also can be, in a way, a laboratory for experimentation. After all Silicon Valley is the center of the universe for technology, right?
One interesting twist is the involvement of SeaKay, which is a nonprofit that helps provide technology to low-income communities.
I interviewed Craig Settles, who is the author of the book Fighting the Good Fight for Municipal Wireless. According to him: "One thing that will be interesting to watch here is the influence that SeaKay has on the funding model that gets adopted in these municipalities. SeaKay has been an early-on advocate of finding corporate and philanthropic organizations to sponsor muni networks. I believe this approach has significant merit, and is a much more viable financial approach than relying heavily on banner ads to fund network build-outs and operations. If the partnership doesn't smother them - the company only has a handful of people - SeaKay will get a lot of other cities to view sponsorships in a credible light."
Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.