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It's been a good week for Wi-Fi startup Meraki. First of all, the company raised a cool $20 million in venture capital. Investors included Sequoia Capital, DAG Venture and Northgate Capital.
What's more, Meraki says it will offer free high-speed wireless Net access throughout San Francisco. No doubt, the announcement is getting a lot of buzz.
But what does this really mean? I had a chance to interview Craig Settles, the author of Good Fight for Municipal Wireless. According to him:
"It is vitally important that people realize Meraki is NOT making this service available for free elsewhere. People have to pay for the hardware and individuals have to step up to provide DSL or some other high-speed landline access for some of these repeaters. Meraki is doing what EarthLink -- along with Google (NASDAQ: GOOG) -- should have done, that is, use the big, high-profile city as a marquee account, but sell the service to everyone else. Don't get sucked into the 'free' hype.
"However, municipalities also have to realize that the cost of the Meraki solution is going to be a lot less than building out what has been a typical muni wireless network. Also, the revenue is very much driven from the community level, so some of the development costs are going to be borne by end users. This could make it easier for cities to do what Wireless Philadelphia is doing, which is finding government agencies, philanthropic organizations and others to underwrite the cost of getting this technology into the hands of low-income communities.
"As with all things related to muni networks, anyone who jumps on board with the Meraki solution without being prepared for the long implementation journey is setting themselves up for disappointment and failure. This happened too often when politicians blithely announced they were going to cure all of their city's economic development woes with a muni network, but clearly hadn't thought through the logistical, financial and technical challenges."
Tom Taulli is the author of various books, including The Complete M&A Handbook
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