Sleepy Spanish Town Becomes
Cutting Edge in Wi-Fi Project
By KEITH JOHNSON
Staff Reporter of THE WALL STREET JOURNAL
ZAMORA, Spain -- The last time this cobblestoned medieval town in northern Spain was at the forefront of anything, El Cid was holed up behind the city walls, preparing to lead the Reconquest against the Moors. Now, Zamora is hoping to leap back into the vanguard as the world's first city entirely connected to the Internet using the high-speed, wireless technology known as Wi-Fi.
The project in Zamora, a quiet town of about 68,000, 250 kilometers northwest of Madrid, is a new application for Wi-Fi, or wireless fidelity, technology. Unlike the smaller-scale "hot spots" sprouting across Europe and the U.S. in public places like hotels and airports, it isn't aimed at technophiles who need high-speed Internet connections while on the go. It's meant to be Internet for the masses. But getting it to work citywide is proving a struggle.
This province of Castile-Leon is a place where the masses need a boost onto the Internet. Only one person in six is online, according to a Spanish government study released early in 2002; that penetration rate lags behind even the sluggish national standard of about 20%. Only three towns in the province have access to the high-speed digital lines known as DSL. But now about 600 people in Zamora are signing on to the Web without wires through this Afitel Wi-Fi service. Afitel figures it needs 2,000 customers to reach an operational break-even, and it aims to have 3,000 by its first anniversary next September.
The project is the work of a Madrid-based start-up and U.S. chip maker Intel Corp., which teamed up to run trials this summer before the launch. Intel is pushing Wi-Fi technology around the world, looking to stoke demand and interest ahead of its planned unveiling this year of a platform that will integrate Wi-Fi into mobile computers. The Zamora project, though, isn't part of the company's planned investment of $150 million (€142.9 million) in companies developing Wi-Fi products; Intel doesn't have a stake in it, except to the extent of donating hardware.
Wi-Fi, unlike third-generation, or 3G, mobile-phone technology, uses free public spectrum that isn't regulated in Spain. Though that can mean a problem with radio interference, it also makes it much cheaper to roll out infrastructure. With the free hardware, Afitel figures its basic cost per customer is about €60 ($62.90); that is, it costs about €600 to install an antenna that creates a hot spot to serve 10 people or so.
Other cities, such as Jacksonville, Florida, have tried limited Wi-Fi networks in parts of town, and Norwegian wireless Internet service provider Wan Norge SA offers sparsely populated rural areas Internet thanks to powerful Wi-Fi antennas. The Zamora project, though, aims to create an entire "hot city" -- and unlike so many pioneering technology projects in small European cities, it aims to do it as a private-sector, money-making venture, rather than as a political pork project. Afitel received no government subsidies, though the municipal government has cleared red tape and paved the way for it to install antennas all over town.
"It's still in the early stages, but this could be a sea change in the application of this technology," says Stacy Smith, general manager of Intel for Europe, the Middle East and Africa. "And Zamora shows that you don't need to be a European Union project, or a national government project." Intel nominated Afitel for the Computer World prize this year for new technology applications.
The biggest difference between Zamora and the wireless communities springing up from Manchester to Manhattan is the lack of hype. Wi-Fi is often touted for its speed -- it can deliver a blistering 11 megabits per second, two hundred times what dial-up access can -- but that's when it's used in a confined, local network. Wi-Fi's speed depends on the number of users and on capacity of the whole network's wired link to the Internet itself -- the so-called backbone. Zamora is a large-scale project that began with just a two-megabit backbone. Afitel took pains not to pretend it was delivering more than it was.
Indeed, wary of another round of technology hype, Manuel Maese was keen to keep expectations low. The head of strategy at Wireless & Satellite Networks SA in Madrid, the company that runs Afitel, Mr. Maese didn't target high-end users such as the handful of Zamorans who carry personal digital assistants. Instead, he targeted those who had no Internet connection or who were frustrated with slow dial-up access. Though he offered a modest 80 kilobytes per second, the price was right: At €10 a month, it's not just cheaper than faster rivals cable and DSL (€40 a month), but also cheaper than flat-rate dial-up access, which costs €16 a month.
"We've all heard enough blue-sky projections -- what we have to do is go for the market that actually exists now," Mr. Maese says. Afitel has plastered the city with more than 250 small white antennas (made by Intel) that relay wireless signals from the backbone connection by the railway station at the edge of town.
There's just one hitch: Modest as the promises were, the service at first failed to deliver. Connections initially proved mostly sporadic and agonizingly short of even 80 kilobytes a second. The old city's convoluted architecture was part of the problem; the numerous stone facades, for example, distort the radio signal, hurting both speed and reliability.
"Bringing down the Internet cost for users gets rid of a significant barrier, but there are so many other barriers to it being adopted on a mass basis," cautions Lars Godell, telecom analyst with Forrester Research in London -- and technological limitations and lingering questions about wide-scale Wi-Fi rollouts are two of those barriers.
Without any blueprint to work from, building an effective network architecture for Zamora was a matter of trial and error. Jose Manuel Reglero, the local Afitel representative, hops outside the pharmacy he owns near the railway station to point out how the company finally managed to get coverage to most of the city. The antennas used to relay signals across town were originally put on facades, then on street lamps. Only when they were finally moved to rooftops did the service really start working.
Afitel also recently doubled its own backbone capacity to four megabits. It will have to continue to grow, making it Afitel's biggest continuing cost, if the company wants to cover more than 1,000 people and ever offer broadband speeds. The company's aim has been to move slowly and adjust capacity to meet to real demand.
"We've really caused a lot of havoc to the users, I know," Mr. Reglero acknowledges. "With all the changes we've had to make on the fly, we've cut people off, we've screwed up connections, the works."
Some of Afitel's customers are irate because of slow download speeds, frequent disconnections, and limited access to advanced Internet functions. One customer even threatened to beat up Mr. Reglero because he didn't get reception in one part of his house.
Now that most of the teething pains are behind, though, most users seem satisfied. "It used to drive me crazy: the disconnections, the snail's pace, everything. But it's getting better all the time, and compared with the alternatives, I couldn't be happier," says Santiago Salgado, a computer technician who says he gets faster -- if not necessarily more reliable -- performance from Wi-Fi than DSL. Another user who first subscribed to cable Internet access ditched it in favor of Afitel, saving 75%.
In this sleepy provincial town, the sight of Wi-Fi antennas jostling with the legions of local storks for rooftop space is an incongruous sight. For Zamora itself, burdened with an aging population, abandoned by industry and agriculture, and clinging to a small-scale service economy, the local government is hoping that a successful go of the Wi-Fi experiment could be the first step toward righting years of economic decline.
"Zamora was in the vanguard at the beginning of the last millennium," quips Angel Macías, the city councilman whose support for the project was crucial in cutting municipal red tape and paving the way for a quick rollout. "With this project, we want to be in front again at the beginning of this one."
But the Afitel experience is proof that novel applications of Wi-Fi have to follow a torturous path to maturity. For now, the jury's still out on Wi-Fi's suitability for citywide networks. "People should not have inflated expectations for Wi-Fi based on the Zamora project," says Mr. Godell. "This is not going to be an overnight revolution."
Write to Keith Johnson at keith.johnson@wsj.com
Updated January 2, 2003
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