Paying for the WiFi

Cost

Construction: $1 million for the island
Maintenance: $100K per year?

What kind of entity?

This needs to be determined. Various possibilities:

• City-owned department
• Utility/Authority
• Private corporation

Benefits to users

• Access Internet anywhere on island
• Cost savings
• Faster Internet
• Attractive to tourists
• Supports Internet telephone with unlimited long distance

Benefits to City of Cape May

The WiFi will ultimately benefit everyone, including those who do not have a computer. They will realize the benefits of more efficient city services:

• City cell phones
• Police Internet charges
• Parking meter connectivity
• Water meter reading
• Web-based security cameras
• City Internet access

How to finance the Muni WiFi

Because some people do not personally use the Internet, we should not put the burden of the WiFi on the taxpayer. Therefore, we have to look at other funding sources.

Possible revenue sources

1. Grants (for shared services).
2. Consumer subscriptions.
3. Business subscriptions.
4. Advertising (some WiFis are supported 100% by advertising).
5. Users outside CM

Cost of financing

Short-term: City can borrow $1 million via note (3-5 years).

• 4% interest-only payment = $40,000 per year

Long-term: Interest and principal over 15 years

• $110,000 per year

Therefore, estimated annual cost of financing and maintaining Muni WiFi is $210,000

How can we generate $210,000?

If 400 residents pay $25 per month for WiFi…

• 400 x $25 x 12 months = $120,000

If 100 businesses pay $50 per month for WiFi

• 100 x $50 x 12 months = $60,000

If 25 businesses pay $100 per month for advertising…

• 25 x $100 x 12 months = $30,000

Total annual revenue = $210,000

Questions

1. How many people would be willing to pay for Muni WiFi?
2. How much will they pay?

Opportunity to get the answers

Next month we will send out roughly 3800 tax bills.
 
We can get the answers to these questions through a survey in the next tax bill.
 
The TPA should conduct the survey and tabulate the results.

Proposed Survey

1. Are you a ____residence _____business (name optional)_________________
 
2. Do you currently have a connection to the Internet in your residence (business)? Y N
 
3. If yes, what type?
 
         a. Cable (Comcast)
 
         b. DSL (Verizon)
 
         c. Dial up
 
4. How much do you pay each month for Internet access? _____
 
5. Do you have an all-inclusive plan (cable, television and Internet)? Y N
 
a. If yes, how much do you pay for it each month? _____
 
6. Do you favor the creation of a municipal WiFi? (A municipal WiFi would allow users to access the Internet anywhere through a wireless connection. The WiFi would be at least as fast as cable.) Y N
 
7. Would you be willing to pay $20-25 ($50 for business) each month for this service? Y N
 
8. (Business) Would you be willing to pay $100 per month to advertise on the Muni WiFi? Y N