The company running Raleigh’s downtown free Wi-Fi went bankrupt last year — and forgot to tell the city, according to city staff.
The city lost $12,000 on the deal and has since been working to pick up the pieces.
Downtown Raleigh’s free wireless Internet network provides Internet access to anyone within its eight areas of coverage, and it is now accessed an average of more than 400 times per day.
Operated through a series of access points housed atop city roofs and parking garages, the network was first installed in 2009 by Wind Channel, a private vendor contracted by the city. The company was also hired to run and maintain the network, which it did until May 8, 2012.
On that day, a routine network outage led the city to discover that Wind Channel had closed shop and gone out of business — seemingly overnight. At this point, the company had already been paid in full for its 2012 maintenance contract: a total of $18,446.
“We were left just kind of holding the bag,” said Raul Yanez, a business relationships manager with Raleigh’s IT Department.
“Once they shut their doors,” he explained, “pretty much everything came to a screeching halt as far as support went.”
Yanez said the city was unable to contact anyone with either Wind Channel or its parent company, Airimba Wireless. At that point, the city’s IT Department was forced to step in and take control, integrating support and maintenance of the free Wi-Fi network in with those it already monitored.
The department was able to do so, Yanez said, without hiring additional staff or incurring additional expenses.
The Spread of Free Wi-Fi
During the past decade, the number of towns and cities offering free Wi-Fi programs has grown exponentially. At present, more than a dozen municipalities in North Carolina have such a system in place.
In March of 2009, the City of Raleigh issued a request for proposals for its own free service. City staff sought a company that would design and install a wireless network using hardware donated to the city by Cisco.
There were two respondents: WindChannel and KompSys.
An evaluation matrix performed by the city rated WindChannel’s proposal a seven to KompSys’ three. Among other issues, KompSys’ proposal neglected to follow the correct format, was missing information and had incorrect pricing details.
WindChannel was eventually awarded the contact in May of 2009 for $109,251. This included fees for project management, access point set-ups and equipment installation. The initial annual maintenance fee was set at $16,390 and included network monitoring, upkeep and repair, along with a customer support hotline.
Twisting in the Wind
In the original contract documents, WindChannel is listed as the name under which its parent company, Airimba Wireless, was doing business. Founded in Raleigh 14 years ago, WindChannel was awarded contracts with the city in 2004 and 2006, totaling more than $51,000.
From there, WindChannel’s history takes a few turns.
In 2006, WindChannel merged with Atlanta-based tech firm Airimba Wireless, a company founded in 2002 under the name Clearsky Networks. The same year, WindChannel/Airimba also sold off its network and telecommunications business to the Dallas-based airBand Communications, announcing at the time its plans to focus on wireless endeavors.
Later records show that between January 2009 and January 2012, the city of Raleigh paid Airimba Wireless a total of $165,745.27 for various services, including the Wi-Fi network.
In May 2011, two years into its maintenance contract with the city, Airimba/WindChannel merged with the Atlanta-based firm AireWire.
At the time, both AireWire and WindChannel had been operating for nearly a dozen years and were both servicing municipal and commercial clients throughout a number of states.
It is unclear what took place between this multi-million dollar merger and the company’s collapse a year later.
All phone numbers associated with AireWire, Airimba and WindChannel have been disconnected. AireWire’s page on the professional networking site LinkedIn states simply that its assets have been sold off. A series of messages left for WindChannel’s founder and former CEO Randy Choplin were not returned.
A public information request filed with the city of Raleigh for any emails pertaining to the situation turned up no messages dated between January and December of 2012. The search did produce emails dating back to 2010, although very few actually related to the network itself. Aside from a number of maintenance orders, most of the emails contained trivialities such as employee vacation plans or the Wi-Fi capabilities of Japanese vending machines.
Mike Williams, assistant director of Public Affairs with the city of Raleigh, conceded it was possible that there may have been more emails, but that they would not have held onto them if they were deemed to no longer have any administrative value.
Money Spent, Money Lost
Tim Kinnear, the chief financial officer for airBand, confirmed the company had purchased certain assets of WindChannel’s in 2006. He explained, however, that airBand would have had no role in WindChannel’s 2009 contract with the city of Raleigh for the Wi-Fi network.
In fact, Kinnear said, airBand in 2010 decided to shut down the North Carolina operations it had acquired from WindChannel.
“Frankly, they were not profitable,” he said.
Gail Roper, chief information officer for the city of Raleigh, said the legal fees incurred from attempting to retrieve any money from the companies would likely have outstripped the amount the city could have recovered. With the amount of time left on the contract, it’s possible the city was entitled to a refund of more than $12,000, although the likelihood of obtaining it through a bankruptcy court was slim.
Of WindChannel, Roper said it was a “pretty viable company at one point.”
“It was really a shock to us when they went under, especially with the kind of services they were providing. You think they would be fairly strong due the demand,” she explained.
Roper said monitoring the downtown free Wi-Fi program is a small part of what the IT Department, which has an annual budget of $16 million, now does when it comes to providing network maintenance and support.
The Network Today
In a series of informal tests, the Record found the average download speed of the free network to be around 1 mbps (megabits per second), similar to the free speeds offered by businesses such as McDonald’s, but a fraction of the at-home broadband speeds offered by cable companies.
Although 1 mbps is not enough speed to perform tasks such as downloading large files or streaming video, it’s generally enough to perform simple tasks like checking email or light web browsing.
Raleigh resident Amy Ruebeck said when she first moved downtown to an apartment on Wilmington Street, the free network served as her primary Internet connection.
“Before we had our own Wi-Fi, we used it for a little while, maybe the first week or so,” she said.
Overall, she was satisfied with the service it provided.
“If I wanted to watch videos online though, I couldn’t really use it,” she said.
Usage statistics provided by the city for February 2013 show that the network is used for an average of 20 minutes at a time, and that Apple devices are by far the most common, accounting for more than 2,070 of the more than 12,700 connections for the month.
Roper said there is no revenue generated by the network. While the original contract with WindChannel alludes to the introduction of paid tiers to the free network, Roper said nothing ever came of it.
“We think of it as a quality-of-life initiative; it ties in with our overall city mission and vision,” she said.
The Network of the Future
Both Roper and Yanez spoke extensively of the city’s plans to further develop the free network.
Roper said enhancing it is a significant part of the Raleigh Connected Initiative, which currently has the city installing fiber lines alongside traffic signal upgrades, as a way of boosting the amount of available broadband.
With the fiber network, Roper said, the initiative aims to “bring gigabit speed to Raleigh like they’re putting in Kansas City.”
Yanez said that although a limited budget has restricted how much the IT Department can do with the network, they are nonetheless constantly working to improve upon it.
“What we’ve tried to do since we took over maintenance on the contract, we’ve tried to enhance it,” he said.
Although he is unsure when the free network may offer gigabit speeds, Yanez said doing so is crucial to the city’s goal of providing “exemplary service — and at as high a speed as possible.”