San Francisco gave the green light to Google (GOOG) and Earthlink (ELNK) to offer wi-fi throughout the city. You’ll get free 300kb/s ad-supported service from Google, or $20 a month for 1Mb/s ISP service from Earthlink.
Total capex is $15MM to install, though I bet that number will at least double to deliver full coverage. Assuming Earthlink spends $15MM on it’s own, they would need around 8,000 subscribers at $250/year to justify the investment and deliver a 15% return. This seems very, very achievable in a city like San Francisco. If Earthlink can win peering agreements with guys like T-mobile to allow roaming outside of SFO, it looks even better.
San Francisco is always on the vanguard of both good and bad.
Correction I neglected to include any provision for Opex in the above calc. Anyone care to take a guess at what that might be?