There's all kinds of good news on the municipal fiber front. First up is the fiber optic system built in Burlington, Vermont. The system currently serves about 2,000 of the city's 39,000 residents and is expected to provide up to 20% of the city's general fund when the bond debt is retired in 15 years. So what's their secret sauce? They built out the network for use by city government first, then expanded the service to residents living near the initial backbone. The project is projected to have positive cash flow by 2009.
Ashland, Oregon had to learn things the hard way. After piling up a solid $4M in debt from their retail service, the city converted the network into a UTOPIA-style wholesale network that has netted the city about $350K in profits. It's not enough to pay down all of the previous losses, but it's certainly going to cover the payments on the debt and has introduced a lot of new telecommunications providers to the city. Because of Ashland's success, Edmonds, Washington is looking at building their own wholesale fiber optic network to serve the Seattle suburb.
Meanwhile, most muni WiFi continues to perform poorly and bleed money like a compulsive gambler at Harrah's. According to Slate, the problem is a mixture of bad technology and unrealistic expectations by cities. St. Cloud, Florida is one of the few exceptions because the small town treats it not like a revenue source but as a public infrastructure. They have a 77% participation rate from residents. Of course, part of this could be solved with municipal WiMax deployments, especially if big players like Sprint reverse course and leave that particular market.