Sorry, Milwaukee, your municipal Wi-Fi is on hold. It seems that during the mad rush to announce municipal Wi-Fi implementations, people forgot one thing: muni Wi-Fi is really expensive.

Companies like AT&T and Earthlink have partnered with a number of cities to blanket denizens in a warm, downy coating of wireless Internet. However, because most cities can’t convince their citizens that Wi-Fi is a good thing, the contracts are failing and partners are finding that no one really wants muni Wi-Fi anyway.

This is the reverse of the last mile problem. If you really want Internet, chances are you already have DSL or cable. If you don’t want Internet or live in an area where the providers aren’t supplying data — the places Muni Wi-Fi is presumably designed to serve — chances are you’re not particularly interested. Add in WiMAX and cyber cafes and you’ve pretty much saturated all the areas that might pay for city-wide WiFi.

Is this a matter of uneducated consumers, stupid planning, or lazy city councils? Who knows. All I know is that Muni Wi-Fi might be already played out.

Why Wi-Fi Networks Are Floundering [BusinessWeek]