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M2Z proposing free wireless broadband service

On July 13, John Muleta presented the Jackson City Council with a proposal — to offer free wireless broadband Internet access to every citizen in the Capital City. If that sounds novel, and ambitious, Muleta’s company, Silicon Valley-based M2Z Networks Inc., has adopted the goal of providing free wireless broadband connectivity to practically everyone nationwide within a decade. And, it is proposing to do this without any subsidies while committing to various public service efforts.

M2Z co-founder and CEO Muleta said when people hear what his company is proposing, the initial response usually contains the word “crazy.” But the former Federal Communications Commission (FCC) official and entrepreneur maintains that he, his board and investors are quite in control of their faculties, and strongly believes M2Z’s goal will be realized.

Filling a void

While with the FCC, Muleta became more and more concerned over worldwide broadband access numbers. FCC data he cites show a minimum of 100 million adults in the U.S. either have no Internet access or are using dial-up. The U.S. ranks 21st in the world in terms of broadband connectivity, currently coming in just below Estonia.

Yet, a major catalyst for forming M2Z came much closer to home. His son came home from school one day with a research project that required Internet access.

“So, what about the kids that had no access to the Internet?” Muleta asked himself.

This led Muleta to establish M2Z in 2005. The company proposes to offer free wireless broadband service at a minimum of 384 kilobytes per second with no contract or long-term commitment from subscribers. Its service would be available to 33% of all Americans in three years, 66% in five years and 95% in 10 years under a 15-year FCC license. City of Jackson residents would be among its first users.

So, how does M2Z propose to deliver its service? And if the service is free and M2Z is planning on investing billions of dollars without public funds, how will this business model fly — where is the revenue? And, why is the company looking to roll out this service in Jackson?

According to Muleta, M2Z’s system would utilize technology developed for the military. In the simplest of terms, M2Z’s technology would utilize over-the-air television technology. Traditional “rabbit ears” provide one-way delivery — from tower to end-user. The company’s technology would allow two-way communication utilizing a single spectrum band. Thus, anyone with over-the-air television access could both receive and transmit data via a specialized chip that would be compatible with any computer. If one can receive television programming via antenna, one can utilize M2Z’s service.

In addition to Internet access, M2Z has committed to offer other services. For instance, it is proposing to filter content at the network level. It would also provide public safety officials with access to an interoperable secondary data network. And, it would offer (unfiltered) subscription services and pay the federal government 5% of gross revenues.

M2Z’s basic service would be free. However, its premium package, offering connectivity 60 times that of dial-up, would cost an estimated $20-$30 per month. Muleta said he believed this service would be attractive to businesses, especially smaller concerns.

While the service would be free, the chip would not be. According to Muleta, the hardware would be available through local retailers at an estimated initial cost of $100-$150. He added that he anticipated a drop in price over time.

To deliver the service, M2Z proposes to use Jackson’s existing towers and fiber optic ring. For the use of this existing infrastructure, M2Z would pay going commercial rates.

If approved by the city, M2Z would invest an estimated $3 million to $4 million in construction, offices and talent in Jackson. The cost of the U.S. build-out is estimated at approximately $2 billion.

Muleta said sale of M2Z’s hardware would not be a revenue generator, and would sell basically at cost. Once again, M2Z is asking for no taxpayer money or subsidies. Instead, M2Z plans to earn revenue from Internet sales.

As Muleta pointed out, search engines do not know where users are logging in from, so advertising is not place-conscious.
M2Z would require subscribers to give their zip code at sign-up. This would reveal the location of those logging on, which in turn would allow for local advertising. This would be attractive to search engines, and it is there that M2Z plans to make its sales.

Muleta said M2Z’s interest in Jackson and Mississippi as a whole is driven by several factors. For one, broadband access in the city and the state drags well behind others in the U.S., due in large part to low personal income. Thus, there is a need. He also said both the city and state have been welcoming, citing the state’s congressional leadership, state and city representatives who have shown a high degree of interest in M2Z’s proposal.

At press time Muleta was scheduled to return to Jackson July 20 to meet once again with city leaders.

Contact MBJ staff writer Wally Northway at northway@msbusiness.com.


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