Google offers to fund wireless hotspots in San Francisco

By Gerry Shih

SAN FRANCISCO (Reuters) - Google Inc is offering $600,000 to set up free wireless Internet hotspots in 31 public spaces in San Francisco, but city officials said they need to review annual maintenance costs before it could be approved.

Google has previously funded public wireless projects in its home city of Mountain View, California, in New York Chelsea's neighborhood and around Boston's South Station. The search giant is based 30 miles away from San Francisco but employs hundreds of workers who commute from the city.

San Francisco officials say public Internet service is long overdue for a city that has eclipsed Silicon Valley as the epicenter of the startup ecosystem in recent years, attracting a dramatic influx of venture capital investment and young tech workers.

"There are cities not only here in the U.S. but in many, many foreign countries where free WiFi is ubiquitous. We have a lot of work to do," Supervisor Mark Farrell, who spearheaded the negotiations with Google, said by telephone Wednesday.

Mission Dolores Park, the weekend Mecca of San Francisco's young tech crowd, would be among the areas covered by the plan, as would tourist destinations including Alamo Square as well as Washington Square in North Beach. Some less affluent areas such as the historic Portsmouth Square in Chinatown and the Tenderloin Recreation Center would also be included.

In a statement, Google executive Veronica Bell said the company hopes the free WiFi will be "a resource that the city and other local groups will be able to use in their efforts to bridge the digital divide and make their community stronger."

Because it controls so much of the Web, Google benefits from an increase in Internet use. The company reported $50 billion in revenue in 2012, mostly by selling ads targeting Internet traffic. According to a new study released this week, Google's various properties account for a quarter of all U.S. Internet traffic.

The company said it would not own or manage the network. The angel investor Ron Conway, one of Mayor Ed Lee's staunchest political allies, is coordinating the project through his non-profit SF.Citi.

Members of the local board of supervisors, who still have to formally approve the gift, said the project would undergo a normal review process to make sure that government contracts to install and maintain the service are properly awarded. In 2006, a similar plan to install wireless coverage in San Francisco was scuttled after the deal came under political scrutiny. Officials also said they would review the details of the system's maintenance costs.

In the case of New York City, the network in Chelsea cost $115,000 to build but $45,000 a year to maintain.

San Francisco parks director Phil Ginsburg called Google's gift "no strings attached" and said the city could bear the maintenance costs. Google's donation would cover two years' worth of maintenance costs, which amount to $50,000, he said.

Ginsburg said officials picked 31 locations out of the city's 200 public spaces based on a criteria of geographic and economic diversity. Some areas, including Golden Gate Park, were too big to cover with the sum donated by Google.

Installation of the equipment could begin as early as December and be completed by mid-2014, Farrell said.

(Reporting by Gerry Shih; Editing by Ken Wills)