It is interesting that city planners/local government are not looking at Taipei's experience and reassessing their Wi-Fi plans. The New York Times recently noted that while Taipei has 4,100 hot spots reaching 90% of the city's nearly 3 million residents, only 40,000 have agreed to sign up for the service since January. The service provider, Q-Ware, recently lowered is year-end subscriber forecast to 200,000 from 250,000 (and I wouldn't be surprised if they didn't make that).

You don't think all those hard working private garbagemen are upset
with all those municipally owned garbage trucks running around
spending our tax dollars? or what about all those private taxis with
their business taken away by the 'government funded' busses.

Only someone kidding....

Just because urban areas have WiFi hot-spots and competitively priced private internet solutions available doesn't mean there isn't scope for a public, free internet option to provide access to those who can't/won't pay for internet access. Not to mention the competitive pressure that would result from having a free internet alternative available which will undoubtedly force private firms to cut prices, improving consumer welfare and partially offsetting the tax money spent on the municipal Wifi system.

And as far as rural communities go - if they envy their "urban cousins" so much, why not move to a city? There is no good reason to live in shrinking communities, in desolate environs, without modern utilities. The "Homestead Era" is over, time to move on.

Living in a rural environment is a choice of life... Question of taste. I live where there is no high speed Internet and we are going to build our own network. Using Municipal infrastructure, deploy wireless is going to offer rural communities the same type of service in urban areas. We are starting to install the antennas and we will cover as much as we can. In our case, no money from municipality, it will be entirely paid by users. We only need colaboration from municipalities. If we wait for phone companies, we will never get it. After 3 years, prices will drop as equipment will be paid. So, why not? Municipal Wi-Fi is good for some people and fair for the rural people.

Fundamental problem with your question: Cities have already figured out how to get private firms to bear the risk. You write: "At a time when many cities are trapped for cash and facing pressing issues such as re-building infrastructure and other social issues, Wi-Fi access has become a priority." Sure, and metro-scale Wi-Fi paid for by the winning bidders/contractors (San Francisco, Portland, Tempe, Philadelphia, Anaheim, etc.) provides an easy way for cities to extend access without paying for it.

There's also another part if you want to understand the enthusiasm. Philadelphia pays for 500 to 700 leased wired lines among its buildings outside of the main city hall area. They will shift these wired lines to wireless broadband via EarthLink using not Wi-Fi but much more reliable point-to-multipoint links over Motorola Canopy equipment. Canopy forms the backbone of the Philadelphia (proposed) network. This will likely increase efficiency (many buildings will gain faster service) and will absolutely decrease costs, possibly by millions of dollars a year.

And one more factor. In cities like St. Cloud, Florida, that decided to contract to have a free network built, the many thousands of residents who will wind up giving up low-speed DSL or even dial-up in favor of using the local network will have more disposable cash to spend locally, thus reclaiming some or all of the cost of the network. We'll see if the math ultimately works, but that's the intent at least.

There are some good reasons for a free wireless network. For one thing, the idea that alllarge cities have lots of good and competetive is simply not true. On my block there are two choices -and both leave a lot to be desired. One has a tech support staff that is at least 75% useless or worse, but at least their baseline service is not that expensive, and they can get you going without TOO much hassle, although it still takes way too long to provision a line. The other has a system with absolutley no fail-safes in place. They managed to cut off a subscribers voice line when they enrolled a new neighbor on the same line - and it took almost a week and numerous calls from both the existing customer and the prospective customer to get that straigtened out. Their people are also utterly inflexible and trained to absolutley NOT use their heads. And they aren't too cheap either. By the way, if you look at the comparative costs for banwidth btween these cities and some other places, you will see that what we call "competetive" is actually not all that cheap.

And I live in a reasonably decent area. There are still reas in NYC where the choices are still down to one - if even that.

It's easier to build out a wireless netwrok than a wired one - and it has the added advantage of allowing for real mobility, not just the ability to go to the park with your laptop. For any business that does site based work - either service, delivery or sales calls, the ability to access data from anywhere is not a trivial issue. New York City has exacly one realistic option, and dealing with these guys is so difficult that many organizations simply won't bother. On top of that, this option is hardly "competetive".

Even the cheapest broadband, by the way, is going to be difficult for people on really tight budgets - and these are often people who could really use the connectivity. And, please don't tell me about using the library. For many reasons, that's either not an option (not every library has them, and besides they often have restricted hours), or there are other barrieirs to using the libraries.

Muni WiFi in a city blanketed with competition is curious indeed. However, chances are there is a business case somewhere that indicates its benefits. Often to the operations of the City even though no one ever says it.
In rural areas where there is definite need for Municipal contribution to aid broadband start (often providers need a boost for that initial first capital). In some cases the justification comes from internal needs that County or Townships have. Believe it or not GIS creates a huge demand. Not to mention with all the changes in recent years Townships are responsible for much more but lack the tools to deliver adquately. Having aided in the deployment of no less then 24 sites of rural broadband in Ontario, I can tell you tehre is an absolute need for those rural areas. If they could only get there hands on teh kind of money Toronto has to cover their territories, then we may stand a chance of regaining our most connected Country status with the ITU (it fell in the last survey, well out of the top ten) and perhaps position our children for a fighting chance in the shifting global economy. Or we can leave the rural areas and farmers to rot and do without and we can all perhaps start relying on other sources for our food and prosperity.... I think we can imagine what that might mean in another 50 years or so.....