Kickstarting a municipal WISP by selling hosting services

[wizdum]

I'm not entirely sure if this is OK to post here, because I am technically advertising a service, but its for a good cause so i'm going to give it a shot. If I can't advertise, i'd still like to see what people think would be good packages to offer, and the prices they consider fair.

I work for a school department that currently provides free dial-up services to everyone in the town. The dial-up program was started 15 years ago, so it really needs to be replaced. We want to start rolling out wireless service, but we would need some start-up funds. I could write pages on this, but to keep it short: wireless service was offered to the town for a while, but the school's IT department couldn't keep up with the support/install calls. This time the day-to-day operations of the WISP will be handled by a non-profit organization, with the school providing infrastructure support.

The school has made money in the past selling colocation services and web hosting to private companies. They have a fairly nice NOC with the usual climate control, three phase power, standby generator, secure access, etc. We are thinking about extending these services under the control of the Non-Profit organization and using the funds to kickstart the WISP project.

For hosting services, we have a cPanel cluster and a vSphere cluster. We only have two class C blocks for IPs, so we can offer some dedicated IPs, but most people would have to be on shared IPs. We have two open racks now to for colocation as well. I have also been looking into Apache's Cloudstack and the OpenStack platform for selling cloud services. We're obviously not going to be able to compete with the big players, this is just more of a "help your local community" thing. It might also be something nice for students in the CIS/Networking fields to play around with.



What sorts of packages should I offer, and at what prices?


And lastly, would anyone be interested in helping us out by purchasing one of these services?

 

[Red Squirrel]

Hosting is a cut throat business, so unless you are getting those severs for really cheap monthly cost it will be very hard to compete with the $5/year unlimited everything hosts.

 

[CacaSapo]

I agree with Red Squirrel. I do the tech work for a friend's "hosting business", he's a reseller for Hostgator, and there's just no way to compete with the big boys unless you're offering something they can't, like web design or something like that. Who can compete with $4/mo(3 year pricing) "unlimited"hosting?

 

[goodcooper]

Just curious op, are all of these services running off erate subsidized connections?

 

[Ruoh]

Just curious op, are all of these services running off erate subsidized connections?

Very good question. I'd also wonder what the TOS from your downstream provider says about reselling, given C blocks appear to be fairly expensive these days.

 

[wizdum]

Just curious op, are all of these services running off erate subsidized connections?

They are not. For whatever reason, this school has a hard time getting anything that costs more than $50 out E-Rate.

We just have a few dumb pipes, the school has acted as an ISP since 1998. When we contacted our ISP to renegotiate prices (the school was on a 15-year contract!), they seemed to be under the impression that we own those IPs outright.

In addition to the IPs, I also have no power or facility costs. Most of our cPanel users are on an "unlimited" plan. The average use per account is like 2gb. The only issue is that none of them are actually paying us for service. We could probably do $5/month on those accounts, but it wouldn't be 99.99999% uptime. You get what you pay for. I might be able to compete on data storage costs (especially if the customer provides their own hardware), but I doubt it. I'm counting on goodwill here.

Thanks for all the help so far.

 

[goodcooper]

They are not. For whatever reason, this school has a hard time getting anything that costs more than $50 out E-Rate.

We just have a few dumb pipes, the school has acted as an ISP since 1998. When we contacted our ISP to renegotiate prices (the school was on a 15-year contract!), they seemed to be under the impression that we own those IPs outright.

In addition to the IPs, I also have no power or facility costs. Most of our cPanel users are on an "unlimited" plan. The average use per account is like 2gb. The only issue is that none of them are actually paying us for service. We could probably do $5/month on those accounts, but it wouldn't be 99.99999% uptime. You get what you pay for. I might be able to compete on data storage costs (especially if the customer provides their own hardware), but I doubt it. I'm counting on goodwill here.

Thanks for all the help so far.

where are you located? i may be interested in a colo

 

[Red Squirrel]

Hmm so you have your own bandwidth? That changes things a lot. It may actually be a viable solution. It's cheaper to buy servers and pay for them once, than to lease/colo and pay per month, so that means you can afford to provide lower hosting prices. In fact if the hvac is done properly the heat generated by the servers could help heat parts of the building.

 

[cyr0n_k0r]

They are not. For whatever reason, this school has a hard time getting anything that costs more than $50 out E-Rate.

I'm going to stay quiet in this thread but I'll throw this out there OP.
Tread lightly. USAC frowns upon what you're doing and if you submit for e-rate P2 service you have a very high probability that your application will be denied.

I'm also curious what state you are in. Most districts are legally barred from making any money from providing any kind of community service above and beyond the cost to provide that service.

 

[wizdum]

I'm going to stay quiet in this thread but I'll throw this out there OP.
Tread lightly. USAC frowns upon what you're doing and if you submit for e-rate P2 service you have a very high probability that your application will be denied.

I'm also curious what state you are in. Most districts are legally barred from making any money from providing any kind of community service above and beyond the cost to provide that service.

USAC doesn't have a stake in it, so I don't know why they'd care. But noted. We do have lawyers, so i'm sure they will look over the project.

We are located just outside of Bangor, and Oxford Networks is providing the service to the building.

The Non-Profit organization will be receiving the money, not the school The school will just be compensated for its bandwidth costs, beyond what it currently is using.

 

[QwertyJuan]

Brewer? Old Town? Hampden? Orono? Veazie?

 

[cyr0n_k0r]

USAC doesn't have a stake in it, so I don't know why they'd care. But noted. We do have lawyers, so i'm sure they will look over the project.

We are located just outside of Bangor, and Oxford Networks is providing the service to the building.

The Non-Profit organization will be receiving the money, not the school The school will just be compensated for its bandwidth costs, beyond what it currently is using.

because you mentioned e-rate.
And I guess good luck on this venture OP, but the entire thing sounds very shady. Schools are not businesses. The more you focus on this colo WISP project the less you're focusing on your teachers and your classrooms.

 

[wizdum]

because you mentioned e-rate.
And I guess good luck on this venture OP, but the entire thing sounds very shady. Schools are not businesses.

The only thing I said about e-rate is that we can't get anything from it. When I say $50, I mean $50. Not monthly, not per project, total. We're buying used VOIP phones off eBay to put on teacher's desks, because we can't get e-rate to pay for replacements for the 15 year old system. It cost them more to pay someone hourly to beg for money, than they were actually able to get.

The shady bit that we are concerned about, is that the building and internet are paid for by the tax payers. Even though we wont be increasing the tax burden on the town, we're still using facilities that were originally paid for with tax dollars. There is some precedent with public schools leasing rooms and tower space to cell companies, but its not 100% clear.

The more you focus on this colo WISP project the less you're focusing on your teachers and your classrooms.

Thats the reason behind the Non-Profit. We offer free dial-up to the town already. We tried free/low-cost wifi for a while, but it was taking our IT people off site too frequently. Now the school's IT staff can focus on their primary responsibility, and the Non-Profit staff can take care of the WISP business. Its always been a goal of the school to provide extended learning opportunities to the town, but they simply cannot do it with their current staff.

Brewer? Old Town? Hampden? Orono? Veazie?

Hermon. Yeah, I know. Small town of 4,000 people, yet for some reason we have three separate providers running fiber past our schools. I think it's because of all the companies that set up shop here to seek shelter from Bangor's taxes and regulation.

 

[goodcooper]

because you mentioned e-rate.
And I guess good luck on this venture OP, but the entire thing sounds very shady. Schools are not businesses. The more you focus on this colo WISP project the less you're focusing on your teachers and your classrooms.

he didn't, i did...


it's not a big deal either way, as long as you show how you're segmenting the networks and bandwidth... as long as USAC isn't obviously bankrolling all this i doubt they'd care...

but depending on what you're paying for bandwidth, you could save A LOT of money going after priority 1 erate, and it's incredibly simple.... it's priority 2 that's a huge pain and only gets you equipment... plus they can't afford to fund it or it takes years to get funded...

(EDIT: erate will NOT buy you phones for peoples desks.... really ANYTHING for people's desks.... P1 is for services and P2 is for network infrastructure crap...)

p2 at least for us is totally not worth the trouble... and we're in the 90% reimbursement bracket... ... in my original P2 plan i had $43k worth of swiches to swap out... i ended up finding off lease nortels that were 5x nicer for $150.... spent a few grand and we got L3 PoE switching ERRYWHERE

as far as running it out of the school... yea it's a little weird... it would make more sense if the county (i'm assuming you work for a county school) spun it off into a different department and had you paid out of both departments... i'm surprised the bean counters havn't absolutely throttled you guys... you must be in a really small school district?

 

[cyr0n_k0r]

The only thing I said about e-rate is that we can't get anything from it. When I say $50, I mean $50. Not monthly, not per project, total. We're buying used VOIP phones off eBay to put on teacher's desks, because we can't get e-rate to pay for replacements for the 15 year old system. It cost them more to pay someone hourly to beg for money, than they were actually able to get.

I know. E-rate is for infrastructure. They don't pay for phones.
However FYI a loophole you can use is that if you buy a qualifying intercom system they will pay for the handsets(phones) used for the intercom system.
They won't be super nice cisco phones, but you might find something cool.

I tried to play that hand when filing last year because we were doing an IP SIP based intercom paging system. I argued that since it was IP a Cisco 7945 was a qualifying handset. That didn't pass review.

The precedent you're speaking about with cell towers is MUCH different. The school district is just leasing land. They aren't building the facility, running power to it, or paying for any of the infrastructure costs associated with the towers implementation.
You providing co-lo services is the opposite. In fact, if a clever lawyer can prove that you have oversized or overbuilt your NOC to specifically make it more attractive to sell services within it you could hit with huge fines.
If USAC pays for your P1 internet bandwidth you might also have to give back any monies USAC has paid for your bandwidth costs. And there is no statue of limitations. They can go all the way 15 years and make you pay it all back.

Before you really go down this rabbit hole I would tell your districts finance director to talk to their lawyer and make sure everything they are doing is going to pass public scrutiny. You get one negative nancy with an axe to grind and they can petition the county and state department of education to audit you.

 

[wizdum]

I know. E-rate is for infrastructure. They don't pay for phones.
However FYI a loophole you can use is that if you buy a qualifying intercom system they will pay for the handsets(phones) used for the intercom system.
They won't be super nice cisco phones, but you might find something cool.

I tried to play that hand when filing last year because we were doing an IP SIP based intercom paging system. I argued that since it was IP a Cisco 7945 was a qualifying handset. That didn't pass review.

The precedent you're speaking about with cell towers is MUCH different. The school district is just leasing land. They aren't building the facility, running power to it, or paying for any of the infrastructure costs associated with the towers implementation.
You providing co-lo services is the opposite. In fact, if a clever lawyer can prove that you have oversized or overbuilt your NOC to specifically make it more attractive to sell services within it you could hit with huge fines.
If USAC pays for your P1 internet bandwidth you might also have to give back any monies USAC has paid for your bandwidth costs. And there is no statue of limitations. They can go all the way 15 years and make you pay it all back.

Before you really go down this rabbit hole I would tell your districts finance director to talk to their lawyer and make sure everything they are doing is going to pass public scrutiny. You get one negative nancy with an axe to grind and they can petition the county and state department of education to audit you.

Yeah, that was one thing. They made it quite clear that they would give us a $300,000 PBX "in the cloud", but that would be a colossal waste of money that would screw us if they ever stopped paying for it. We decided to roll our own Asterisk system for free instead, and just buy nice SIP phones for the 5 or so people that need them. Hell, right now its using a google voice hack to route calls (while we wait for the SIP trunks to get hooked up) and no one has complained. They wouldn't cover SIP trunks or hardware, unless we agreed to the entire $300,000 system.

They'd have a hard time trying to prove that the NOC was built specifically to house my equipment, since it was built when I was still in elementary school. Most of the room and power was originally taken up by analog TV broadcasting equipment that has since been replaced by a DirectTV DVR and a splitter. Everything is already in place, so they wouldn't have to make any special accommodations besides running a cable over to my cabinet. The school doesn't need to purchase anything new. Theres even two empty full size racks that were vacated by someone that used to colo servers here. The cPanel and vSphere clusters were purchased to provide services to the school, and have plenty of space. I'm also fairly low down on the pay ladder, so I have no say in any purchasing or building decisions. It would be a really hard sell to say I forced the school to overbuild anything.

Also, we're way to small to have a "finance director". I'm a network tech and I share a desk with the Director of I.T for the district. Theres 8 employees total in the district office, plus two more in the tech repair building. The Non-Profit will be adding three people for tech support.


Thank you for your feedback though.