Chaska powers down as an Internet provider

Ten years after it pioneered city-owned wireless Internet services for its residents, Chaska is preparing to wind down chaska.net next year.

The proposed shutdown is included in Chaska's 2015 budget and due to be approved by the City Council this week.

City Administrator Matt Podhrasky said that needed upgrades in equipment and changes in the overall wireless market led city staff to recommend the end of chaska.net.

"Our system was coming to the end of its useful life," he said. Upgrading it would cost about $3 million.

Meanwhile, the market for wireless Internet also has expanded significantly since Chaska launched its service in 2004.

The city was among the first locally and nationwide to own and operate a wireless Internet service for residents. Buffalo continues to operate its service for residents and small businesses, which it started in 2001. Minneapolis has one, launched in 2006, that also is still going.

St. Louis Park looked into establishing a futuristic solar-powered wireless network, but the service did not get off the ground because of a contractual dispute with the company the city had hired to build the system.

"We never wanted to compete with the private sector," Podhrasky said. "We just wanted to make sure our residents had access to [wireless Internet] until there were more options out there." He said the city concluded the time has come, with people now having a variety of choices, including bundled services at high speeds through cable modems at prices close to chaska.net's.

The city currently charges $19.99 a month, up from the $16 a month it charged when the service started in 2004.

Chaska.net's share of the local Internet market has shrunk in the last several years. Podhrasky said there now are about 1,100 customers, down from a peak of about 2,500. When it was launched, chaska.net had about 20 percent of the city's residential market. It now is about 12 percent. Podhrasky said the city didn't envision the service to make money, and that it basically has broken even over the years.

He said the shutdown isn't scheduled to occur until July 2015. The city will give customers a soft landing, sending them notices of the impending shutdown early next year so they have plenty of time to shop for alternatives. City staff also has proposed that the city not charge customers for the final four months and work with Google to help subscribers migrate their e-mail.

Podhrasky said current customers tend to be people who were more prone to have dial-up service and were less concerned about having high-speed Internet. "Now, there's faster service through cheaper methods at a reasonable price," he said.

The city still isn't sure what it will do with the chaska.net equipment, which includes computers at City Hall and wireless transmitters mounted on light and utility poles around town. The city put out a request for offers and got one for $5,000. "We think we can do better than that, find other uses for it ourselves," Podhrasky said.

While residential Wi-Fi service is ending, the city will continue to provide fiber service to School District 112 and KleinBank's data center.

Susan Feyder • 612-673-1723