While many in the muni Wi-Fi world are skeptical about a non-profit model, Boston is soldiering on in its attempt to “bridge the digital divide” by offering free or low-cost Wi-Fi to its residents using donated funds and equipment.

Last month, after a soft launch in August, the Grove Hall/Dudley Square Wireless Pilot Network celebrated its official launch with a “wire cutting” ceremony at the Lilla G. Frederick Middle School in Dorchester, Massachusetts.

The project, which is part of the Boston Wireless Initiative announced by Mayor Tom Menino in 2006, is overseen by openairboston.net (OAB), a private, non-profit corporation. The non-profit model was instituted on the recommendation of Menino’s “special Wireless Task Force.” OAB’s partners include BelAir Networks, MetroNext, and Galaxy Internet Services.

“We received donations of equipment. We also received donations in terms of services and time from a number of different entities,” says Pamela Reeve, OAB’s CEO. “We raised some money from the Boston Foundation and Partners Health Care. The bulk of our effort was supported by BelAir and MetroNext. There have been many, many people who contributed a little and a lot.”

According to its mission statement, OAB was created to “develop, implement, and operate a network to provide affordable wireless Internet access throughout the City of Boston.” The statement goes on to say that by “building a robust wireless network, along with critical elements like the Wireless Innovation Center, the Neighborhood Advisory Council, and a unique partnership with the City of Boston, openairboston.net will energize a wireless ecosystem which will help make Boston the most exciting hotbed of wireless innovation in the world.”

While the first phase of the pilot program will potentially serve roughly 21,000 people in 8,017 households in a one-square mile area of Roxbury, a lower-income section of the city [click here for a coverage map], the “ecosystem” is having trouble growing and is likely to be unable to sustain itself. Shortly after the launch, The Boston Globe reported that the muni Wi-Fi effort was “coming up short,” having raised only a few hundred thousand dollars toward the millions it needs to be viable city-wide. But, Reeve says not to worry.

“Everything relates to everything else,” says Reeve. “If we get really attractive uptake, that is a great proof point to go to potential funding sources with, especially now that so many cities have abandoned projects, it’s important to say here we’ve been successful–people want it and they are willing to pay for it. We are using the Grove Hall pilot as a proof point that we found a formula that can be successful. We are doing it a step at a time. Instead of raising $20 million all at once–that’s a hard ask. I’m optimistic that we’ll get what we need. We’ll have to see. Stay tuned.”

The Wi-Fi has been free to anyone with a Wi-Fi-enabled device in the area since the soft launch last summer. This week, however, it will become a low-fee service. Those interested in continuing to access the muni Wi-Fi in the Roxbury neighborhood will be charged $9.95/month for unlimited access with no contracts and no early termination or other hidden fees.

“The $9.95 rate was triangulated based on what we thought we needed to maintain the network and service level and what would be truly affordable and attractive to this area,” says Reeve. “We’re going to learn from that. We’ll figure out if we got that number right.

We wanted to make it as low as possible that also allows us to support the network.”

While currently ads are not factoring into the business model, Reeve says it is something they are considering. “Particularly when we have enough coverage so that we have an attractive ad environment,” she says.

During the open period, more than 3,000 users were on the network. “We’ll see what happens with a for-pay, low-cost system,” says Reeve. “I’m really hoping we’ll have good penetration. The numbers are phenomenal now, but now it’s free.”

The 59 802.11g access points deployed in the pilot were donated by BelAir. These APs are virtually identical to the ones that have been deployed in cities, such as Minneapolis, where performance and coverage results have been strong.

“At the Boston launch, they had phenomenal praise for the network. I expect it to perform the same as Minnesota—very good,” said Bernard Herscovich, CEO and President of BelAir Networks, who attended the wire-cutting ceremony last Month.

“The event was wonderful,” said Herscovich. “It was attended by the local government, at a local school. The students spoke highly about the benefits of the network in the community. The CIO of Boston gave a glowing review of the network, which has so many applications. They have a lot of excitement, really, that the end users can really benefit from the network.”

Among its articulated goals, OAB hopes to “accelerate economic development and promote innovation by providing an open network environment,” “leverage digital inclusion programs by making high-speed Internet access available and affordable to all,” and “enhance the City’s ability to provide innovative services and lower its costs”—aspirations that are becoming less common in today’s climate. While most cities that once had such lofty goals are shifting toward more business-minded plans in order to successfully fund their Wi-Fi networks, OAB remains optimistic that its business model can meet its goals.

Toward that end, OAB has worked hard to get Wi-Fi-enabled hardware into the hands of users in the Grove Hall hotzone, and to offer the education required for new users to take advantage of the Internet and Wi-Fi.

“The Technoloy Goes Home program gets parents involved. It gets hardware into the home,” says Reeve. “We have, I think, 500-700 people in that neighborhood who have been through that program and there needs to be more.”

Some small businesses are benefiting as well.

“Local businesses are using the network to support online banking, purchasing, that kind of thing, so that they can run themselves more efficiently,” says Reeve. “Our innovation goal is for interesting applications to be brought to markets and neighborhoods that are particularly useful to those markets and neighborhoods…We hope that the availability of a low-cost network will encourage creative applications and services, and that will be the stimulus for economic development.”

As OAB looks to expand into other areas of the city, Reeve says it will need a combination of funding, neighborhood interest, and community support. The new plan of attack is to, at least temporarily, abandon the dream of ubiquitous Wi-Fi in Boston and take “more like a hotzone approach,” says Reeve. “We’ll go zone by zone. We still have a lot to learn. We are looking for possible next hotzones.”

There is no timeline, however, for the next rollout.

“We’ve all but abandoned the hard and fast time frame,” says Reeve. “We’re going for an organic approach, the hotzone approach, where there is funding and interest, where people want it, when they want it.”

Naomi Graychase is Managing Editor at Wi-FiPlanet.