Spending on municipal networks will top US$235 million in 2006, up from a predicted $177 million in spending, according to a report released this week by Muniwireless.com. For 2007, spending is expected to hit $460 million, which is also higher than earlier expectations. In the next four years, total spending on municipal wireless networks will exceed $3 billion in the U.S.

Larger cities such as San Francisco, Portland, Ore., Dayton, Ohio, and Minneapolis have named partners to build or operate their citywide networks, while Chicago, Houston, Los Angeles and Atlanta are among many who have issued formal Requests For Proposals (RFPs) from vendors, said Esme Vos, founder of Muniwireless.com.

"Cities and counties throughout the country and around the world have begun to get it: Public wireless networks are an essential part of local quality-of-life and public-policy strategies," Vos said in a statement.

Nortel Networks Inc. said this week that it is increasing its investments in municipal wireless technologies and announced several municipal wireless deployments in smaller cities where it has developed a specialty. The company declined to say how much it is investing, except to describe the amount as "multi-millions of dollars."

Angela Singhal Whiteford, director of municipal wireless for the equipment maker, said Nortel's technology doesn't focus solely on outdoor WiFi, but also involves wireless mesh and Wimax technologies.