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Wireless Networking Businesses The Internet Hardware

NYT: Making Free Wireless Wi-Fi Internet Pay 152

Posted by timothy from the aye-there's-the-rub dept.
securitas writes "The New York Times' Matt Richtel writes about the the challenges of finding a sustainable business model for 802.11 Wi-Fi wireless Internet. The problem for entrepreneurs, telecom companies and others is that the proliferation of free wireless access hotspots at the municipal and grassroots level has obviated commercial carriers' revenue and profit models in many cases. One user quoted in the story sums up the attitude of many wireless users: 'The Internet is free here.... Why would I pay?' IHT, published by the New York Times in Paris, is carrying an abbreviated version of the story."
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NYT: Making Free Wireless Wi-Fi Internet Pay More

NYT: Making Free Wireless Wi-Fi Internet Pay

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  • why people will pay (Score:5, Informative)

    by mandalayx ( 674042 ) * on Monday June 07, 2004 @07:43AM (#9355172) Journal
    Many reasons. For example, a whole lot of information is free, but many people pay for information.

    *Reliability - Someone guarantees that it's going to be there for you.
    *Convenience - More hot spots. Less time configuring. Paid services are often suited towards the mainstream user--one who might be scared of the prospect of finding hotspots.
    *Speed - Don't these free hotspots get bogged down and/or are throttled?
    *Security - I actually don't know a single thing about this, someone please help me out on this one.

    Obviously you're not going to get everyone to pay, but that's okay. Not only are there those who don't mind paying, remember that there are plenty of places still left with non free WiFi. (I'm talking about people who intentionally leave their AP open)

    Just because something is free doesn't mean that it's bad. The failing businesses just didn't do their homework on the market. I was disapointed, though, to see a leading pay WiFi provider spread this piece of FUD:

    Mr. Sims said he is not worried about the growth in free hot spots because he believes commercial networks can offer more reliable, more secure Internet access. Free service is fine for casual and periodic use, he said, but "when you absolutely, positively have to get that report downloaded or get access to your company system to conduct business, free probably isn't going to cut it."

    Even if that statement is completely false, it will probably hit a chord in that Reliability bullet point above for the "mainstream" user.

    I'm not sure that this is a "Tech" story as much as a Business story. The article's basic thesis is that the opportunity for pay WiFi businesses is getting dimmer. That's a message to short the stock of some of these guys or to not go and do my own version of T-Mobile Hotspot.

    I think there are some (smaller) opportunities left, though, so I'm interested to hear what kind of niche businesses slashdot readers are profiting from. Final quote, which predicts the commodititization of WiFi:

    While Wi-Fi "offers a revenue generating opportunity," he said, "it's real benefit to SBC is as a customer retention and acquisition tool."

    Sounds quite a bit like what that Sun guy said about hardware last week.

    • Re:why people will pay (Score:5, Insightful)

      by tronicum ( 617382 ) * on Monday June 07, 2004 @07:48AM (#9355192)
      A good idea is to split it up :

      • a free internet with proxy, maybe bandwith limitation and no security
      • a pay as you go option with no limits and security
      • a montly billed agrement for people who are using it on a long time basis

      The problem in the future might be that there is limited capacity for the wifi spectrum on the one hand and that for short time usage (at least within Europe) UMTS beomces affordable...

      • This is precisely why we make our free downtown wifi limited, both in terms of total throughput and in terms of ports accessible. This leaves a viable niche open for commercial for-pay options, and ideally those commercial providers will offer a free option as well. Assuming they find any viable way to deploy such a short-range technology at all.
    • IMHO, this is just plain evil: due to the modern market model, absolutely everything once has to become paid... Don't you think this is a kind of abuse? P.S. In Soviet Russia... I want to live in Soviet Russia ;-)

    • Re:why people will pay (Score:5, Insightful)

      by JiffyJeff ( 693994 ) on Monday June 07, 2004 @07:52AM (#9355207)
      This *IS* a business problem... I agree!

      I travel by air frequently and would love to hop onto the hotspots that are available within terminals, however the rates are just too high! The time I spend while waiting to board is limited to 2 hours or less usually -- why would I want to pay $20 for a day-long "pass" at this location? Seriously, all I need to do is check my email and maybe hit slashdot. (And no, I don't want to do it on my phone)

      If these guys got a clue, they would realize that everyone of us "out there" realizes that this is essentially a "free" service. Short of of the hardware infrastructure and the collection of my billing info -- how much cost is really being incurred by my login?

      Don't most porn pages offer a limited subscription for less than $10? Can it be any more difficult than this for Wireless operators? After all, there's probably a lot less data transfer involved.

      • Re:why people will pay (Score:5, Insightful)

        by mandalayx ( 674042 ) * on Monday June 07, 2004 @08:00AM (#9355229) Journal
        There are actually a few airports that do free wireless. Do a quick search and you'll find them. Since we both agree that this is a business problem, let's look at your particular business case. Is free Wifi a good enough incentive for you to switch airports?

        Probably not. Which is why I don't think you'll see Free Wifi at every airport.

        You hit the nail on the head when you said that Wifi, relative to many other costs of an airport, is nearly free. But profit-seeking businesses look to charge what the market demands, regardless of how much it costs to meet that demand.

        We've seen prices below cost from Microsoft and prices wayyy above cost for...say...porn.
        • I believe that economists would argue that choice of airports are quite possibly a fantastic example of an "inelastic demand curve."

          In other words, If the local airport doesn't offer wifi, but one 500 miles away does, am I going to take a Taxi? No way!

          Most business travelers choose airports based on the cheapest flight (with their preferred carrier, if possible -- so they get the points).

          I would doubt most business travellers have a checkbox on their expense reports listing an addendum: "but this

          • Re:why people will pay (Score:5, Interesting)

            by mandalayx ( 674042 ) * on Monday June 07, 2004 @08:10AM (#9355268) Journal
            I agree completely.

            And I think the arguments you cited are the reason why we won't see Free Wifi at most airports.

            I think many secondary and minor airports will do it, though. (i.e. Long Beach, which is a minor airport near LAX)

            What I am looking forward to is Free Wifi on the airplane. the technology is there [usatoday.com].

          • Re:why people will pay (Score:4, Interesting)

            by lizrd ( 69275 ) <[su.pmub] [ta] [mada]> on Monday June 07, 2004 @11:18AM (#9356533) Homepage
            Free Wi-Fi at a hub would get me to change airlines.

            I generally fly United I have my points there and my company has contract rates with them so I usually take a connection from my local (small) airport through ORD or DEN to get where I need to be. My company also has contract rates with Northwest and if MSP and DTW offered free Wi-Fi that would be sufficient reason for me to change airlines.

            • Actually some of the regional airports are doing this. It is a push by the regionals to get people to fly out of them. Your point about a hub would be interesting though. As you point out, it would be interesting to see how much traffic a carrier could pull from the others if they offered free WiFi at one of their hubs.

              I personally believe that free WiFi is a bonus that can be provided by a variety of businesses. In large markets, you can get a WiFi provider to come in and setup and run a pay for use s

              • Actually some of the regional airports are doing this. It is a push by the regionals to get people to fly out of them. Your point about a hub would be interesting though. As you point out, it would be interesting to see how much traffic a carrier could pull from the others if they offered free WiFi at one of their hubs.

                Yeah, I've seen that some of the regionals are doing this. Strikes me as little bit pointless, the real appeal of the regional airport to me is that I don't have to spend time there. The secu

        • Question: Are there any restrictions on what kind of radios you can use on the grounds on an airport? Is there any reason why the bagel guy can't put up a free hot-spot with a "Have a fresh, toasted bagel with cream cheese, you know you want it!" graphic on the login?

          This seems like a no brainer. Is there some tenant agreement clauses that stop this?
          • Are there any restrictions on what kind of radios you can use on the grounds on an airport?

            Ummmm..... probably? I don't think you'd want the bagel guy clearing 747's for takeoff.
      • The cost is not in the login but rather in the bandwidth which is consumed by the connected users. Even though the data is traveling through the air during the WiFi session it has to make the transition to the fiber networks eventually and the owners of those network backbones (large telecommunications companies) have investors who would like to see a return on the billions of dollars which were spent constructing the fiber networks. T-Mobile charges you $30 per month because with their current number of su

    • Re:why people will pay (Score:3, Interesting)

      by Ewan ( 5533 )
      The security side is a joke - If you are connecting to work to download that critical report, you're going to be connecting to a VPN, whether it's IPSEC, PPTP, or SSL based. Each one of these is more secure than the WEP or WPA based security that a commercial hotspot will be providing.

      Ewan
      • The security side is a joke - If you are connecting to work to download that critical report, you're going to be connecting to a VPN, whether it's IPSEC, PPTP, or SSL based. Each one of these is more secure than the WEP or WPA based security that a commercial hotspot will be providing.

        You would think that would be obvious. But given the number of complaints from people who are against various anti-spam proposals that would force them to send their corporate/organization e-mail through their organization

    • Re:why people will pay (Score:4, Informative)

      by femto ( 459605 ) on Monday June 07, 2004 @08:12AM (#9355275) Homepage

      *Reliability - The ISM band (2.4Hz and 5GHz) is shared spectrum. By it's nature one cannot provide a gurantee of service.

      *Convenience - Maybe, but with so many comrecial providers, one probably has to reconfigure anyway.

      *Speed - All 802.11 access point share spectrum, so if a free hotspot is bogged, so are the commercial ones.

      *Security - Most of the free hotspot providers are knowledgeable hobbyists, who know more about wireless security than many so called experts.

      The basic problem for commercial hotspot providers is that they are trying to make money off a free public resource: the ISM bands. Being commercial hotspot provider is a little like claiming a free lunch, then complaining when others also claim their free lunch instead of buying it from you.

      • *Reliability - The ISM band (2.4Hz and 5GHz) is shared spectrum. By it's nature one cannot provide a gurantee of service.
        OK. But how do you know that the hot spot will even be on? Paying somebody you trust (i.e. T-Mobile) may improve the chances of this, if you choose correctly.

        *Convenience - Maybe, but with so many comrecial providers, one probably has to reconfigure anyway.
        Again, the T-Mobile example. They're as ubiquitous as Starbucks.

        *Speed - All 802.11 access point share spectrum, so if a free ho
      • I don't know about you, but I buy bottled water?!

    • Roads are free (Score:3, Insightful)

      by AmericanInKiev ( 453362 )
      Its very hard to get people to pay to use a road - sure there are .1% toll roads - and maybe we will end up with .1% toll WiFi Spots.

      But as a people - we need to realize that communication, like travel, is a net benefit, and the cost/benefit is highest when use is convienent and costs are shared.

      Making WiFi a national project - like going to the moon - really has more merit, more justification, and would in the end provide more benefit - at a ridiculously low price.

      Sure - some argue they don't want to pa

  • Came to the right website to ask... (Score:2, Funny)

    by Anonymous Coward
    1. Make free wireless Wi-Fi
    2. ???
    3. PAY!!

  • You get what you pay for. (Score:5, Insightful)

    by Whitecloud ( 649593 ) on Monday June 07, 2004 @07:46AM (#9355189) Homepage
    A free internet wifi connection... but then you are buying coffee and a muffin, so you ARE paying. The cost is absorbed by the cafe. A big business might be able to run at a loss to gain customers, your local cafe sure as hell can't. And really, if you think about it, how much is a coffee and muffin? Is it cheaper than 1 paid hour for web access? Sure, you might have bought a cappacino anyway, but its the little extras you buy that make it worth the cafes while to offer *free* internet.

    • Re:You get what you pay for. (Score:4, Interesting)

      by adzoox ( 615327 ) * on Monday June 07, 2004 @07:52AM (#9355206) Journal
      But what is the cost of adding a router? ALL businesses should have access to the internet. There should just be a one time expense of the router.

      So you are correct in a sense that you get what you pay for - cheap router, maybe not always stable, or slow access. At pay sites, like Waypoint for instance - these models work fine because they have exclusitivity in Airports around the country and the access is controlled by very nice quality high end equipment. So you truly are getting what you pay for.

      I agree with a post above - businesses will offer wifi just as they offer bathrooms and air conditioning to their customers.

      • But what is the cost of adding a router? ALL businesses should have access to the internet.

        Holy Bajeebus! are you crazy?

        adding a open wifi hotspot onto your company lan is the same as running it completely on the open internet with no patcehs or security.

        offering a wifi hotspot requires more gear to make sure those pesky customers dont infect all your machines, spam the world from your IP, and lots of other nasties.

        A linux guru could do it for dirt + time, but most companies want a turn-key solution
        • You have your access from one access point you give free access from another. Most routers (including the recently hacked Linksys) routers provide MORE than adequate protection with the built in firewall.

          Besides a business that has sensitive data connected to a machine 24/7 internet is asking for data to be stolen.

          All one has to do is cut the airport signal off in OSX for instance.

          We're talking about large corporations here either, we are talking about Starbucks INDIVIDUAL coffee shops or less.

          (Yes Yes,

      • I agree with a post above - businesses will offer wifi just as they offer bathrooms and air conditioning to their customers.

        Very true. I just set up a free wifi system for a sports bar & grill that I work for. I used a Linksys access point, a 1 gigahz junk PC, a couple of random ethernet cards and the ZoneCD from the PublicIP project [publicip.net]. Set it up and got everything configured in an evening. Works great, no hard disk needed, the access is personalized with the bar's logo.

        It would cost them more than t

    • Your example is insightful in the realm of free Wifi in the coffee shop.

      But there are more than a few APs being left open by non-commercial providers. Since the article is about New York, NYCWireless [nycwireless.net] is a good example.
    • I think that's the proper way to look at this: a value-added service that is paid for in the cost of the product or service you are buying. I understand that there are going to be free hotspots, but providers will have to get one over on those spots by selling security and reliability.
    • Take that a step further though. You're assigning value to an hour of access. Having it built in to the cost of a coffee and a muffin is apparently an acceptable price for people to pay. It would also seem that it's profitable, or at least break-even, for the provider. On the other hand you have T-Mobile apparently charging $6 an hour or $20 a day to access their network. There's a vast price gap there. Clearly the value to the user is soewhere between the overcharge on coffee and a muffin (a few cents an h
    • I expect T-Mobile to offer Wireless Internet Access to their Cellular customers at cheap rates, so that their service becomes more attractive.
    • Although I'm all for more freely accessible Wifi, it seems to me, that people are all off in a huff when MSFT bundles IE with their OS making it impossible to run a business simply making OS, but people are quick to forgive a company offering bundled wifi with their product making it impossible to run a business selling only wifi.

      There is a point to bringing this up (it isn't just flame bait) and a suggestion as to why wifi isn't as prevalent in certain areas as others and suggests a possible business mode
      • it seems to me, that people are all off in a huff when MSFT bundles IE with their OS making it impossible to run a business simply making OS

        No. You misunderstand public perception.

        Nobody thinks that bundling IE & Win impacts the "making OS" industry- it effects the web browser industry (or consequential lack thereof).

        And besides, Microsoft is a convicted monopoly, and it performed assorted crimal, fraudulent, or simply immoral acts to get that way. Thus it deserves harsher treatment than other bu
  • I'm not sure where I read it the first time, but the model I keep coming across for wifi is that it will follow the same business model as air conditioning.

    Businesses will offer it because it would simply be bad for business not to.
    • This should be Insightful, not Funny. Or maybe that's because I fully agree - it's getting to the point where it's cheap to add WiFi access for businesses and people are starting to expect it.

      I'm going to be staying in a hotel in Indianapolis soon, and they have a free wired ethernet connection in every room. About two years ago, I stayed in a hotel with a similar setup, except it cost $10/day to use the connection. I wonder if the pressure of free wireless access has forced the hotels with wired connec
      • I didn't think I was joking either. Although if we take the pay-models being tried for WiFi, and try them on AirCon (where a hotel, restaurant, or store would charge you for it separately), I guess that might be pretty funny. And also sad and unprofitable.
      • This is exactly the opening I was looking for - it exactly describes what happened to me last week. I was going to stay in a hotel for a three day weekend, looked around and found a nice one (Hilton for those wondering.) In the online and paper marketing it proclaimed proudly 'high speed Internet access available' right after proudly proclaiming 'beautiful rooms' and 'air conditioning.' I show up, pay my roughly $350 for three nights and those fuckers had the audacity to preempt my online surfing with a
      • Actually, there's more to say on charging for aircon. Last year my wife and I spent a good deal of time in SE Asia for business and recreation. And it was very common to see aircon rooms rent for more, but not much more, and in N.America terms it was usually $5-10 on top of $20 rooms. I can't remember the last time I saw rooms in N.A. without aircon (maybe 20 years?).

        Internet (let alone wifi) was virtually non-existent except Singapore and HK where it was everywhere and free.
    • I think that is right.

      I don't have the numbers, but I have to believe that it is cheaper to provide reasonable speed wi-fi to an entire motel/hotel than it is to provide air conditioning -- the initial hardware, maintenance, and electricity costs of AC are all much higher. The cost of commercial DSL or cable can't really make up the difference.

      The $20/day for internet access that some are quoting is ludicrous. That's a crazy amount of profit (assuming anyone is willing to pay) akin to the hostage pricin

  • one small problem with to many free wifi access (Score:5, Interesting)

    by mpost4 ( 115369 ) * on Monday June 07, 2004 @07:49AM (#9355198) Homepage Journal
    I had one person tell me I had no right to lock down my WiFi access points at my home and the 3 WiFi at my church because the internet should be free, and I was dening people access to the internet by not alowing them access to a pipe they were not paying for.

    • Re:one small problem with to many free wifi access (Score:5, Insightful)

      by millahtime ( 710421 ) on Monday June 07, 2004 @07:55AM (#9355214) Homepage Journal
      Then look at it from a security standpoint. Because it's your home and church you need to have the security because of liability. What if someone searches for kiddie porn, or shares music and the RIAA comes after you or a million other things.

      If the US at least if its yours then you are liable. That's why those places that offer it free have an agreement first.
      • If the US at least if its yours then you are liable.

        Care to back this up with citation? I'm not saying you're definitely wrong, but I have a hard time believing you're right.

        Remember, we're talking about conviction -- it doesn't count if you find someone the RIAA indicted because someone else used his line. Ideally, he'd just show evidence that it was someone else in court and the tort would be dropped.

        • Sorry, but regardless of your guilt or innocence, you're still liable for a large fine in this case: it's called "legal fees". If the RIAA sues you for activity on your broadband connection that one of your neighbors did, it'd probably cost more to defend yourself in court against the suit than it would to just pay the $3k settlement.

          So, would you rather pay $3k to the RIAA for your neighbor's downloading, or would you rather take a few minutes and set up the security features to prevent your neighbors fr
          • Duh. But "likely to be dragged through court" is very different from "legally liable" -- i.e. in violation of the law -- which the parent poster alleged.

            Frankly, even if we run with your irrelevant question, I think the odds of getting nailed by the corporate gunners for something my neighbors do on my wireless hotspot are low enough that, in terms of cost-benefit, it's actually not even worth the few minutes it'd take to secure.
            • You're absolutely right. "Likely to be dragged through court" is more like "a miniscule possibility of getting draggged through court". There are so many free APs that the odds of one particular one being singled out are fairly low.

              Of course, the large number of free APs also makes security easier: If all you're protecting is a DSL line, you can get away with using something crap like WEP, because everyone wanting free Internet access will go after the completely open APs first.
      • I'd guess that your home and church have tall, strong fences surrounding the entire property, and gates that are always locked, right? I mean, if not, then people can sneak in when you're not there and start selling kiddie port or pirated recordings from the driveway or parking lot. Right?

        Hmmm ... Why is it that chuch parking los always seem to be open, unfenced and unguarded? Aren't they worried about the liability? Are they secretly supporting the selling of porn and pirated recordings on their proper

        • I'd guess that your home and church have tall, strong fences surrounding the entire property, and gates that are always locked, right? I mean, if not, then people can sneak in when you're not there and start selling kiddie port or pirated recordings from the driveway or parking lot. Right?

          No, but it is easy to keep an eye on the whole proporty since the pastor lives there, and during the days there is alot of activity, and we have motion trigered lights, so at night if a light comes one there is reason to

    • Did you point out that the internet isn't exactly free? Or that he was denying people access to the phone system by not letting people use his phone.

      I suppose you could have offered to set up a wifi point in their house - and leave it open for the world...
    • I had one person tell me I had no right to lock down my WiFi access points at my home and the 3 WiFi at my church

      You have every right to try but why bother? I'd think that a church going person would know their neighbors well enough to trust or not trust them. In either case, there is little harm they can do to you through your wireless that could not be done to you by complete strangers anywhere on the internet. Unless you pay by the byte, you won't even notice your neighbor's traffic. I'd rather cha

      • it not the neighbors we are conserned with, it is that war driver looking for kiddy porn we don't want on. If one of the neighbors came and asked about the network, and asked to be on, I don't think I would have much problem with it.

  • Security will be the profit center (Score:5, Interesting)

    by buelba ( 701300 ) on Monday June 07, 2004 @07:50AM (#9355200)
    The article makes no mention of security which, it seems to me, will be the best way to make money in the hot-spot business. When I use a public, non-WEP hotspot, all I ever do is SSL to my command-line account and run pine or some such. (My internet provider hasn't done secure POP yet, but they're working on it.)

    On the other hand, maybe there's no money in security either. When traveling for work, I can use secure VPN into the company system, and it doesn't matter whether my hotspot is secure or a total cesspool. So there's no reason to pay extra for T-Mobile on the company dime, and I'm certainly too cheap to pay extra when on my own dime -- I'll just use SSL to check email.

    It is a conundrum. Perhaps WPA is the solution, but I'm not waiting up nights for it to be widely implemented.
    • Just a thought, WPA and SSL connections and even VPN connections protect the following : the conversation stream between your keyboard and the server you are connected to ...

      If your laptop is running XP Home and you have any shares on your laptop, anything in those shares is fair game to anybody else on the network. Who cares if they can't read the datastream of your Internet surfing in real time when they can sift through all the files you shared to make it easier to move stuff around between computers a
      • >If your laptop is running XP Home and you have any shares on your laptop, anything in those shares is fair game to anybody else on the network.

        Good point -- I completely forgot about that aspect. (I use a Mac on the road and I have all the ports turned off, so I generally don't worry about incoming threats.)

        But you're right -- when I travel with a PC, I always feel like I should carry around a linksys nat/minihub box. There's a business opportunity, a virtually private WiFi. Of course, you'd have t

    • When I use a public, non-WEP hotspot, all I ever do is SSL to my command-line account and run pine or some such.

      Let's just say that Pine doesn't have the most stellar security record:

  • Just take a cue from the MPAA and RIAA (Score:3, Funny)

    by YetAnotherName ( 168064 ) on Monday June 07, 2004 @07:53AM (#9355212) Homepage
    If you can't find "a sustainable business model" lobby to make free hotspots illegal.
    • The FUD required for such stupid laws is already out there. Bullshit about "security", "liability", kiddie porn and terrorism is common, even here on Slashdot. The US government has already issued warnings about free access. Hopefully, people will have enough sense to realize that no new threat is created by wireless hotspots.

  • Nothing is free (Score:3, Insightful)

    by Anonymous Coward on Monday June 07, 2004 @07:55AM (#9355218)
    Everything costs money...deal with it. The "Internet" was never free and never will be. Fiber optics, switch gear, etc...all cost money. I am a network enigeer by trade...I know first hand how much equipiment and staffing can cost. The saying "you get what you pay for" is very true in the networking world.

    • Re:Nothing is free (Score:4, Interesting)

      by laigle ( 614390 ) on Monday June 07, 2004 @08:35AM (#9355390)
      Don't forget that for the normals, free is synonomous with paying for the service through price increases in other areas. There are hoards of people (and I use the word in its most flexible sense) that will gladly pay $10 for a cup of coffee because that coffee shop has "free" high speed wifi, which they need to check their text based email every ten minutes for fresh spam.

      Especially if someone tells them that helps their cell phone reception.
    • There's free wireless at Bryant Park [bryantpark.org], as well as plenty of other locations [nodedb.com]. Deal with it.

  • It's not just the carriers (Score:5, Interesting)

    by ZackSchil ( 560462 ) on Monday June 07, 2004 @08:02AM (#9355238)
    I was staying at a hotel a few weeks back and I had my laptop with me. For $10, I could get wired broadband in the room for 24 hours. Seemed a bit steep to me so I waited until I came to a point where I absolutely needed the internet. I was sitting at the desk on the other side of the room (near the window) when my laptop, an old G3 Powerbook with a Linksys Wireless-G card, told me that a wireless network was suddenly available, 50% strength. Curiously, I connected to it and it didn't require a password. As soon as iChat signed on, I noticed that someone using the router had a Mac too and was signed on Rendezvous IM. I started up a chat and explained my predicament to him. He said it was great to meet me and I could use his new wireless access point as much as I wanted, as long as I kept my bandwidth use under control.

    And that's pretty much how a lot of people feel about wireless broadband. As long as you don't inconvenience them, you're free to use their network. It's that attitude that basically makes paying for wireless access an unsustainable business model. I wonder how long until ISPs band together to make open connection sharing illegal and scare everyone into thinking that sharing their connection is morally wrong.

    • Re:It's not just the carriers (Score:5, Interesting)

      by Anonymous Coward on Monday June 07, 2004 @08:07AM (#9355254)
      I can see the ads already...

      "When you share your internet connection with someone, you're sharing it with everyone they've ever shared their connection with."

      "Sharing your internet connection facilitates the spread of viruses. Do you want to lose all your files to the untrusted menace?"

      "This is your computer. [SMASH] This is your computer sharing its wireless internet connection. Any questions?"
      • Or, when they get really desperate:
        "When you share your internet connection, you're promoting communism!"
        • Just follow the FACT lead. UK Cinemas carry the following warnings amongst other junk before every film:

          "Piracy funds Organized Crime"

          "Piracy funds Terrorism"

          "It is illegal to use any recording equipment in or near this building"

          and other similar warnings - spoken and displayed as text. It's only going to get worse too.

          I've heard people in the cinema laugh out loud at these warnings though.
    • >>I waited until I came to a point where I absolutely needed the internet

      So it is just like with the pay toilets of yore.

  • When your customer is your engineer... it happens (Score:5, Interesting)

    by samjam ( 256347 ) on Monday June 07, 2004 @08:03AM (#9355243) Homepage Journal
    This is the kind of thing that happens when much of your customers are also your engineers (or interchangable with them.)

    Its what happens when your service-providing hardware becomes commodity.

    Have we ever been able to benefit from such a super-scaled economy before? I don't think so; it will take some getting used to.

    Welcome the new generation, no longer hostage to high setup costs; We can do it ourselves.

    - OK, admittedly because the hi-tec industry keeps churning out the pieces; this is the bottom of the technology/market food chain, but its never looked so good before.

    Everything is marginal and there are enough people to eat the margin.

    Sam

  • Snooze you lose (Score:3, Interesting)

    by ifwm ( 687373 ) on Monday June 07, 2004 @08:07AM (#9355257) Journal
    So, how long has 802.xx equipment been available? I would understand if this were a budding technology that was just breaking, but I have had a wireless router for 2 years, and I am certainly not an early adopter. The truth is that businesses that should have been on this bandwagon all along are only now seeing the potential for profit. Sorry guys you missed the boat on this one. Also, I would argue that there is already a great business model in use. Free wi-fi for customers of your restaurant/cafe/bookstore etc.

  • Telecom or infrastructure? (Score:3, Interesting)

    by Alkonaut ( 604183 ) on Monday June 07, 2004 @08:14AM (#9355282)
    Is finding a sustainable business model always the answer in internet infrastructure? Compare with roads and other infrastructure, surely we could have a complicated system of roadbuilding, fees and such, or we could just all pay up and build the damn things, because no other business model would be anything but complicated and annoying (I have never once had to stop my car to pay a toll/fee, but I suspect it would annoy me).

    For whatever reason, market economy is always assumed to solve all problems related to electronic infrastructure. And that assumption is the reason why dsl services are still embarassingly overpriced in the US.

  • Add Value (Score:5, Insightful)

    by nuggz ( 69912 ) on Monday June 07, 2004 @08:16AM (#9355292) Homepage
    To compete you must add value, or offer a lower price.
    Competing with free removes the price driver.

    I don't see that many options to add value. But it isn't my job to dream up business models for others.

  • A model that I like (Score:5, Interesting)

    by LincolnQ ( 648660 ) on Monday June 07, 2004 @08:17AM (#9355307)
    This is a repost of a comment I made that nobody modded :-)

    Free hotspots are acceptable in places where it's not much of a marginal cost, and where people wouldn't be able to 'leech' very much (i.e., hotels and such.) But in places where there are a lot of randoms, that is no good.

    I've also seen pay-to-access credit card methods, but I wouldn't want to use them -- that is mainly for business users.

    An advertising based hotspot as in this article seems very annoying, but it would also be pretty easy to hack Mozilla and get around the advertising overall.

    How else can we pay for wireless? Here -- My idea, never heard it elsewhere, I think it's good:

    A wireless hotspot 'jukebox' (or parking meter, or vending machine, or whatever metaphor you would like).

    It is simply a box with a coin deposit -- anyone can go up and put a coin in, and the machine gives everyone in range Internet access for X amount of time. (1 dollar for 15 minutes? If people actually USED dollar coins, it would be good, I think).

    Anyway, I believe the social model of this would be interesting: the person who needs it most and who can probably afford it the easiest (doing business or whatever) will end up paying for everyone as long as they want to use it. If there is no 'business user' at the time, the people who just want to use it casually will probably just volunteer to pay for one unit at a time.

    This method is convenient, easy to implement, cheap to build, and easy to use. Admittedly, business users would probably rather have a credit card and authentication system that would allow them to charge it to the company, but I think that casual users would spend quite a bit more than they currently do. It is pretty cheap for them.

    Anybody hear of anything like this implemented anywhere else?

  • Meshing to make communal resource (Score:3, Interesting)

    by Anonymous Coward on Monday June 07, 2004 @08:24AM (#9355341)
    Maybe theres a future in mesh Wi-Fi as a possible help to business models. Im not sure about the legalities of reselling services, but say a bunch of businesses get together and offer coverage of a 2km radius in a town, they could get other businesses to chip in and spread the cost so it becomes very little per business. I saw somewhere that a local tourist board were subsidising such a venture so they could call claim to be a 'Wi-Fi Internet enabled town'. I know its not traditional business, but ideas like this are needed to help spread the cost of free public access.

  • Just need to get the business model right. (Score:3, Informative)

    by mobileone ( 615808 ) on Monday June 07, 2004 @08:40AM (#9355419)
    Current business models of non-free public hotspots assume that the HotSpot is operated by a Wireless Internet Service provider, with some kind of revenue sharing with the venue owner. In other words the business relationship is not between the end-user and the venue owner, but instead between the end-user and a third party (the WISP).

    This business model is in strong contrast to other goods and services which are sold at the venue. At a hotel everything from breakfast to video on demand is sold directly from the hotel to the hotel guest. This gives the hotel a strong incentive to promote the products and make sure that the product works. With WiFi today most of the revenue goes to the WISP which also has the support obligation towards the end-user.

    Wifi access needs to be sold directly by the venue owner to the end-user, and the venue owner also needs to be the primary responsible for the quality of the product.

    Have a look at personal telco [personaltelco.net] which has a great review of open source HotSpot software.

  • Free is not the future (Score:5, Interesting)

    by div_2n ( 525075 ) on Monday June 07, 2004 @08:45AM (#9355441)
    Free is not the future so long as it is run by private entities. There are several reasons why this is so:

    -security -- sure someone isn't sniffing your data and/or hammering your system for vulnerabilities while you surf?

    -reliability -- when the access point you are connecting to locks up, who do you call?

    -quality of service -- does the person operating the AP you are connected to have SSH blocked? What about FTP? SMTP? You just don't know.

    It seems to me what is REALLY happening is that free wireless Internet is making plain access a comodity such that high premiums won't last. Look for services beyond Internet access to appear widespread.

    Also look for one of two things to happen -- either providers using the free spectrum will have to charge tax for providing service OR wired companies will become exempt from having to charge them.
  • ... with the info in this recent slashdot article [slashdot.org].

  • Free Hot Spot Directory (Score:2, Informative)

    by asdren ( 35537 )
    http://www.wififreespot.com/
  • Until someone [www.iso.ch] comes up with an Internationally Recognized symbol that you can paint on the wall, put up in the window, or otherwise make known [www.iso.ch], which means "WI-FI ACCESSIBLE HERE ... USE DHCP TO GET AN IP ADDRESS", and by 'recognized' I mean on the same order as that of other major international symbols [istockphoto.com] ... then, WI-FI is forever going to be a 'fringe' service.

    I'd use WI-FI, everywhere it was available, and I'd pay for it too, if only it was really easy to see where WI-FI was going to be accessible. Someone come up with a good WI-FI branding strategy first and then we'll see successful WI-FI economic models come into place ... but until then, users of WI-FI are still going to have to be experts of the ether in order to 'know' when and where they can get on the 'net ...

  • Some will pay for ubiquity; others will enjoy free (Score:5, Interesting)

    by eggboard ( 315140 ) * on Monday June 07, 2004 @09:34AM (#9355742) Homepage
    It's not binary choice; it's a duality. As I write about all the time on my Wi-Fi weblog [wifinetnews.com], a certain category of Wi-Fi hotspot user will wait for reasonable roaming plans and then pay for it (or their business will more likely pay) because it gives them a predictable, consistent, high-speed experience.

    Free is great, and free doesn't have to be inconsistent or mom and pop. For instance, look at Austin Wireless City or Marriott's budget hotel chain (free wired or Wi-Fi in all of their mid-level hotels by the end of 2005).

    But for business venues and business districts and a consistency in access, people will pay. If every McDonald's has branded Wi-Fi and it's just $20 per month, then certain travelers--perhaps millions--will take advantage of that.

    When roaming kicks in full scale, and all US hotspots are covered by a $20 per month fee from Comcast or Qwest or Boingo or other consumer firms reselling access, then for consumers who need it, there's no question. Businesses will pay $200 per month cell bills; a $20 per month surcharge for more productivity through unlimited US roaming won't be a big deal.

  • I have seen the Death of Pay-for WiFi. (Score:4, Insightful)

    by nikster ( 462799 ) on Monday June 07, 2004 @09:51AM (#9355873) Homepage
    I used to use SurfAndSip way back when it started in San Francisco. $20/Month for unlimited internet access is not bad, especially if you have a cell phone (save $10 on land line) and spend a lot of time in or around cafes anyway.

    But last week, i saw the death of this model. I went into the Canvas Cafe - free wireless access from 8 am - 6 pm, and the typical hipster atmosphere we all love and loathe. I sat down with my latte, and saw in front of me 30 (thirty!) laptops. Everybody in this place had a laptop. All of them with WiFi (new and shiny PCs and 50% macs). I think i saw maybe two people without computer. The whole cafe had turned into some kind of office. It was packed.

    Now, this cafe was popular to begin with, but this was a weekday, and this was sometime in the afternoon.

    The euquation is simple: Free WiFi = more customers!. Once that begins to sink in, imagine how many Cafes would _not_ be able to affort $50 per month for a serious DSL line. Exactly Zero. Any business can afford that. The cost is negligible.

    This isn't some theory or opinion. This is reality: It's happening right now, it already happened, it's working, and there is no stopping it or turning back the clock.

    I am sorry for SurfAndSip (which always had excellent service and good prices) and less sorry for others (e.g. t-mobile with their attempts to sell the internet as something close to Gold). But the reality is: The future is free wireless access. Paid-for hotspots will be gone in no time. The only way i can imagine these companies making money is by reselling DSL and installing the equipment.
    • In a coffee shop? Sure free can happen. But once you step outside those coffee shop walls, what happens? For example -- your favorite spot in the park. On that overlook above town. On the bench in the middle of the bridge. Down by the river. On the beach. How about anywhere where that little access point won't reach?

      There are other forces at work and in the near future, Internet access will only one facet of your connection.
  • Typically here in London I can go into an internet cafe for 1 pound per hour, or maybe 2 pounds maximum in expensive locations. For that the owner of the cafe gives me an internet connection, a place to sit, and the use of a PC for an hour.

    If I bring my own laptop, I simply want the internet connection and maybe a place to sit. Providing this is much cheaper than providing me with a PC as well, and the cost to me should be cheaper.

    If I go into Starbucks and order a coffee, then the place to sit is include
    • Interesting - but I'm faced with a choice where I am - either I pop into a very nice locally run stylish cafe, which provides free Wi-Fi and honestly much better food than Starbucks, and it's still cheaper, or I cross over the road to Starbucks, charging me 6 an hour. And that's why paying for Wi-Fi ain't going to work - there's always going to be a cafe offering it for free. The reason internet cafes are sustainable is because a cafe could afford to offer say one terminal for free net access (I know sever

  • Hotels (Score:5, Interesting)

    by macemoneta ( 154740 ) on Monday June 07, 2004 @10:03AM (#9355955) Homepage
    Several hotel chains in the US are now advertising free WiFi connectivity when you stay at the hotel. This is where I see free hotspots as a business model -- a value add on an existing market. Given a choice between two hotels (all things being equal), which would you select, the one with the WiFi or the one without? Similar to advertising free cable TV, a pool, or even air conditioning, free WiFi can be used to attract customers at low cost for the establishment. Now that some are offering the incentive, I expect free WiFi to be an across-the-board service provided by any decent hotel.

    Other environments, where you may only be using the service for an hour or less (cafe, airport, etc.) will have a hard time justifying a cost that makes the credit card processing worthwhile. A subscription model may work in this environment, but that just means another company is taking a chunk of any profit.

    I have to think that WiFi (or some form of Internet access) will be considered a low cost utility or courtesy at some point -- like a water fountain, electrical outlet or even a public restroom. Most people take those for granted now, and I expect that the same will be true of WiFi in only a few years.

    Paying for WiFi access now is paying for the deployment of the hotspots. Once they are reasonably ubiquitous, they will be "free" (included in the cost of doing business).

  • Count it as an infrastructure cost. (Score:3, Interesting)

    by Moderation abuser ( 184013 ) on Monday June 07, 2004 @10:06AM (#9355979)
    Do your customers pay by the minute for the lights in your store? The air conditioning?

    There are a dozen different payment methods, data rates, flat rate payment, by the megabyte payment, by the minute payment, encryption keys, it's almost not worth the hassle. If an ISP were to come along and standardise the lot it might be worth it.

    At the moment without the standardisation, the only way wireless is going to work is as an infrastructure cost, perhaps with limited bandwidth and access, encourage people to come in and smell the coffee so to speak.

  • WiFi is a marketing tool for other products/servic (Score:3, Interesting)

    by ducomputergeek ( 595742 ) on Monday June 07, 2004 @10:19AM (#9356073)
    Wifi is a draw for someone offering and making money off another product or service. I say this typing at my favorite local coffee house that has free WiFi. In fact most of the coffee houses here have it now.

    However, this is the first one to offer it and turned me into a loyal and repeat customer. In fact this morning I will answer emails and do some work and probably stay for lunch and order a sandwich and they make another $5 off me.

    As a stand alone pay service, its doomed to failed, however as an incentive to get people into your place of business, especially one serving food and drinks, it can be a cheap and effective marketing tool.

  • another business model (Score:2, Interesting)

    by gordona ( 121157 )
    A small group of mountain residents, west of Boulder Colorado formed the Magnolia Road Internet Coop (http://www.mric.coop) nearly 3 years ago with our 1st paying members going online about 2 years ago. As a rural community, there is no access to cable modem service nor DSL. ISDN is very expensive for limited bandwidth. Satellite options have proven unsatisfactory and expensive.

    Currently we have nearly 200 subscbribers and cover about 250 square miles of mountainous terrain. The cooperative is run by v

  • Free wifi? Its not free (Score:3, Interesting)

    by thogard ( 43403 ) on Monday June 07, 2004 @10:52AM (#9356317) Homepage
    Melbourne wireless [wireless.org.au] is a group of people building their own network. Its not connected to the net mostly because the local telco charges per megabyte and all the other tier two providers (who claim their tier 1) bill the same way so the net is too expensive to give away connections....

    Except.... the local telcos have annoyed me a great deal. I'm tired of seeing bills in the thousands of dollars a month for work's pathetic connection which does a less than a hundred gig a month. So I called up every local provder through their offices in the US and got price quotes there for service here. I've now got a spare bandwidth on an unlimited pricing plan. So lets see here, I'm mad the local telco, I've got roof space on the 129th tallest building in the world as well as a few other choice spots, I've got a few nice 120 degree max-rad antennas, I've got spare bandwidth that won't cost me anything if I give it away and a service contract that lets me resell or share it. I wonder what I should do.

  • Coffe Shop (Score:3, Interesting)

    by The Ape With No Name ( 213531 ) on Monday June 07, 2004 @10:54AM (#9356327) Homepage
    My friend has a little coffee shop near our campus. I installed a wifi hotspot for him with a Comcast business connection and an access point. His cost for the first year was about 1200USD. His business tripled. So, anecdotally, giving wifi away as a loss-leader works.

    --toby
  • Pay-per-AP WiFi access would pay, if reconnecting to different access points were invisible. That means paying once for several different logins to different APs, likely owned/controlled by different entities. Which means a single signon, interoperable between APs.

    A company that aggregates lots of APs for complete coverage, charges and services the customer directly, and pays the AP controllers at the back end would make money. Support costs could be centralized to reduce the overhead redundancy. Some reve
  • If some nitwit company cannot find a way to enhance the service and make a buck, who cares, let them go under. If the big MONOPOLY phone and network companies can't figure a way to make a profit again WHO CARES beside the FCC and the new right to corporate profit people ? I'd love to see the big huge telco's go belly up, they've been jacking the US public for YEARS for services we've already payed for, denying the US simple interoperability services with LIES, SCAMS and plain thievery. Either they adapt or
    • jacking up prices for years?

      Shit, I pay $17 a month for basic local landline service.

      OHH, WAIT, you're talking about value added services! Well, I don't need caller ID, and call waiting? It's called a busy signal. I guess it just sucks to be you.
    • The problem is the government gets a nice chunk of money from all those taxes tacked on to your phone bill. Don't think that state/local/federal entities will just give up all that money without making up the loss somewhere else.
  • I can't belive that people don;t see NetZero's business mode being applied. Free internet with ads, or pay and you don't get ads, it's that simple. Since most WiFis are NATs, you can inject a add into a connection here and there, either by connection hijacking or by proxy.

    Another solution is a sign-on page that moves you from a goes-no where vlan to an internet accessible vlan, and back again after a certain time. The sign-on page has he ad. So they know you will see it, and they can even put the login i

  • Where is the actual "free" part? The connection to the internet is NOT FREE. SOMEONE is paying for it and sucking up the cost while allowing others to use the connection that IS being paid for without cost to them...all for the intent (usually) of bringing customers in who will spend money on whatever the supplier of the wifi access sells. The ISP for the "free" wifi hotspot is making money - so it isn't free is it?

    If a municipality is supplying the "free wifi", then it is most assuredly being paid for

  • The real business model for wi-fi is as a value-added service. It's a way to get customers to the store.

    Some stores can also integrate the service with their business. For example, Barnes and Noble can let you search their catalogs via wi-fi and have an digital map of the store so you can find the exact spot of the book you are looking for in the store you are sitting in. You can read reviews for the book right there as well, and possibly have Barnes and Noble chat rooms with other wi-fi customers in other
  • Many truck stops offer WiFi, as covered [cnn.com] last month. There was a /. story [slashdot.org] on them last year. I even saw a billboard advertising WiFi at a Flying J [flyingj.com] truck stop over the weekend.
  • I feel I should put in my 2 cents as I have been working on a wifi project for about a year now.

    Why pay $6 an hour for internet service when most people would rather catch a movie for the same price and get an hour an forty minutes of entertainment.

    So the model has changed, instead of charging the coffee drinkers of america- charge the cafes of america.

    This model happened naturally because companies compete with each other and try to add more value to their products and services. For example, restaurant

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