http://online.wsj.com/article/SB117743976135380805.html
REAL TIME
By JASON FRY
The Future of Wireless
ISPs, Businesses and Even Cities Seek to Offer
Cheap or Free Connections -- Which Will Win?
April 30, 2007
Not so long ago, Wi-Fi was a home project for tech geeks with a high
tolerance for fiddling with router settings and WEP encryption.
Today, wireless Internet access is regarded as practically a digerati
birthright. Finding yourself in an airport or hotel without free
wireless access is as odd and unwelcome as finding out your rental
car doesn't have a CD player. (Wait a year or two, and you'll be able
to substitute "satellite radio" or "iPod jack" for "CD player.")
Wireless access is available in more and more places -- but there's
no rhyme or reason to how you get it.
Airports and hotels offer Wi-Fi for free. So do cafes, fast-food
places, bookstores and other businesses hoping to make some money off
people camping on the premises while they access the Net. Starbucks
and McDonald's are wireless front ends for T-Mobile and Wayport,
which offer a range of plans for hourly, daily or monthly wireless
access anywhere a network hot spot can be found -- a strategy also
followed by Boingo Wireless. And then some 300 cities and towns are
at various stages in offering cheap or free wireless access.
And, of course, there's just letting your wireless card hunt for a
signal leaking out of your neighbor's home -- this weekend my
wireless utility found five such networks. Three were unsecured; two
were obviously the default network name that came with the router. I
imagine that's fairly typical for a block of apartment buildings in
brownstone Brooklyn. Hopping on your neighbor's signal is variously
described as "leeching," "piggybacking," "borrowing a signal," or
"daily life," and opinions about it cover a range that you can guess
at from those terms. (My own network is open, but the SSID isn't
broadcast -- a combination that reflects early tech woes and the fact
that I've never made my mind up about what I ought to do.)
It all adds up to a patchwork of approaches, and one should be
cautious about making definitive predictions about how all this
tumult will shake out. But the general direction is clear.
Take last week's deal1 between Spain's Fon (pronounced "fonn") and
Time Warner Cable (pronounced "Time Warner Cable").
Fon2 sells wireless routers (called La Foneras) that let its members
(Foneros) split their Wi-Fi connection into an encrypted channel for
their own personal use and a public channel for the use of passers-
by, creating a network of public wireless hotspots. Fon divides
Foneros into three types: A Linus shares his or her access and in
return can log onto any Fon hotspot free of charge; an Alien doesn't
share access and can get 24 hours of access to the Fon network for $2
or $3; and a Bill shares his or her access and skips free log-on
rights in exchange for half the money Fon collects from Aliens using
that Bill's Wi-Fi connection. Fon's clever: It offers options for
regular, on-the-go Internet users and businesses looking to make a
little money from Wi-Fi, then throws some social-networking whimsy
into the mix. (With a dash of marketing -- note that Fon's definition
of "Alien" makes the entire world Foneros.) That said, the idea isn't
one that makes you automatically think the world's rearranging
itself. For one thing, U.S. ISPs' position on sharing an Internet
connection wirelessly has been clear: It's stealing. From those ISPs'
perspective, Fon must seem a hair too close to the dark side of
social networking -- an interesting business model predicated on your
customers stealing your product and handing it out to others.
Except Time Warner Cable has now given its 6.6 million home broadband
customers its blessing to become Foneros and thus share their bandwidth.
While a Time Warner spokeswoman declined to offer much in the way of
specifics about the deal, Fon USA CEO Joanna Rees says one benefit to
Time Warner is that "with Fon you can't leech … nobody talks about
what the leeching numbers are, but they're significant."
Dana Spiegel, executive director of NYCwireless3, is skeptical of the
deal's impact, seeing it as little more than a public-relations move
for both companies. Fon's network, he says, is "to be perfectly
blunt, tiny" and predominantly residential, making it not
particularly valuable in public places. Ms. Rees says Fon has 60,000
Foneros in the U.S., though she acknowledges that Fon may not have
the visibility of, say, T-Mobile with its Starbucks locations. While
she maintains Fon's footprint will be more effective over the long
term, "over the short term we have to be strategic." An example of
that strategy: a "Fonbucks" campaign in which Fon has given away free
La Foneras to people living near coffee shops.
Mr. Spiegel calls Time Warner Cable's deal with Fon "a parasitic
billing system … I'm paying the same amount of money for less service
and Time Warner Cable is getting more money from what I've already
paid for." His volunteer group's members create free hot spots in New
York City parks and public spaces and help bring free wireless Net
access to underserved communities. In his view, NYCwireless's
approach is better: "Instead of taking a reduction in my value and
handing it back to Time Warner, I'm taking that value and spreading
it out among my local community."
Then there are efforts by cities and towns to offer cheap or free Wi-
Fi. The most celebrated such efforts are taking shape in Philadelphia
and San Francisco, but many other cities and towns are pursuing that
goal, motivated by a desire to bridge the "digital divide" between
rich and poor and eagerness to bill themselves as tech-friendly.
One thing Mr. Spiegel and Ms. Rees seem to agree on: It's too
simplistic to see muni Wi-Fi as a threat to the aspirations of big
ISPs and other wireless providers. Rather, muni Wi-Fi is likely to be
complementary to such efforts. "What municipal offerings do is raise
the baseline," Mr. Spiegel says, contending that such services will
primarily convert those left behind today. "Today's baseline is dial-
up. When municipal networks roll out, you'll see a move from dial-up"
up to a new baseline.
Established ISPs aren't sitting still, either -- they know perfectly
well that the key problem with wireless today is you can't take your
access with you, leaving on-the-go surfers to place their bets on
which approach will yield the best coverage: an established network
such as T-Mobile's, the spread of free hot spots, efforts by cities
and towns, reciprocal networks such as Fon's, or the deployment of
new technologies, such as the much-hyped WiMax, that could supplant
Wi-Fi with much longer ranges and greater speeds.
Which will win? My guess is all of the above, and they'll be such
overlap between the various flavors of wireless access that we'll
largely stop thinking about it. Wireless will become something akin
to cellular service, taken largely for granted with a bit of behind-
the-scenes technological help. We'll spend most of our time hooked
into our home network or other networks our ISP's struck
interoperability deals with. Should such a network not be available,
our devices will seek out free signals, or tell us additional access
fees will apply.
What will we pay? That depends. Most of us, I bet, will pay about
what we pay today, but we'll get much higher download and upload
speeds. But those of us who either don't want or don't need such
bells and whistles will do just fine with free access provided by
cities -- or ad-supported access from businesses.
"When first introduced, [air-conditioning] was a luxury item," Mr.
Spiegel notes. "Stores that installed it saw a benefit. As it became
more available, more and more stores added it and it became more of a
cost of doing business."
So it will be with wireless. And as with air-conditioning, we'll be
startled to find ourselves going without now and again. We'll even
feel nostalgic about it.
What do you think the future holds for wireless access? Write to me
at [EMAIL PROTECTED] If you've got something to say but don't want
your comments considered for publication, please make that clear.
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