What's Happening, Hotspot?
By Justin Hall, Mon May 31 09:00:00 GMT 2004

The difficulties of paying for decent Wi-Fi access may wind down as access prices drop and Wi-Fi roaming looms.

I was a guest at an executive retreat in the Swiss Alps - top-flight hotel, excellent service, full broadband wireless you had to access through prepaid cards available for only an hour at a time. You had to buy stacks of cards for the hours you might use Wi-Fi in your room, scratch off the back and feed the numbers in the system. And then it didn't always accept the numbers. What a pain!

For anyone accustomed to working Wi-Fi, these halting obstructed moments of internet access are agony. You know the signal is out there, but you can't tap it. Sniffing for Wi-Fi networks is fun, seeing what's out there. But finding a network and not being able to get on? That's horrific.

By comparison, free Wi-Fi is sweet charity. You find a signal, you hop online, your web browser opens and there you are online. In his article "Community Wi-Fi Stays Ahead of Commercial Efforts," Carlo Longino put it succintly: "You can do more for free, or pay to do less."

There are loads of companies working to see that no one ever has a problem paying to get on Wi-Fi again. Like wireless roaming; you can move from hotspot to hotspot, certified, authenticated, turned on, plugged in and sped up by some kind of validating authority from your home node.

The business is so nascent - you can see it's far from being ready for mass market. Systems often refuse paying customers access, or log people out in the middle of their prepaid session. Certain hardware is inexplicably incompatible.

Worst of all? The pricing schemes. German mobile provider T-Mobile is the largest Wi-Fi hotspot provider in North America, due in large part to their partnership with Starbucks. For an hour of Wi-Fi at a Starbucks, you'll pay $6. For a month of access, you'll pay between $20 and $40. How much do they think convenience is worth?

Home high-speed net prices are pretty low these days - $40, $50 per month in the US. That works out to around 1 or 2 cents an hour if you spend a few hours online a day. The rates charged at Starbucks, for a less reliable connection shared between many folks, is closer to ten times that much.

There are some businesses spreading cheaper hotspot access. Digital culture chronicler Julian Dibbell updated his Play Money weblog driving across Middle America: "I write to you from exit 292 of interstate highway 80, in Davenport, Iowa, USA. I'm in a back corner booth of the local Flying J truckstop, which along with diesel fuel, hot showers, laundromat, Louis L'amour audio books, and other necessities of the modern truck-driving life, now offers broadband Internet connections for the reasonable rate of $4.95 per day."

The people that might consistently afford to pay at the top of the Starbucks scale are hard-traveling businessfolk. I interviewed one executive for a pharmaceutical company; he flies regularly between the US, Canada and China. He subscribes to two regular Wi-Fi accounts, and pays for any other account he finds along the way. He just needs to get online, and money is not a problem.

But that's not the case for the broader citizenry. More laptops are sold than desktop computers now. And increasing numbers of laptops come with built-in Wi-Fi, and besides, PCMCIA Wi-Fi cards are cheap. Lots of people love to get online, but not enough to pay pennies per second. If the hotspot business is going to grow, it needs to attract more casual users. These people would rather go the extra mile for free Wi-Fi. And bully for them - Wi-Fi would be best if it were free, part of the overall service and atmosphere of places. People pay $4 for a cup of coffee, and they still are willing to pay more on top of that for a wireless signal?

Wireless roaming agreements might allow the industry to create a user experience that will be attractive for this broader range of consumers. How can you pay for any one WiFi subscription when you might pass through four hotspots in a day? The best scenario would have us pass from hotspot to hotspot seamlessly, using protected, secure software, with a regulated amount of shared bandwidth, maybe contributing a very few cents per minute to the costs of the network.

Current Wi-Fi industry efforts bode well for wandering Wi-Fi seekers. Wayport's deal to provide Wi-Fi hotspots for McDonald's took a turn for the innovative recently, when they announced a open system with roaming fees that should let any major Wi-Fi carrier offer broadband signal at the restaurant's hotspots. Carlo Longino covered that story this week.

Intel sponsored UK startup Roampoint is hoping to extend a similar sort of Wi-Fi network sharing across all hotspots. Last month, they launched a global Wi-Fi hotspot account brokering service. Already, cross-hotspot coverage is provided by companies bundling Wi-Fi access to provide businesses with secure wireless connections across multiple wireless providers.

Think of these as middlemen on the middlemen. A paid wireless Internet connection in public today could involve an ISP, a hotspot location, the hotspot provider, the hotspot broker, the hotspot client software, the hotspot security. And now, the race is on between all those entities to join up and make paid Wi-Fi as accessible and easy to use as free Wi-Fi.