Cringely on "How WhyFi can turn hotspots into a real industry"

01-09-04, 03:14 PM

Cringely brings up some great points about why the current system is not working really well and what can be done to make WiFi access much better. As a T-Mobile and AT&T WiFi user, I can tell you I can't stand the fact that there just isn't enough WiFi access around the country.

http://www.pbs.org/cringely/pulpit/pulpit20040108.html

"Frankly, though, I think the current efforts are misguided and pathetic. I don't want 20,000 hotspots in my network, I want at least one million. The current aggregators would like that kind of number, too, but they can't think how to achieve it. I think I have figured it out and am happy to share my idea. If any reader runs with it and makes a fortune, don't forget me, okay?

The current model for hotspot aggregation is based on revenue sharing. I own one or a hundred hotspots and join the Boingo network, for example. Boingo provides software and backend services to allow its subscribers to log-on to my hotspot, sharing with me some of that revenue based on usage with Boingo keeping a commission on every transaction.

Thinking in commercial terms revenue sharing seems to be the only way to go but I feel it isn't. I think the revenue sharing model of these outfits is precisely what's holding back WiFi from being an even greater success. The problem is that the revenue potential of such a business is minimal. There just isn't enough reward for anyone and I can't see that this fact is going to change for any reason.

So we need to come up with a better alternative to revenue sharing as a raison d'etre for our aggregation business. But that's not all we have to change. The current national WiFi networks are so small in part because of the arduous means through which they come into existence. By this I mean that hotspots first have to exist in order to be aggregated, which is a steep barrier to entry. I think the hotspots should be first aggregated and THEN exist. That way, rather than hoping for some small percentage of hotspot owners to join a network hotspots can be generated where they are needed, not just where they happen to exist."

deftech · 01-09-04, 03:48 PM

I completely agree, although I don't see anything changing with hotspots in the near future. Here in Tuscaloosa, I am set up pretty well on-campus. Just about every room I have had a class in over the past 1 - 2 years has had WiFi access. Also, most of the libraries have gone wireless now as well. Luckily, all this is a free service for students. To find out the SSID, you can usually just look it up online. With other buildings, you can present your Student ID card at the office, and they will tell you the SSID.

Away from campus however, there is next to nothing around here. Every now and then, you'll find a restaurant or coffee shop that has access. But I'm not going to make my lunch based on them having this.

Here's my idea for "getting away" from the revenue sharing services like T-Mobile and Boingo. It would be a server-hosted program (on the local server) that allows you to securely enter a credit card number upon connecting to the access point. You could have a Pay-Per-Minute option, as well as say a Pay-Per-30Min and Pay-Per-Hour option. The latter two options could be slightly discounted prices. The server-side software would be an initial up-front cost, but would allow the owner of the hotspot to keep all revenue for himself, instead of allowing Boingo (or others) to get a lot of the revenue.

Then again, maybe too many people would be scared of entering a card number over a wireless connection? I think if the security concerns could be worked out of it, that hotspots would be much more beneficial to many owners.

Also though, as newer and newer generations of Cellular technology continue to come out, hotspots will eventually vanish anyhow. If a person can simply whip out their laptop or PDA with a cheap cellular card (they will get cheaper as they become more widely used), then what's the use of Wi-Fi around town? My 3G cellular data connection is much faster than dial-up, and I'm happy with that for e-mail, news, etc. while away from my computer. In the future, cellular data bandwidth will get much faster, and Wi-Fi will likely be a thing of the past anyhow (for "hotspot" type usage). Although, Wi-Fi will likely continue to be popular for LAN usage without having to deal with running wires all over the place.

01-09-04, 04:13 PM

I look at it this way Jordan. I should be able to get WiFi access in every airport, every hotel and every coffee shop without having to subscribe to hundreds of services. Why is that so hard?

01-09-04, 04:14 PM

Quote:

Also though, as newer and newer generations of Cellular technology continue to come out, hotspots will eventually vanish anyhow. If a person can simply whip out their laptop or PDA with a cheap cellular card (they will get cheaper as they become more widely used), then what's the use of Wi-Fi around town? My 3G cellular data connection is much faster than dial-up, and I'm happy with that for e-mail, news, etc. while away from my computer. In the future, cellular data bandwidth will get much faster, and Wi-Fi will likely be a thing of the past anyhow (for "hotspot" type usage). Although, Wi-Fi will likely continue to be popular for LAN usage without having to deal with running wires all over the place.

Jordan, very interesting. This article was just released today on PC World regarding Verizon and their plans to offer Broadband Access over their cellular data network. It looks like AT&T are looking in this direction and it is only a matter of time that others will follow. That being said, you got to wonder what is in store for hotspots.

Verizon Expands their 3G Network

01-09-04, 04:23 PM

Added link to article in the first post. Read what he says about his idea....

Quote:

Here's how the process works. I call it WhyFi. First we need to encourage what are essentially noncommercial hotspots and we do that not by revenue sharing but by providing free equipment. Anyone who wants to start a hotspot gets a free WiFi access point and a free WiFi client card for a notebook or other computer. Since all the hardware is identical this makes building and maintaining a network much easier. If you want to be part of the WhyFi network, you have to accept WhyFi equipment.

The only thing that makes WhyFi hardware any different from what you could buy at CompUSA is slightly different firmware. This firmware establishes for the hotspot owner a DMZ in which the public traffic is contained as well as a RADIUS function required for network authorization. Public traffic can consume up to 100 percent of available bandwidth but availability is defined by what isn't being used by the hotspot owner. The result is you can run a hotspot without having to endure any sort of performance hit.

The WhyFi card also contains different firmware that establishes similar DMZ and RADIUS functions though in this case they operate in an ad hoc network around your notebook or dektop.

Your incentive to operate a WhyFi hotspot is free service for you when you leave home. The hardware and software are free. There is no performance hit. And your WhyFi card gives you free unlimited access to the entire network through MAC address filtering. So while you don't make any money from the WhyFi network it also doesn't cost you anything to belong.

So you'd give open access in return for it. This could be huge IMO.

deftech · 01-09-04, 04:24 PM

The only other option, as most hotspot owners don't want a completely free connection to their AP, is something similar to a project that our MIS program was working on with SMS messaging a few years back. That is just simply to run a couple of ads when using the service. I don't have an exact idea of implemention with Wi-Fi, but it would basically just be that upon connecting to the hotspot, a webpage would be loaded that contain a few ads for the business that it is located in. For example, say you're in a coffee shop and you want to connect to their AP. You whip out your X3i and it finds their AP. The first try to browse to a webpage, you are forwarded to a promotional coupon for a "Free small cup of coffee with a $3.00 or higher purchase." After this initial load, you can browse freely without any interruptions.

This would be a good promotional tool for the company, while still providing users with a basically free WiFi service.

Of course, I would prefer a completely free service. But this could be a good alternative. The problem lies in how to implement such an ad-based service. I'm sure it could be done though.

deftech · 01-09-04, 04:28 PM

Quote:

Originally posted by cageyjames
Added link to article in the first post. Read what he says about his idea....

So you'd give open access in return for it. This could be huge IMO.

That is a very well thought out, and very interesting idea. If a company ever decided to kick this off, I think it would be a hit.

tgreenstein · 01-09-04, 04:51 PM

Quote:

Originally posted by cageyjames
I should be able to get WiFi access in every airport, every hotel and every coffee shop without having to subscribe to hundreds of services. Why is that so hard?

I don't think that we should be very surprised that WiFi isn't easier to find, access, or deal with. Compare it to cellphone usage. The first cellular systems came on line in the early 1980s. It's been over twenty years, and there are STILL plenty of places where you can't get cellular access -- and that doesn't even consider the fact that there are a number of competing systems (Verizon, Sprint, Cingular, Nextel, etc.) whose equipment is often (usually?) incompatible.

01-09-04, 05:04 PM

Well its that and the fact it is very fragmented. Too many different business models, too many sales. Its like dialup was a couple years ago. Thousands of "Mom and Pop" ISPs, but now they are all just about gone. What we need is an "AOL" type to sweep in and make them all compatible and all open to one login.

01-09-04, 05:06 PM

Well, there is one big obstacle to 3G networks... Many communities (especially in the SF Bay Area) refuse to allow new cell towers to be installed. This is one of the reasons why Cingular's service out here is so pathetic (and since T-Mobile uses Cingular's network on the West Coast, their service is pathethic as well).

My wife uses a Sprint card for work. We live in the heart of Silicon Valley and Sprint's coverage is pretty lame out here.

So I don't see widespread 3G data networks being a viable solution in places where coverage is lacking.

Handy · 01-09-04, 05:49 PM

I must have missed something when I read Cringely's article. How is anybody making revenue in his model? I see that someone is giving away free hardware and that users are getting free service, but who pays what to whom to make this happen?

01-09-04, 06:08 PM

You have to buy the WhyFi equipment. That is where the money is made. You can't use your existing CF/PC Card/AP or other 802.11x equipment.

ppcvidz.com · 01-09-04, 11:31 PM

Quote:

Originally posted by cageyjames
Well its that and the fact it is very fragmented. Too many different business models, too many sales. Its like dialup was a couple years ago. Thousands of "Mom and Pop" ISPs, but now they are all just about gone. What we need is an "AOL" type to sweep in and make them all compatible and all open to one login.

Incidentally there is a company that is doing something similar to this. After moving to College Station I found part-time employment as a tech support technician for a company called NetNearU. This company basically handles the authentication of thousands of users for its licensees. Once you go to a location that has a hot spot you can either do Pay-Per-Minute or subscribe. This subscription gives you access to any licensee's hotspot world wide. I quit working there in November when I finally found full time employment, but when I quit they had signed exclusive contracts with some of the following: Cometa & Cox Communications (they are the ones putting hotspots in McDonalds and Barnes & Noble stores), AOL Time Warner, Canova Wireless (Big in the UK from my understanding), AT&T, Sprint, Verizon, and I see from their website that they just signed an agreement with IPass. They are also tied in with Boingo I believe. Their website is NetNearU if you would like to learn more about them or find hotspots that they handle the authentication for.

01-09-04, 11:49 PM

That's close, but I do like the theory that I could just by some hardware and be completely connected without having to deal with anything. Broadband is cheap and there is so much unused bandwith in this country that we should be able to make this work.

Anyone know a billionare?

JeffLewis · 01-10-04, 02:39 AM

I'd like to offer a somewhat different perspective if I may. This entire analysis has started from a basic assumption - that WiFi is a good way to provide wide area, general public network access. I argue that it isn't.

It has a number of critical problems that argue against it's use. First, the range is too small. To effectively cover any serious area, you need a large number of transceivers. It's not really cost effective. Cell phones work because there is an infrastructure in place to cover large areas. Infrastructures of this scale are almost impossible to build on an adhoc basis. The cost of maintenance alone increases too quickly.

The other problem with this specific aspect is that unlike cell phones, which have a large general use base, and a number of secondary benefits - all of which are relatively easy to use, such as SMS, 1X/GPRS, WebSurfing and so on - the primary use of a WiFi network is access the web, which is much less usable, and far less consistent.

As a result, WiFi use is sporadic at best and the device of choice will have variable levels of compatibility with the network. Worse, there's no general purpose WiFi device - that is to say, a device which is dedicated to using the WiFi network - you essentially always start with a small general purpose computer which from time to time connects to the WiFi network. That means that most of the WiFi network will be low use and difficult to make pay for itself.

There are only two group with the skills and resources to build an infrastructure this large: cablecos and telcos. The telcos just don't have a compelling reason to build it. They already have cellphones and they'd rather you connect to the web via 1G or GPRS. Cablecos really don't deal with 'broadcast' data, and when they do, they become cellphone telcos - with the same reasons not to provide a parallel network.

The right solution is to find a way to get telcos to reduce their data costs and provide easier ways to connect a cellphone to a PDA or laptop - say by Bluetooth or even 802.11b between the handset and the PDA or by GPRS CF card.