The Future of Wireless

ISPs, Businesses and Even Cities Seek to Offer
Cheap or Free Connections -- Which Will Win?
April 30, 2007

Wall Street Journal

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 deal between Spain's Fon (pronounced "fonn") and Time Warner Cable (pronounced "Time Warner Cable").

Fon 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 NYCwireless, 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.