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WiFi Free-For-All
my_LART writes "Information Week reports that WiFi access is becoming a free commodity. Pittsburgh International Airport (PIT) has recently dropped its pay-per-use model and has installed free access to the WLAN in the food court and will be expanding access to the gates. On a similar note, Choice Hotels International is planning a WLAN rollout at its 370 Comfort Suites and 140 Clarion properties by the end of May. Choice Hotels International plans on expanding the rollout to two more of the company's brands by the end of the year. While this is great for us Road Warriors, how can this make financial sense? Choice Hotels can certainly markup the cost of the rooms by a few dollars per night, but how is PIT planning on reclaiming the costs? Regardless, lets hope other airports and hotel chains follow suit."
Easy, three little words, Airport Improvement Fee... Part of the way your $50 flight ends up costing $100+
drunk chemists
Normally, people that would do hacking, credit card fraud or just plain spamming would be traceable, not anymore so when half the internet is made out of freely accessible hotspots? Or would they block all interesting ports except port 80 and 443 to allow casual webbrowsing?
My local trendy cafe/art gallery, The Canvas (Lincoln and 9th in San Francisco, right on the corner) now has free wireless during business hours. You can walk in, and its full of people - most with a laptop, but they also have one important thing: the food they bought at the cafe. So, the Canvas can get 1.5 mbit DSL for $40 a month, and get at least 40 more people a day buying more food, probably at least amounting to the total cost of the DSL per month, every day.
While this is great for us Road Warriors, how can this make financial sense?
Simple, Airports get more business (& more fees), Food courts get more people grabbing a danish & a little wi-fi access (most of these road warriors just want to check e-mail anyway, not exactly high bandwidth stuff). Hotels get more business & higher paying business. The business traveler is not paying the bills himself & will tend to select the places with better amenities. Full hotel with free Wi-Fi vs. Empty hotel with no or $20/night Wi-Fi.
Imagine that... An ISP employee looking for internet access at work...
Karma: Bad (mostly due to all those "In Soviet Russia" jokes)
Sniff credit card numbers on the wireless network and charge them "convenience fees" which most flyers probably won't complain about :) Lazy americans (myself included)
Think of it as a value-added service - Choice hotels wouldn't even have to mark-up the price of the rooms to cover the marginal cost of WiFi. If I, as a road-warrior, have a choice between a hotel with WiFi and a hotel without, I'm going to choose WiFi. Some people will choose it even for a price premium, but then you start getting into economic slopes & such that I haven't messed with in ages.
Similar for the airport - granted, the market there isn't as fluid, but if the airport starts gaining more interest because it offers free WiFi, it can gain more shops and fast food outlets (= rental revenue), and possible in the long run (and by a long shot) attract marginally more airline business.
Like most people, I think WiFi will become a commodity. It is a relatively inexpensive service to provide that provides a competitive advantage in the short term; as more companies adopt it, it lessens the competitive advantage because everyone has it, and hence, becomes a commodity. Consumers everywhere win!
What costs? You mean the $60/month for a DSL the DSL line that's shared by via 802.11 here? That's petty cash, not a cost.
It's so cheap it doesn't make sense to charge for it. The administrative overhead of charging will eat most of the income because not many people will pay. But a lot of people would use it and be appreciative if it's free generating far more valuable goodwill.
Good god. I "work from home", so I often go to the local cafe with free WiFi for a change of pace. All my work stuff is done through encrypted VPN, and I use a software firewall and SSL for everything else. So I'm running EffeTech's HTTP Sniffer to debug my app server, and by default it dumps ALL HTTP traffic on the LAN. So I saw all full HTTP request and responses from all the laptops in the cafe. Mostly dull web surfing, but a lot of people check email using plaintext connections, which blew my mind.
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(MadHungarian): "I vote for idaho, i hear they have free WiFi access in the airport"
Yeah, way to win one with the ladies dude...
Actually, it will make a difference in terms of passengers who have a choice. US Airways rents more than half of the gates at PIT... so for flights that involve a non-major city, it's a safe bet that if you pick US Airways you're going to go through PIT, and if you pick Delta you'll hub at ATL.
For two otherwise equal situaitons, this could be the tiebreaker. In fact, somebody might be more inclined to pick US Airways because of this, and that might be worth the money to pay a few bucks extra for the ticket.
they are going to pay for it by not providing soap and not cleaning the toilets twice a month? :)
I grew up in Pittsburgh and the airport was designed as an "Airmall" where people waiting for flights or waiting to pick people up would shop and eat. Unlike many airports, the prices are no more than they would be on Main Street. However, all of the shops are on the secure side of the security controls, and so when after 9/11 they changed the rules so that only ticketed passengers could go through security, the shops and restaurants lost half of their customers. Part of the motivation must be, I guess, to help out the restaurants by hoping that passengers will linger for a coffee or a Big Mac while they check their mail before they go to their gates.
Coffe shops, book stores, airports, hotels, what's next!? You know where I want to see WiFi access? How about the doctors office, or the DMV? Where I unwilling have to spend hours of my life waiting for someone or something! Or what about WiFi at the grocery store so I can post my shopping list to my blog and then read it off to myself from the comfort of the grocery store asiles.
**Ends Rant**
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It makes sense because the incremental cost of providing the service is probably lower than the cost of the soap (lots in my flight bag) and the capital is less than the cleaning budget for the toilets for a day or two.
It also makes sense because providing the internet feed is dirt cheap, while trying to meter it and collect fees is NOT.
It's called a "marginal service" - like the shaver outlet in the bathroom (without a meter and coin slot), providing lighting (rather than requiring you to bring your own flashlight), or the free elevators (without a ticket taker). It's MUCH easer and cheaper to include the cost of the service in the overhead cost of the environment (and the goods and services you buy there) than to try to bill for it specifically.
Closer to the shaver outlet than the elevator, by the way. Unmetered internet service is dirt cheap to provide. Installing and maintaining elevators is DARNED expensive.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
I got fired, formed my own consulting company and now our business is taking off and my old company is in Chapter 11.
But that's beyond the point. One of my favorite places o go is a locally owned coffee house. About 4 years ago they bought a couple used laptops and rented then out for $7 an hour. About 18 months ago, they started giving free WiFI, guess what, they've made a lot more money, because people like me use it to work away from work. I deal with customers from 10 AM - 5PM, then about 5:30 goto the coffee shop, grab a bite to eat, a bottomless cup and do my work until about 8PM, then go home. Guess what though, I am so regular as soon as I walk in, they tell the exact bill and everything's ready togo. We often meet clients there as well because of the asmostphere. $100 in gear and $80 a month for a commerical Cable connection is pretty cheap to bring in repeat customers. Hell, they proably almost recover the bill from me alone. When they switched to free mode, two new coffee houses were opening in the area. Guess what, they are still in business, one is out of business, and the third is still there, but doesn't do near the business as the local favorite.
Hotels are another story. I was at a meeting/seminar at a hotel and I was the first to test their WiFI connection. Its extremely handy and we quickly booked our next daylong seminar because of the easy access. Now others offer the same, but its a convience, and if they can improve bookings by 5 - 10%, it will more than pay for the service.
My last story is that of our favorite all night diner. Its not uncommon for us to work until 1 or 2 AM. Usually take an hour off for news and Leno's monologue then go out for coffee and a late night snack. Well, we noticed that they too put in free WiFI access. We sometimes have working lunches there as well, although its not widely used as say the coffee house.
"The problem with socialism is eventually you run out of other people's money" - Thatcher.