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NYT: Making Free Wireless Wi-Fi Internet Pay
securitas writes "The New York Times' Matt Richtel writes about the the challenges of finding a sustainable business model for 802.11 Wi-Fi wireless Internet. The problem for entrepreneurs, telecom companies and others is that the proliferation of free wireless access hotspots at the municipal and grassroots level has obviated commercial carriers' revenue and profit models in many cases. One user quoted in the story sums up the attitude of many wireless users: 'The Internet is free here.... Why would I pay?' IHT, published by the New York Times in Paris, is carrying an abbreviated version of the story."
A free internet wifi connection... but then you are buying coffee and a muffin, so you ARE paying. The cost is absorbed by the cafe. A big business might be able to run at a loss to gain customers, your local cafe sure as hell can't. And really, if you think about it, how much is a coffee and muffin? Is it cheaper than 1 paid hour for web access? Sure, you might have bought a cappacino anyway, but its the little extras you buy that make it worth the cafes while to offer *free* internet.
Do you need a website upgrade?
The problem in the future might be that there is limited capacity for the wifi spectrum on the one hand and that for short time usage (at least within Europe) UMTS beomces affordable...
This *IS* a business problem... I agree!
I travel by air frequently and would love to hop onto the hotspots that are available within terminals, however the rates are just too high! The time I spend while waiting to board is limited to 2 hours or less usually -- why would I want to pay $20 for a day-long "pass" at this location? Seriously, all I need to do is check my email and maybe hit slashdot. (And no, I don't want to do it on my phone)
If these guys got a clue, they would realize that everyone of us "out there" realizes that this is essentially a "free" service. Short of of the hardware infrastructure and the collection of my billing info -- how much cost is really being incurred by my login?
Don't most porn pages offer a limited subscription for less than $10? Can it be any more difficult than this for Wireless operators? After all, there's probably a lot less data transfer involved.
Then look at it from a security standpoint. Because it's your home and church you need to have the security because of liability. What if someone searches for kiddie porn, or shares music and the RIAA comes after you or a million other things.
If the US at least if its yours then you are liable. That's why those places that offer it free have an agreement first.
Evolution or ID?
Everything costs money...deal with it. The "Internet" was never free and never will be. Fiber optics, switch gear, etc...all cost money. I am a network enigeer by trade...I know first hand how much equipiment and staffing can cost. The saying "you get what you pay for" is very true in the networking world.
There are actually a few airports that do free wireless. Do a quick search and you'll find them. Since we both agree that this is a business problem, let's look at your particular business case. Is free Wifi a good enough incentive for you to switch airports?
Probably not. Which is why I don't think you'll see Free Wifi at every airport.
You hit the nail on the head when you said that Wifi, relative to many other costs of an airport, is nearly free. But profit-seeking businesses look to charge what the market demands, regardless of how much it costs to meet that demand.
We've seen prices below cost from Microsoft and prices wayyy above cost for...say...porn.
To compete you must add value, or offer a lower price.
Competing with free removes the price driver.
I don't see that many options to add value. But it isn't my job to dream up business models for others.
I used to use SurfAndSip way back when it started in San Francisco. $20/Month for unlimited internet access is not bad, especially if you have a cell phone (save $10 on land line) and spend a lot of time in or around cafes anyway.
But last week, i saw the death of this model. I went into the Canvas Cafe - free wireless access from 8 am - 6 pm, and the typical hipster atmosphere we all love and loathe. I sat down with my latte, and saw in front of me 30 (thirty!) laptops. Everybody in this place had a laptop. All of them with WiFi (new and shiny PCs and 50% macs). I think i saw maybe two people without computer. The whole cafe had turned into some kind of office. It was packed.
Now, this cafe was popular to begin with, but this was a weekday, and this was sometime in the afternoon.
The euquation is simple: Free WiFi = more customers!. Once that begins to sink in, imagine how many Cafes would _not_ be able to affort $50 per month for a serious DSL line. Exactly Zero. Any business can afford that. The cost is negligible.
This isn't some theory or opinion. This is reality: It's happening right now, it already happened, it's working, and there is no stopping it or turning back the clock.
I am sorry for SurfAndSip (which always had excellent service and good prices) and less sorry for others (e.g. t-mobile with their attempts to sell the internet as something close to Gold). But the reality is: The future is free wireless access. Paid-for hotspots will be gone in no time. The only way i can imagine these companies making money is by reselling DSL and installing the equipment.