Getting Down to Wi-Fi Business
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CHICAGO -- Unlike the theme of the '90s movie, "Field of Dreams," getting hotspot technology out in the public is much more than a "build it and they will come" proposition.
More accurately, they may come, but will they return?
The hotel hosting the second annual Wireless Internet Service Provider Convention (WISPCON) here this week found it's Wi-Fi service the brunt of an object lesson in what not to do when building and offering a wireless service for visiting customers.
The Oak Brook Hills Resort is a 14-story luxury hotel catering to business people and avid golfers (with an 18-hole golf course on the premises), but has only 10 access points providing wireless Internet connections to the hotel guests.
Oak Brook's quality of service -- or lack thereof, in some cases -- was quickly pointed out by the hundreds of wireless technicians attending the convention.
"If you can't afford to do it right, it might be best if you cover something else," said Allen Marsalis, president of Shreve.net, speaking Tuesday to a crowd of WISP attendees considering a move into providing 802.11b service in their communities.
WISPs around the country are taking a second look at hotspots as a business model, something most were hesitant to do a couple years ago when coffee shops, airports and college campuses started sprouting wireless Internet havens of their own.
It would seem a safe assumption fixed wireless ISPs would flock to hotspots as another revenue market to target, given both technologies deal primarily in the license-exempt 2.4 GHz spectrum. But from the beginning, most WISPs found hotspots "faddish" and difficult to justify from an investment point of view.
Setting up a hotspot is much more than putting up an access point and letting customers onto the network. It involves finding a backhaul from the location (usually a T-1 line leased from the local telephone company) and finding a pricing model that puts money in the provider's pocketbook.
It also means sharing profits with other providers. By their very nature, hotspot users don't want to be tied down in one area for their access -- they want mobility. Towards that end, providers will need to set up roaming deals with other providers who will get a cut in the customer's fees.
"You have to partner with other providers," said Dr. Butch Anton, chief technology officer at GemTek Systems. Your customers are mobile, they aren't going to want to go to one area all the time and you can't possibly put [an access point] up everywhere."
Finding a place to set up a hotspot in the first place can be difficult. Kelley McNeill, a vice president of marketing at Wilmington, NC, -based Communication Specialists, said she commonly runs into problems finding a business owner who actually wants people who are going to park their laptop.
"One of the concerns is that owners don't want people loitering in their building all day," she said, and surfing on the Internet (i.e., not not buying anything).
Another problem is security. Most wireless Internet users have heard of war chalking and war driving at one time or another. ISPs, by nature, don't want to build a public access point just to have every yahoo with a Pringles can stealing, Anton said.
"Hotspots are a transient service," he said. "There's a nameless, faceless person who comes onto your network."
For Marsalis, who until this year didn't consider Wi-Fi as a business service and reluctantly decided to deploy some hotspots because of the service's popularity in Shreveport, LA, its been a learning process.
"[Hotspots] are a compromise," Marsalis said. "We, as ISPs, like to lock down our systems but that doesn't really work with WLANs [wireless local area networks]. Some of the standards coming out, like 802.1x, are working to make [our networks] safer. I'm confident that as hotspots gain in popularity, it'll get better."