Canucks Cooperative on Hotspots

Canada’s four major cellular carriers last month scored a North American first
when they agreed to work out details on a Wi-Fi hotspot roaming arrangement
that would let users of one company’s hotspots easily use others’ hotspots as
well.

It wasn’t quite a global first — a group of mobile carriers in France announced
a similar initiative a few weeks before. The Canadian effort is also some time
away from bearing real fruit — although the participants are vowing to have
a detailed agreement in place by the end of the year.

Whether they meet that deadline or not, the deal has interesting implications.
For one, it begs the question, why haven’t carriers in the U.S. done this? It’s
hard to see how the initiative can have anything but a positive impact on the
hotspot industry, certainly in Canada and possibly beyond.

"We think that if you get four carriers to agree to something that is
simple for users and relatively uniform, it will make it easier for enterprise
users to adopt Wi-Fi," says Peter Barnes, president and CEO of the Canadian
Wireless Telecom Association
(CWTA), the industry group that brought the
four carriers together.

"The potential hesitations about using Wi-Fi in public places often have
to do with security. If you have some name brand companies that get together
and say, ‘This is how we’re going to do it,’ I think that will help."

The four name-brand companies, which among them have over 12 million cellular
subscribers, are:

  • Bell Canada, the highly diversified incumbent telco
    in Ontario and Quebec

  • Telus Mobility, the cellular subsidiary
    of Telus Corp., incumbent telco in the western provinces of British Columbia
    and Alberta

  • Rogers AT&T Wireless,
    a joint venture between AT&T Wireless and Rogers Communications Inc., a
    major Canadian cable TV provider, and

  • Microcell Telecom, which operates the
    GSM-based Fido cellular
    service and also provides wireless network services to regional cellular carriers.

All — to varying degrees — have mobile networks with national footprints.
What’s interesting, though, is that only one is directly involved at this point
in the Wi-Fi hotspot market.

Bell Canada launched AccessZone as a pilot late last year. It’s a still limited
hotspot roll-out which the company has seemed in no hurry to accelerate. It
currently has 20 fixed sites in hotels, airports and municipal buildings —
not many more than when it started.

Earlier this summer, though, Bell did take an innovative step when it launched
AccessZone service on VIA Rail trains running between Toronto and Montreal.

Telus is a significant investor in Toronto-based Spotnik
Mobile
, which has over 60 sites, mostly in Toronto, all in Ontario, mainly
in coffee shops and hotels. The company’s Web site advertises another 70 or
so sites "coming soon."

Rogers and Microcell so far have no involvement in the hotspot market. Does
the fact that they are nevertheless party to this agreement mean they are now
committed to entering the fray?

"All recognize the importance of this market," is all Barnes will
say. "How they progress or enter the market will differ for each."
He implies the other two may pursue an alliance model similar to Telus’s.

Now that the initial agreement to work together has been forged with help
from Barnes and the CWTA, the parties have gone off together to work out the
details. The details include how users will log on at a hotspot in roaming mode,
how they will be authenticated, how billing will be handled, how network operators
will handle security — a set of standards, in other words.

However, Barnes suggests it could ultimately go further than just standards.
He talks about a chip level device or PC card that would automatically authenticate
roaming customers.

"This could be the Interac model for the Wi-Fi world," Barnes says,
referring to Interac Association, an alliance among Canadian
and international banks and other entities that makes it possible for customers
to use bank machines other than their own bank’s.

"From the customer’s perspective, they slide in a card for their laptop
and that effectively acts like a bank card only for Wi-Fi access. It contains
whatever PIN or password is needed to identify that the customer is associated
with carrier A, B or Z — and away they go."

"We think the whole secret is to make this as easy for customers as possible.
Think of it — if you had to have four bank cards, or one card and four passwords,
bank machines would be a lot less popular than they are."

Some commentators in Canada suggested that announcing the agreement was a "pre-emptive
strike" by the carriers to try and steal thunder from independent hotspot
players who have a clear head start in the market.

However, Barnes insists there is nothing in the current agreement that precludes
the group expanding in future to include both regional cellular carriers and
specialty hotspot service providers. He stops short of saying that it’s the
intention of the current members to expand the group, but he believes this is
what will happen.

"The way they look at it, this is an agreement to get together and work
out a way to walk before they run, and it’s just easier to do that with four
players than with 30 or 40," Barnes says. "There are no walls around
this."

The carriers may have a point about it being more difficult to get agreement
in larger less homogenous groups. Still, if these four companies work out standards
that other hotspot service providers in the future have no choice but to adopt,
that certainly puts the carriers in the driver’s seat in the Canadian hotspot
market.

It may seem astonishing that even these four companies can work together —
especially such direct, often bitter rivals. They have done it before, though,
working out another North American first: an agreement on text messaging that
lets customers of different carriers exchange text messages, something they
couldn’t do before.

"What’s being developed here is a culture of ‘coopitition,’" Barnes
says. "Yes, these people are competing every day, but they’re adopting
a different mind set. They’re saying, we’ll cooperate on these issues, but we’ll
continue to compete hard in the marketplace."

Barnes assumes the four Canadian carriers will look closely at what is happening
in France. Orange (France Telecom’s PCS
arm), SFR and Bouygues Telecom announced earlier in
the summer they were working on an agreement that will let customers of any
one of them use hotspots owned by the others. The three have said they will
later open the association to other hotspot operators.

"But I don’t think there is any cookie-cutter versions of what we’re trying
to do," Barnes says. "There’s a fair bit of start-up and original
design work involved. We haven’t seen anything out of the U.S. like this."

That may be the single biggest question posed by the Canadian initiative. Will
it inspire the big national carriers in the U.S. to do something along the same
lines? Or are their rivalries too intense to allow it?

Get the Free Newsletter!

Subscribe to our newsletter.

Subscribe to Daily Tech Insider for top news, trends & analysis

News Around the Web