The Private-Label Hotspot

Wi-Fi hotspot operators continue to experiment with business models and opportunities,
looking for ways to actually make money at this game.

Spotnik Mobile, a Canadian service provider
with over 100 hotspots up and running, mostly in Toronto, recently launched
a first of its kind that looks promising: a private-label hotzone for a big
Toronto law firm, Fraser Milner Casgrain LLP
(FMC).

FMC has offices in five Canadian cities and New York. The Toronto branch, with
over 200 lawyers, covers four and a half floors of a major downtown bank tower
complex.

The firm wanted to provide clients and outside attorneys with a convenient
way to keep in touch while visiting its offices. The Spotnik hotzone, which
covers all areas in the office, lets them log in with a security code and go
out on the public Internet through a Spotnik server to access e-mail and surf
the Web.

"Our view is that excellence in client service is the core of every successful
relationship we have with clients," says Chris Pinnington, FMC’s managing
partner in Toronto. "This initiative is just an extension of that principal."

Both FMC and Spotnik claim the service met with good success in the weeks immediately
following its launch, though neither would reveal usage statistics.

"We’ve had a lot of positive response from their lawyers and from their
clients and other lawyers visiting their offices," says Spotnik co-CEO
Murray McCaig.

Adds Pinnington, "We’ve had a very enthusiastic response from our own
lawyers especially. They’ve really been champions of it."

The firm believes the hotspot service gives it a competitive edge — albeit
probably only temporary.

"Given the competition in the field I would guess this idea will appeal
to [other law firms] as well," Pinnington says. "We have the advantage
of being first, but I don’t know how long we’ll be the only firm with this service."

Not for long, according to McCaig. He says that while FMC, in a sense, gave
his firm the idea for this kind of business, Spotnik has been running with it
ever since.

"We certainly have a ton of interest [from other prospective clients]
at the moment," he says. That includes other Toronto law firms. McCaig
says the company expects to make other announcements within the next few months.
"But we’re all looking to see how this one unfolds first."

If the FMC service is heavily uses and the firm continues to be satisfied with
the results, others are sure try the same thing, he says.

The seeds for the project were sown when FMC IT staff witnessed Spotnik launching
a hotspot at a nearby coffee shop and saw the possibilities for doing something
internally for clients.

"It wasn’t that there was demand from clients for this service specifically,"
says Pinnington. "We really anticipated the opportunity. But we deal with
some very sophisticated clients, including many in the high-tech sector."

At the time, Spotnik was trying to sell FMC on a discounted corporate-wide
subscription that would allow its lawyers to use the public Spotnik hotspots.

Meanwhile, FMC went full speed ahead on the private hotspot project. It did
not already have wireless infrastructure in place, so it hired IBM to implement
a WLAN that includes four Cisco Aironet 1200 series access points on each floor,
plus other Cisco infrastructure.

The Cisco technology supports virtual WLANs. FMC can operate two or more VLANs
over the same infrastructure, one public — the Spotnik service for clients
— and one private for use by staff, each with its own authentication rules
and access mechanisms.

So far it has only implemented the public WLAN. Users who see the advertising
around the office or are told about the service by their lawyer can request
one of the re-usable security codes. When they associate with the public WLAN
through the Spotnik authentication server, they’re presented with a log-in page
where they enter their code.

Spotnik provided its own onsite server running triple-A software it developed
itself, and a broadband connection back to its Toronto Network Operations Centre.
The rest of the wireless infrastructure was supplied by IBM and is owned by
FMC.

"The reason we reached outside to [Spotnik] is that they have industry-leading
expertise in authentication and security," Pinnington explains. "They
provided installation and management of all those functions."

While the existing wired network infrastructure provides the backhaul between
access points, the public WLAN is completely separate from FMC’s corporate network.

"Wireless traffic runs over the wired infrastructure, but it does not
interact with production data," explains FMC manager of technical services
David Komaromi.

Komaromi says the firm will eventually implement a private (virtual) WLAN for
use by staff and partners, one that may include Voice over IP. In the meantime,
some, but not many, lawyers use the WLAN in the same way clients do.

Why the firm hasn’t already implemented a private WLAN, having invested heavily
in the infrastructure, is a little puzzling.

"As security standards improve, we will internalize certain services,"
Komaromi says at one point. "VoIP comes to mind as one."

Later, though, he downplays the WLAN security concerns, insisting that the
only reason for not moving forward on the internal WLAN is that the motivation
for the project — and its main focus still — is providing a client service.

Another reason, though, may be that Pinnington doesn’t see the value of an
internal WLAN.

"To be honest, I’m not sure there’s a compelling need [for firm lawyers
to access the corporate network wirelessly]," he says. "They can also
plug in a laptop [to the wired network] in our conference rooms if they’re working
there with a client."

Meanwhile, Spotnik’s McCaig points out that running public and private networks
on the same infrastructure is not a new idea. His company is already doing the
same thing in partnership with communications provider Telus at BC Place, another
major downtown Toronto office complex.

"Along with Telus, we built full in-building Wi-Fi infrastructure on which
there are both public and private layers," McCaig says. "The public
layer is managed by Spotnik — so in that sense it’s very similar at a high
level to what we’re doing at Fraser Milner."

Spotnik and its partners may not be the only ones trying this approach. It
makes too much sense for others not to be thinking along the same lines. If
they are the only one now, that won’t remain true for long.

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