Verizon Could Spark ‘Me-Too’ Wi-Fi

Car air conditioning systems were once a pricey option, available only in luxury nameplates. But as technology improved and manufacturing costs sank, AC became standard even in economy cars.

Verizon’s move to provide free Wi-Fi with home or small business broadband contracts will likely trigger a similar transformation in the telecom industry.

Although Verizon’s push is only in New York (1,000 hotspots by year’s end), the carrier has grand plans. Executives were reluctant to announce a rollout schedule, but hope to use feedback from the Big Apple to launch in other East Coast markets.

And it won’t just be Verizon. Competitors will have to follow.

“DSL providers like SBC and BellSouth will leverage their infrastructure and offer free Wi-Fi to better compete against cable,” Forrester analyst Charles S. Golvin wrote in a research note today.

Dave Burstein, who follows the industry for DSL Prime, takes the Wi-Fi vision a step further.

“The telcos could wire 300,000 hotspots around the country (and exchange traffic) for less than $1 billion, building a remarkable network across the country for less than 5 percent of one year’s capital spending,” Burstein said.

The coming chain reaction erases any hope that consumer Wi-Fi will be a standalone source or revenue. Several carriers are in trials or launching Wi-Fi service, but consumers have been reluctant to pay montly fees of $8 and higher for the privilege.

Instead of consumers, the Wi-Fi market will be limited to large corporate customers willing to pay a premium for high-speed local area network connections, Golvin said. He predicts that AT&T and Sprint will partner with Wi-Fi firms to bolster remote access. The carriers would likely charge on a per user basis.