Verizon Wireless Cuts NYC Wi-Fi

Verizon Wireless is pulling the plug on its free wireless
Internet access service that uses New York City phone booths as “hotspots”
for its DSL subscribers.

The company’s wireless unit says it will phase out the service over the
next two months and begin concentrating on the deployment of a fee-based
cellular Internet service for the metropolitan area.

“As we continued to evaluate it the usage just wasn’t living up to
expectations,” Bobbi Henson, a spokeswoman with Verizon, said. “The spots
were not well utilized.”

Already in 2005, Verizon Wireless has poured $138 million in network
enhancements into the city, and in 2004, the company invested a total of
$475 million.

Henson said Verizon will focus on Evolution-Data Optimized (EV-DO), which
provides a “better business model” and a greater optimization for its

“It offers far wider coverage and seamless connectivity for roaming
laptop users,” she said.

As reported by, Verizon originally installed short-range Wi-Fi transmitters in 150 hotspots in the city as part of a plan to bring wireless Internet access to its subscribers throughout the Big Apple and differentiate itself from cable broadband rivals.

The telecom planned to have 1,000 access spots in the city by the end of
2003, but only 380 existed before the company decided to halt the
experiment. The hotspots cost Verizon about $5,000 each to deploy.

In 2003, Wi-Fi was gaining momentum and Verizon looked to catapult its
DSL business on the back of the emerging technology, offering it as a value-added service to its DSL customers. The effort was seen at the time as a
move to catch up with rival providers of high-speed broadband services.

“Free access to our data network through emerging Wi-Fi technologies
gives our customers benefits they can get from no other provider and makes
our broadband service uniquely competitive,” James Otterbeck, a Verizon
senior vice president, told in 2003.

The company is now banking on the paid subscription EV-DO service to
provide a more encompassing and effective service for its customers,
according to Henson.

“A lot has changed over the past two years in terms of wireless access,”
said Henson. “Everybody’s trying to look for a business model around
[Wi-Fi] … But the better business model in our mind is the EV-DO network.”

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