Hotspots Get Seal of Approval

By Ed Sutherland

January 16, 2003

The Wi-Fi Alliance hopes its new program for public hotspots will make the words 'Wi-Fi ZONE' a household name, but it could amount to nothing if the big players don't sign on.

Wi-Fi hotspots have an image problem. While 802.11 wireless networking in homes and business may soon rival Budweiser in brand recognition, the public face of Wi-Fi is languishing in near invisibility. With a new logo and some minimum standards, the Wi-Fi Alliance's Wi-Fi ZONE program hopes to heat up the hotspot market.

The Wi-Fi ZONE's goal is to "really kick-start the hotspot market," says Dennis Eaton, chairman of the Wi-Fi Alliance, the non-profit industry

consortium best known for the testing of 802.11-based networking products for interoperability. The ZONE program sets a minimum standard for hotspot operators, provides unified advertising and gives consumers some reassurance in the way of a service baseline.

To take part in the program, hotspots must use Wi-Fi certified equipment, be available 99 percent of the time, offer at least a 2 Mbps signal, have at minimum a 128kbps connection to the Internet, and employ Virtual Private Networks for security.

The Wi-Fi ZONE is free for a year to qualified hotspot providers who apply before March 31, 2003. After the cut-off date for free signups, a yearly membership in the program starts at $100 for each license with a $2,000 maximum for each hotspot. Wi-Fi Alliance members get 50 percent off on license fees and pay only $5,000 for an unlimited number of licenses. Eaton says libraries, colleges and public commons can take part in the Wi-Fi ZONE free of charge.

A Modest Proposal

Eaton said the Alliance "set the requirements to be modest" so most applicants could be approved. Items such as roaming between different service providers or unified billing -- both years away from realizations -- are mentioned only as recommendations.

The Wi-Fi ZONE extends beyond the Alliance's previous hardware certification and 802.11 promotion efforts to address "more service-oriented issues," says Eaton.

Along with becoming more aware of a hotspot's existence and a greater assurance of equipment quality, consumers of public Wi-Fi services will now have an identifiable resource for complaints.

Hotspots carrying the Wi-Fi ZONE logo must also provide "real person customer support" and include a customer support telephone number.

While Eaton says the Alliance will not handle individual disputes, the Wi-Fi ZONE will "monitor patterns of complaints" from consumers. If a hotspot accumulates enough negative complaints, the group will act.

The Wi-Fi Carrot and Stick

Losing the ability to display the Wi-Fi logo "is a pretty substantial stick," assures C. Brian Grimm, the Wi-Fi Alliance spokesperson. An offending hotspot would lose the associated promotional support, including an online listing available to users searching for nearby Wi-Fi ZONE-approved locations.

Eaton says the Wi-Fi ZONE program is targeted at both small and large hotspot providers. Smaller providers clearly benefit from a recognizable logo and help marketing their service. Larger hotspot operators gain by the universal branding allowing travelers to make the connection between their local and international corporate identities. Eaton says two of the earliest providers to sign up are Japan's NTT Docomo and Sweden's Telia. Closer to home, there may be more of a problem getting the biggest hotspot providers on board the Wi-Fi ZONE express.

Both Eaton and Grimm doubt the largest hotspot provider, T-Mobile, will become part of the Wi-Fi ZONE branding program. Grimm calls it a "brand management problem." Not only are T-Mobile's expected 2,000 hotspots heavily linked to the Starbucks Coffee Shop brand, but the provider also has agreements with Borders bookstores, along with American, Delta and United airlines.

Possible Minimal Impact

"If the Wi-Fi Alliance is not able to secure the largest players in the market place, its impact on the adoption of hotspot services will be minimal," says Sarah Kim, analyst for the Yankee Group research firm.

Boingo Wireless is an aggregator of hotspot providers. While the providers are independent, "we'll certainly encourage our hotspot partners to participate" in the Wi-Fi ZONE program, says Boingo's Christian Gunning.

Sprint is also an investor in Boingo. The company has been hinting at getting into the hotspot market, but may have been waiting for such a unified brand before making its move.

"Millions of people a day walk through Wi-Fi hotspots and don't even know they could log onto a broadband connection. We need to start making the invisible networks more visible to our collective customers," says Gunning.

Few Hotspot Subscribers

If you build it, they can't come unless they know about it.

"The actual number of subscribers to hotspots is very low. One of the main reasons probably is the lack of advertising hotspots tend to do," says Gemma Paulo, analyst with the In-Stat/MDR research firm.

"This is actually something everyone's been waiting for," says Paulo.

Paulo believes the Wi-Fi Alliance's ultimate goal is attracting the cellular networks.

"This is an aggressive vision, but one that the Wi-Fi Alliance is surely aiming for. Many cellular service providers are now members of the Wi-Fi Alliance and are looking at ways of using hotspots as an add-on to their cell services," says Paulo.

Indeed, Eaton says one result of the Wi-Fi ZONE branding initiative will be eliminating the current fragmentation of the current hotspot landscape.

The Wi-Fi ZONE will give the Alliance "a steady revenue stream from potentially thousands of hotspot providers around the world on a yearly basis" -- just at the cost of some window stickers, says John Chang, a senior analyst with the Allied Business Intelligence research firm. A list of operators that have signed up with the program will be released in March, says Grimm.

Eaton says today, the Wi-Fi ZONE logo simply indicates there is Wi-Fi access available at a coffee shop, hotel or airport waiting area. In the future, he would like the Wi-Fi ZONE logo to approach the ubiquity of service now indicated by a VISA logo or an ATM network indicator.



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