Pittsburgh ISP Launches Hotspots
February 05, 2003
After a year long free pilot program, Telerama Internet is ready to launch for-pay hotspot services with partners around the Steel City -- a location that is embracing wireless faster than most towns in the United States. But will users used to paying nothing pony up the money?
Twelve-year-old Telerama Internet, which says it was the third ever Internet Service Provider launched in the United States, is this week taking the wraps of its Telerama Wireless Internet Hot Spots program. The company will provide venue owners with a two-week free trial of the service before asking them to offer for-fee services to customers.
The Telerama Wireless program has been in a trial phase for about a year according to Doug Luce, the company's President and Founder. His reasons for wanting to see ubiquitous public-access Wi-Fi throughout Pittsburgh aren't very different from many other who have a vision for hotspots: "I wanted to go out and get coffee and log in with a nice fast connection."
After a year, the free trial has expanded to 24 locations in the city of Pittsburgh, mostly coffee shops (even two Starbucks locations), but Luce also mentioned health clubs and laundromats (what could be better than surfing the Web while waiting for your blue jeans to dry?).
Luce says in that time they've signed up 1100 unique laptops (based on tracking the computer's NIC card MAC address).
Of those 1100 users, not a one has paid yet. They all got online for free. Until now. Luce's plan all along has been to make money from the hotspots via individual subscriber fees. End users will have a myriad of options for payment: $4 for unlimited single day use, $29 a month unlimited which comes with a Telerama dial-up account (which is still the company's bread-and-butter, after all), or $59 a month which includes a DSL account. The latter two plans also includes e-mail and Web hosting space. Students or those working for a non-profit organization can get unlimited wireless hotspot access for $9 a month.
Current users getting a free ride get a 30 day grace period-- they pay $9 while they decide which plan above to choose. And anyone who jumps ship from another ISP to Telerama's service gets one month of hotspot access for free.While the prices aren't bad, why pay after you've had a taste for free?
"I'm sure we'll lose some," says Luce. "Some people just don't want to pay.... [but] we do have to charge for this. If we can keep all 1100, that's great. Anecdotally, [based on] the turnover we get....customers are addicted to it."
Keeping customers is half the battle, the other half is getting new customers. For that, the service has to be readily available, and that means hotspots in many locations. As part of the pilot, Luce says they partnered with any venue that wanted to be part of the network. Coffee shots were, by far, the most interested -- and sometimes the patrons were the ones soliciting the network to Telerama.
In fact, a couple of the Telerama hotspots are almost dual-hotspots -- the two Kiva Han coffee shops located on South Crag Street and Forbes Avenue, respectively, each have a free Telerama setup and a connection as part of the Grok Secure Connect hot zone, a joint venture between non-profit 3 Rivers Connect and wireless integrator Grok Technology. Grok Subscribers pay $18.95 a month for unlimited access, or $5 a day, $12.95 a week or $154 a year. Telerama is not affiliated with the Grok hot zone.
Still, there appears to be no downside for venue owners: Telerama pays all the costs of the installation of an access point (usually Cisco equipment) and installing a high speed line (they've used T1s but will likely use DSL for future installs). The venue gets free Internet access for their business computers, $9 dollars for every person who signs up for service in their location, and revenue sharing.
"We charge people 29/month, the costs come out, the rest is in revenue sharing pool," says Luce. "We see who had most usage...that establishment gets the most money."
The company has put together a sales incentive package for local hosts spelling out the benefits.
Being in Pittsburgh, a city that seems to be strongly behind the spread of Wi-Fi, isn't going to be enough for the Steeltown native ISP, however. Luce says "We'll be piloting in another geography out west soon. We don't want to stay local."