The Road to Single Billing

By Adam Stone

September 05, 2003

Nomadix and others have signed on as members of the group hoping to push forward a single billing standard for the hotspot and cellular industries -- all wireless access, in fact. The problem is, the differences in technology and business models might mean it's a long way off.

At wireless aggregator GRIC, Director of Product Management Lumin Yen faces an ongoing problem, one that has dogged the steps of aggregators and carriers alike as they seek to expand their positions in the Wi-Fi market.

"There are a lot of technology differences, there are a lot of billing-model differences," Yen says.

It's like this. Everybody wants "single billing," meaning that a user can go to a hotspot and have Wi-Fi usage billed to his or her primary wireless account. Among the myriad hurdles to single billing is the technological stumbling block of incompatibility. Hotspot operators and aggregators such as GRIC may prefer one billing mechanism, while each of the main wireless carriers will employ its own dissimilar billing infrastructure.

Overcome these compatibility issues, some would say, and the whole industry moves a big step closer to the dream of single billing.

That is just what public-access networking provider Nomadix is trying to do, through its involvement in the WLAN Accounting and Settlement (WLANAS) Working Group. The group, created by the Internet Protocol Detail Record Organization (IPDR.org), has been working to create a seamless interface between the hotspot market and the carrier billing systems. Nomadix's Chief Technical Officer Joel Short says the technology soon will be within reach.

As it stands now, a custom connection is needed each time a hotspot wants to make a link to a carrier's billing apparatus. By the end of the year, Short said, a standard will be in place that all parties can adhere to, thus making it possible to creating billing connections quickly and easily.

Analysts say that such streamlined back-office connections could give the hotspot market a significant boost.

"Anything that simplifies billing is definitely a good thing," said Eddie Hold, a wireless analyst with research firm Current Analysis in Sterling, Va.

More than just a boon to consumers, the possibility of single billing opens up a new range of options for wireless providers, who have said they are eager to tap into the growing Wi-Fi market. If hotspot use can be easily billed to a consumer's primary wireless account, "it means that the carriers can start to offer Wi-Fi bundled in with their other services. They can then start to sell it as a small incremental amount" on top of one's ongoing wireless payments, rather than as an entirely distinct charge, said Hold.

In such a scenario, hotspot usage could potentially increase not just because of the convenience factor, but because of the transparency factor. Wrap everything into one bill, some say, and consumers will be less likely to be discouraged by what they perceive to be an additional charge.

"The user does not have to make purchasing decisions at the point of access: 'Do I buy for the day or do I pay for just a half hour?' " said Yen. This is decision making is a major psychological barrier to hotspot usage. Avoiding that is exactly the kind of thing those involved in the work of developing a seamless-billing protocol want to avoid.

"One of the major problems in the market today is the business model for users to get connected, both in terms of users finding the hotspot but also in terms of users having to take out their credit cards and get that access," said Short. "Once you have a single bill, you don't have to continue to resell the service on an ad hoc basis. It becomes a transparent subscription service, where the user doesn't have to think about taking out a credit card, and about all the security risks associated with that."

Still, there remains a good deal of work to be done. The development of a standard -- even if it should come about on the expected timetable -- would be only a first step toward establishing single-billing arrangements.

"There are still the business relationships that have to take place, along with the technical interfaces," Short cautioned. Hotspot operators and aggregators would still need to negotiate relationships with some or all of the wireless carriers. Who would take what share of the income? How would the client relationship be managed? All the usual nuts and bolts of partnership still would need to be ironed out.

Of course, a simplified billing protocol would nonetheless be a very good start indeed, said Short. "As this technology progresses, that does pave the way for more of these roaming relationships to be set up, which in turn will enable a much more effective business model."



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