Hotspot Road Trip, Part 3

By Jeff Vance

October 04, 2004

Heading out of Chicago into the heartland of America sparks discussion on the nature—and potential for making money—that exists in today's Wi-Fi public access.

On my last day in Chicago, I visited a hotspot not listed in any of the Wi-Fi databases, the Heartland Cafe. I learned about the Heartland the night before after visiting another unlisted hotspot in the Bad Dog Tavern.

The Bad Dog, technically, qualifies more as an unsecured WLAN, although the staff seems to peg it as an unofficial hotspot. I was meeting a friend, and out of habit I tested for a signal with my WiFi Finder. Sure enough, I found one. I asked the bartender about this new, undiscovered hotspot.

"I think the owner has it for the business, but just leaves it on," he said. "He doesn't really care if people use it, but he doesn't advertise it."

An interesting approach. I've heard of free hotspots as marketing ploys or community builders, but laissez-faire hotspots?

After telling the Bad Dog bartender about the road trip, he said, "If you want to see if hotspots have really taken over Chicago, try to find one in an Old Style bar."

In Chicago when you see a neon Old Style sign, it's a kind of code, translating to dive bar. Where I grew up, Pittsburgh, the equivalent is Iron City, which legend has it was brewed not from mountain spring water but from steel-mill effluent.

A war-driving hunt for an Old Style hotspot was fruitless, but I did turn up a hotspot at a sports bar (Silvie's Triple D), and I stumbled across the Heartland Cafi.

The Heartland is a throwback to the Nixon-era counterculture. A restaurant, bar, and bookstore under one roof, the Heartland offers buffalo burgers, plenty of vegetarian entrees, and heavy doses of protest literature.

It's hardly surprising then that a restaurant with a co-op spirit would also offer a free hotspot. "A guy came around offering to install a pay service for me," said Michael James, co-director of the Heartland. "I considered it, but I thought, 'why should we make people pay for this?'"

James said that one of the main goals of the Heartland is to foster a strong community, and providing free Internet access is one way to do this.

A year ago, I wrote an article about the free vs. subscriber hotspot debate. In the convening months, clearly it has been the subscriber-based model gaining the most traction, with T-Mobile, Boingo, iPass, Surf and Sip, Wayport, and others all making strides. Meanwhile, Flying J and Truckstop.net have gone a long way towards making Wi-Fi ubiquitous at truck stops, while hotspots are becoming an up-sell service at such diverse places as campgrounds, marinas, and even sporting venues.

Clearly, the hotspot space is in a land-grab phase, and as with all land grabs, things start to settle down after a while. It's likely that providers will consolidate and business models will change.

"I think what Boingo and iPass are doing is very smart," said Scott Shamp, Director of the Mobile Media Consortium. "They see themselves as syndicates, so they aren't investing heavily in deployments. They're quietly letting others build out the network, which they then stitch together, facilitating roaming and providing back-end services."

However, the business case for actually owning and deploying hotspots is a little murkier. During my conversation with Shamp, I mentioned my belief that hotspot business cases must evolve, and the two most logical ways to go are as amenities (for hotels, convention centers, and restaurants) and as pieces of consumer communications bundles, as Verizon has done in New York. Subscribers of Verizon's DSL service in New York receive free access to Verizon hotspots around the city. Obviously, this is a marketing strategy, but it's also consistent with recent telco efforts to bundle services together — wired voice, mobile voice, Internet, or the so-called triple play — in an effort to boost consumer stickiness and increase overall average revenue per user (ARPU).

As for amenity service, this is happening already.

"Under certain ratings systems, in order to receive a five stars, hotels must offer Wi-Fi services," Shamp said. He also noted that while there's a phone and TV in every hotel room, both have services layered over the basic free uses, whether it's high-priced long-distance rates or pay-per-view movies. This model, though, argues for a basic free Internet amenity, possibly a certain level of bandwidth that allows for free e-mailing and basic Web surfing. Once you need higher bandwidth or lower latency, the hotel could charge for these as premium services. After all, many hotels already offer free Wi-Fi and use it simply as a differentiator.

Interestingly enough, I've received a number of e-mails from people who've read my earlier posts and want me to know about community-based free hotspots. I always expect to hear from the PR machines serving the companies in the space, especially during this build-out phase, but the response from the free providers has equaled that of the subscriber-based companies.

Two examples are Jim Sullivan and Michael Oh. Sullivan operates the Wi-Fi Free Spot, an online directory of free hotspots. According to Sullivan, the directory adds anywhere from 40 to 50 new free hotspots per month. While this doesn't match the numbers that the subscriber-based hotspots are putting up, it's impressive, and considering that many of the free hotspots fly under the radarscope, known only to loyal patrons, it's clear that grassroots hotspots are going strong.

Michael Oh operates the NewburyOpen.net in downtown Boston through his company Tech Superpowers. I used to live in Boston and can vouch for the network, having used it many times at the Trident bookstore.

"Drop by Boston," Oh offered. "We'll turn your '69 Catalina into a Wi-Fi-mobile for a day and park it in front of the local Starbucks."

As I headed out of Chicago, mired in bumper-to-bumper traffic on the Eisenhower Expressway (this on a Sunday afternoon!), I thought about Oh's offer and figured a satellite-Internet/mobile-hotspot road trip would be worth considering for the future.



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