You Can't Fight The Railroad
April 29, 2005
The successes for one tri-state area Wi-Fi entrepreneur are tempered by persistent frustration in trying to get wireless Internet service installed in the place where commuters could most use it.
Ah, the joys and sorrows of a small, independent Wi-Fi entrepreneur!
Meet Craig Plunkett, a networking jack-of-all-trades with three modestly successful Wi-Fi enterprises underway in the New York area, and a Don Quixote-like quest to bring Wi-Fi to New York commuter trains. It's a quest that has so far met with nothing but frustration, but Plunkett is glad to talk about it anytime.
He first formed CEDX, a systems/network integration firm, to market his own consulting services back in 1997. Plunkett describes it as a "traditional rent-a-body consulting operation." CEDX (pronounced sed-ex) is an acronym but, despite the vaguely high-tech sound, it actually stands for the first names of the three then existing members of his family, the X representing a planned but as yet unborn fourth.
"About midway through that early period," Plunkett says of CEDX, "I realized, this really doesn't scale very well. So I thought, let me look for a business thing to get into that does scale."
Reuters, one of his clients at the time in 1999, had just installed an office WLAN. Plunkett immediately saw that Wi-Fi was going to be big. One of his first thoughts, he says, was, 'Gee, wouldn't this be great on the trains.' The train, of course, is a major feature of the suburban New Yorker's life—it's where he spends a couple of hours every day getting to and from the Big Apple.
Plunkett decided Wi-Fi would be the business thing that he could scale up. Five years later, he has three Wi-Fi-based operations, though they're all pretty small-scale:
Next on the agenda, he says, is to start consolidating his empire, integrating the network back-ends for greater efficiency so customers can use all three services with a single subscription.
The most interesting of Plunkett's ventures—partly because of its obvious relevance to his Wi-Fi-on-the-trains quest—is Mad Cow. It's also the biggest, with 15 employees.
Wi-RAN was developed originally to enable an internal application at Hampton Jitney, which operates commuter services between Manhattan and the Hamptons at the eastern end of Long Island, as well as Boston and Florida runs and special excursions such as a NASCAR racing tour. The company had implemented a mobile ticketing and reservations system—a Palm PDA with a credit card swiper. Customers could get on the bus ticketless, and pay with a credit card. Then, when the bus returned to the depot, the transaction data on the Palm was synched with the company's computers.
"Wi-RAN gave them the ability to process credit card charges live," Plunkett explains. "It means if they do get a bad credit card from somebody, they at least find out while the person is still on the bus, so they can try and get cash or another card. The public hotspot is a ride-along." (Pun intended, we think.)
Wi-RAN is a wireless "platform," he says, with a Linux-based server on the bus. It also supports GPS for keeping track of where buses are and whether they're on time, as well as a Bluetooth access point to support riders without Wi-Fi devices. Backhaul is cellular—3G EV-DO (Evolution Data Optimized) in some places, 1xRTT in others."There's always going to be dead spots," Plunkett concedes. "We get varying coverage [on Hampton Jitney routes], but on the main bread-and-butter routes to the Hamptons, it's pretty solid."
Network throughput ranges from dialup speeds to 256 Kbps when in EV-DO coverage areas. Subscribers pay $30 a month or $6 a day, a recent drop in price from $40 and $8.
Hampton Jitney piloted the service last year on four buses. It's now on 20, and will be on the company's entire fleet of 36 by Memorial Day. Plunkett won't say how many subscribers the service has—usually a sign that there aren't many. There is always at least one user on every run, he says, and now that the service will soon be available on all the buses, he expects the subscriber base to grow.
In the very short term, Plunkett is starting to consolidate his various networks by offering Wi-RAN customers roaming privileges on the CEDX hotspots in Manhattan. There are only nine of these so far. Plunkett adds a new one "every once in a while," he says. "What I'm looking for are franchise owners with multiple locations—the guy who owns ten Dunkin' Donuts, for example. The national brands have pretty much all been snapped up. We're looking for people who want to grab that high-end demographic, those half million or so Hampton Jitney riders."
Plunkett built Fire Island Wireless, which now has five employees, on the ashes of another company, Long Island Wireless. That company went belly-up, leaving customers stranded. It addresses another high-end demographic: the year-round residents and summer cottagers on Fire Island, mostly well-heeled New Yorkers.
Plunkett inherited some of the roof rights owned by Long Island Wireless, but has since replaced all the infrastructure. He uses 11b Wi-Fi for the last 100 meters, and Motorola Canopy for backhaul. The network covers virtually all of the island, with hotzones in some areas where residents can get access with just a Wi-Fi card in their laptop or PDA. Residential customers further away from the access points require rooftop antennas.
Fire Island had 150 subscribers by the end of last year. Most were seasonal subscribers. Year-rounders pay $300 a year, cottagers $100 a month, and casual users $10 a day. The prices are a tad high, but there is little DSL on Fire Island and no cable—and residents are for the most part wealthy.
Plunkett is still, meanwhile, banging the drum for Wi-Fi on Big Apple commuter trains. He's been trying to get the Metropolitan Transportation Authority (MTA) interested for almost five years. The MTA left the decision up to the two railroad companies it oversees, Metro North and The Long Island Railroad. Plunkett first made a presentation to Metro North three years ago, but neither railway will entertain a proposal from CEDX, Plunkett says.
Part of the reason for this, he acknowledges, is that the railways were burned a few years ago when they agreed to let AT&T put cellular-based mobile pay phones on trains. When prices for cell phones plummeted and everybody started carrying them, the mobile pay phone project "sunk like a stone," Plunkett says. "So there is some understandable reluctance to provide Wi-Fi equipment on trains just to have it obsoleted like the phones." The railway authority's concern is that customers will eventually be able to get high-speed Internet access on the trains using 3G phones or computers equipped with 3G modem cards.
"But if they adopt a laissez-faire approach, they won't realize any revenue from 3G," Plunkett argues. "And if they decide to adopt Wi-Fi, they would at least reap some revenue from having the franchise. They would also increase direct revenue from higher ticket sales. Especially on the mid-day service, more people would take the train rather than driving if they could make productive use of the downtime."
The train companies aren't buying it. Plunkett is frustrated. He has tried to get government funding for a Wi-Fi deployment, and is now networking with the Connecticut Commuter Council and other groups to try and breathe life back into the idea.
"Everybody I've talked to says they'd be willing to pay extra for the service," Plunkett says. "We just want the opportunity to present a business plan, do a pilot and respond to an RFP."
Is that so much to ask?
In the meantime, Plunkett still makes most of his money from renting himself out as a systems/network consultant. But the Wi-Fi ventures are beginning to scale up. "They're starting," he says, "to pull in some significant revenue, which makes them attractive things to work on and develop further." Such is the life of the Wi-Fi entrepreneur.