The Power Behind Wholesale Hotspots

By Naomi Graychase

October 17, 2003

Cometa Networks has always held that it would place hotspots at 20,000 new locations over the next few years. Riding on the network of parent company AT&T, maybe it has a chance.

If Wi-Fi upstart Cometa Networks has its way, in the very near future you'll never be more than five minutes from a hotspot. For suburban dwellers, that would be a five-minute car-ride; for the urban pedestrian, a five-minute walk.

Cometa, founded last year by industry players Intel, IBM, and AT&T, has crafted an ambitious plan to roll out more than 20,000 hotspots over the next few years, nationwide -- 15,000 of them by 2005. While each member of the five-company Cometa consortium offers essential value to Cometa's mission, it's AT&T's PWLAN service that will function as the backbone of Cometa's network.

John Balbach, Director of Marketing and Communications at Cometa, says, "We wanted a partner that could scale nationally as its network was developed, and AT&T has that scalable national footprint." After a small test-run in partnership with 75 McDonald's restaurants in New York City, Cometa recently began testing the water in a more serious way by rolling out roughly one hundred new hotspots in Seattle at a variety of sites. The Cometa model is based on the notion that users will want reliable access at various locations as they move naturally throughout their day. In Seattle, for instance, users can access hotspots at Barnes & Noble Booksellers, Tully's Coffee, World Wraps restaurants, Equity Office (including more than half a dozen buildings in downtown Seattle and Bellevue), Seattle Central Community College, Overlake Golf and Country Club, and Broadmoor Golf Club. Each of these sites are the kinds frequently trafficked in a typical Wi-Fi user's day, so that even while getting a morning coffee or taking a lunch break, one is never too far from the Internet.

Essential to the company's plan to roll out hotspots over the next few years is AT&T's sizable existing network, which has the capacity to grow as Cometa grows. Bob Donnelly, director of Business Development for AT&T, describes his company's role in Cometa this way: "Our contribution is to build a scaled network for Cometa allowing them to operate tens of thousands of sites with a fairly large subscriber base coming from multiple service providers. We deliver a network they can run their services on top of. That network then includes access, transport, and Wi-Fi services that are necessary to subscribers, like authentication."

Cometa does not sell to consumers -- it's prohibited by their charter. As Balbach explains, "The value-add we bring is securing the location where the hotspots are placed and the maintenance of those hotspots, which we offer to cable operators, communication companies, wireless companies, and others."

In Seattle, there are currently two carriers--soon to be four-- offering Cometa service under their own brands, each with its own pricing, but with access to all the same hotspot locations. AT&T finds value in this wholesale selling model because, says Donnelly, "In our opinion Cometa gives a service provider like AT&T a broad range of services as well as geographically important locations within certain metro areas. Rather than us having to go out and focus our energy in Wi-Fi on creating hotspot locations, we have the opportunity to focus on our subscribers' needs. It doesn't preclude us from working with other providers. Cometa is one more element in the delivery of our services."

20,000 hotspots is a number the company has claimed as target since its inception, but that's a significant ramp up from the hundred or so Cometa is currently operating. This target number is not random, nor impossible to reach, according to Balbach.

"We looked at the creation of a hotspot network in the 50 largest U.S. markets, which would be within a five minute walk or drive. When you plot what that means, you need about 20,000. AT&T is already everywhere. They are large enough that it's not inconceivable."

Progress toward that ambitious goal, however, is not without its challenges. "Right now," says Balbach, "we feel that Wi-Fi is at a stage where cellular was in its infancy. When cellular started, it was a very expensive thing and only a few people used it. A few cities had access within a couple of blocks. As people began to see that cellular was a great improvement in their business lives, the network became pervasive, ubiquitous, and prices dropped; more and more people outside of the core business users got on board. So, we're looking forward a few years to the notion of broadband wireless data moving in a similar path. It's not just voice being ubiquitous; it's the Internet itself."

AT&T plans to help Cometa stay in the game by creating the service elements that will allow Cometa to scale to the level it foresees. "It's a tall order to place that many orders for that many circuits," says Donnelly. "I think it's pretty lofty, but if you don't think big, you won't achieve big things."

Will Cometa meet its own deadlines? They certainly think so, but a report this past summer from Pyramid Research suggested it would only meet about half the hotspots it wants, even after having pushed back its goal to as far as 2006. To reach more it would have to install several hundred per month starting immediately.



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