Coastal Companies Launch WiFi Access Businesses

By Matthew Peretz

March 26, 2002

One on the East, one on the West, and both with strikingly similar revenue models.

San Francisco-based Sputnik, Inc. and New York-based Joltage Networks today unveiled WLAN access services designed to accelerate the proliferation of WiFi access points (APs) by enabling end-users to set up and become micro-wireless ISPs (WISPs) with minimal investment and experience.

Where the companies are similar is in their means of distributing the software necessary to enable would-be providers to become micro-WISPs. Both companies are offering the software as a free download. Sputnik calls it their Sputnik Gateway software and Joltage simply calls it their WiFi Joltage software. Both companies emphasize the software's user-friendliness and automated network discovery features.

The Joltage Networks software is patent-pending and proprietary in nature. The company stated that the software integrates with Joltage back-end services, including authentication, security, tracking, administration, billing, and payment solutions.

The Joltage business model is built around the concept of revenue sharing between the micro-WISP and the company, which calls the new providers 'HotSpot providers.' The company will also pay its partners to bring others into the fold and will provide support to all of its HotSpot providers. The Joltage Networks plan also offers its HotSpot providers the option of providing access free-of-charge, and simply using the software as a tracking platform.

Joltage was founded by Silicon Alley veteran Andrew Weinreich, who was founder and CEO of sixdegrees.com, an online community that has since been sold to Youthstream Media Networks, a publicly held company, for $125 million.

The Sputnik business model is also designed to enable anyone with a PC and a wireless NIC card to become a WiFi provider. This company calls its micro-WISPs Sputnik Affiliates, and emphasized some of the key features and functionality that Affiliates can enjoy.

The Sputnik software itself features a built-in router, a firewall, and SSL-based authentication to protect both Affiliates and other users. Log-in is based on user ID and password and with these, Affiliates can freely roam across all Sputnik Gateways free of charge. Affiliates also get priority access to their own node's bandwidth, with firewall protection of their internal network from public access.

Sputnik stated that for a limited time, users without a Sputnik Gateway setup can become what the company calls 'subscribers,' which means that they have access to existing gateways free of charge. Sputnik is investigating the revenue-sharing aspects of its business model, and trying to come up with appropriate pricing plans for Affiliates and upstream ISPs based on bandwidth that they provide. Sputnik was very clear in stating that in no way would the company support or encourage any Affiliate in violating their wired ISP's Acceptable Use Policies (AUP).

One other interesting note about Sputnik is that their software is open source. Sputnik was started by the co-founders of Linuxcare, and as such, has made the Sputnik Gateway code freely available under the GPL. The company is attempting to encourage development of its software and the code has already been released.

Sputnik CTO David Sifry said, "We have also seen tremendous developer interest in extending the platform in areas like virtual private networking (VPN) applications, voice-over-IP (VoIP), mesh routing, and enterprise wireless applications. We released the core Sputnik gateway code as open-source software under the GPL because we view the open-source development community as the world's most dynamic, creative development lab. Sputnik is working with developers to build the 'Apache' of wireless access."

Sputnik is also working on an Enterprise Gateway version of its product. This version would focus on issues of security and network management features. It is being designed using proprietary extensions of the base Gateway code and will allow remote configuration and management with solutions such as HP OpenView, IBM Tivoli, and CA Unicenter. The solution will integrate with sign-on systems such as RADIUS, LDAP, Novell NDS, and Microsoft Active Directory, and support security protocols such as EAP and 802.1x. These Enterprise Gateways will be capable of running VPN servers, intrusion detection software, and more.

According to the company, the Enterprise Gateway will be available in multiple configurations, including what it calls a Chokepoint Server which adds security and manageability features to existing access points.

Sputnik stated that it is currently working with OEM hardware partners to ensure product distribution. The Enterprise product is currently in testing and will be available in the second quarter of 2002, the company said.

Matthew Peretz is Managing Editor of 802.11-Planet.com



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