Azulstar Networks found religion in the free Internet access business model; Rio Rancho may agree enough to give up its shared revenue.
It’s not 100 percent official yet, but if the city council of Rio Rancho, New Mexico votes as expected tomorrow night, that municipality will soon offer citywide Wi-Fi Internet access to every resident and visitor for free.
Azulstar Networks of Grand Haven, Michigan is the provider of the Rio Rancho network (as well as a few in its home state). Up until this point, the company was charging for wireless Internet access with different tiers of service ranging from 256 Kilobits per second (Kbps) up to 1.5 Megabits (Mbps). If the vote goes through, however, anyone can go online in the city for free, though limited to a 100Kbps download data rate — and only for 10 hours per month, with $1.50 per minute charges for tech support.
How did it all come about? Thank George W. Bush. When the President came to Rio Rancho in early February for an “Intel Friday” conference, Azulstar decided to turn off all fees for the network for a short time. Even without promoting the move, Tyler van Houwelingen, CEO of Azulstar Networks says, “the [traffic] numbers were staggering.” When they turned off free service, the company was bombarded with calls asking when it would be free again.
Put that together with the headlines about Google’s proposals to cities like San Francisco, promising free citywide Wi-Fi, and you have what van Houwelingen calls an “unstoppable trend.”
Still, free is a long way to go after charging— even Wireless Philadelphia, perhaps the most ambitious citywide Wi-Fi network planned to date, expects to charge $10 a month to low income families.
What’s more amazing is that the city of Rio Rancho will be giving up any of the money made in its current revenue-share deal with Azulstar.
“The city, Rio Rancho, and Intel, wanted us to do this,” says van Houwelingen. “They thought it was right for the community. The city is forgoing the revenue sharing for everything,” even for the higher-tier levels of service and VoIP.
What’s the upside for the city? Attracting businesses and employees, in theory.
What’s the upside for Azulstar? Even if they don’t hit usage expectations — an increase of 10 to 20 times the users is expected, van Houwelingen says they can cover the cost (even after a complete upgrade of their back-end systems to handle the load).
Plus, it’s not like Azulstar won’t make money off the free users. Anyone signing onto the network for free has to go through an Azulstar portal page which will feature highly targeted advertising — ads which can make the company as much as 50 times that of a generic commercial. Some may even be full video multimedia commercials. “It’s like the power of broadcast TV, but we know where the people are connecting from,” says van Houwelingen.
Of course, the goal is to make the service enticing enough that people want to upgrade to Azulstar’s paid services: $20 a month for 400Kbps download speeds or $40 for 1.5Mbps. Both get complimentary tech support. Commercial VoIP service is an additional $30 per month. There are other services for small businesses. The free access doesn’t have enough bandwidth to support VPN traffic for corporate users, nor will it work with the VoIP service.
van Houwelingen notes that even free, wireless broadband is not true for everybody, and that may be even more so for Rio Rancho where the majority of the residents are still using dial-up to get online. [Quote redacted on 3/15/06]
Rio Rancho’s population is estimated at about 70,000, and the city covers over 100 square miles, but only 45 of those square miles have a concentrated population, says van Houwelingen. Those out of range of the network can get third-party equipment and antennas to extend the Azulstar signal to them. The company is hoping in the future to push such equipment needs back to the consumers, since the bridges and other products needed are readily available at retail.
The Rio Rancho network is made up of Meru Networks equipment, about 350 access points in total, which are connected by a backbone of Proxim and Alvarion long-distance radio equipment. Azulstar used equipment from other vendors in its deployments in Michigan — one city is using Tropos Networks mesh products, for example — but van Houwelingen says the Rio Rancho setup is optimal, especially for controlling the VoIP.
Azulstar is even ready to fend off liability issues by making a version of the free access readily available for children. Down the road, there will be a virtual network in Rio Rancho with a separate SSID called Azulstar-kids. Web sites accessed through this SSID will be completely content-filtered to keep parents from worrying. “You’ll need a credit card to validate your age to get on the regular network,” says van Houwelingen. He knows people are hesitant about that even if the company says it won’t charge, but admits, “We can’t think of a better way to solve the problem.”
This could all be premature if the city makes an unexpected reversal this week and shoots down the proposal of free service. But even if it doesn’t happen in Rio Rancho, van Houwelingen says, “The writing seems to be on the wall…. free Internet access is something that is a win-win model for everybody involved.”
Look for similar limited but free service in the Azulstar networks in Michigan to follow.