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07/12/2004: "What are you going to do when its free everywhere?"

I once asked the assembled board at Wayport this question, mere months before they installed Dave Vucina as CEO, back in the summer of Y2K. I doubt my query and rhetoric had anything to do with the transfer of power back then.

Glenn reports that Continental bucks the for-fee airport/airline trend and offers free Wi-Fi in all of its U.S. Presidents Clubs.

Consider this a trend, and not only in just the clubs. In most airports, the airlines lease the gatehold areas from the airport authority. It won't be long until the airlines install free WiFi for their passengers who are waiting to deplane, as well as those waiting in the clubs. Most airlines of any size already operate a data network for their operations. Extending this (via a couple VLANs on a switch for transport), using the now-popular "Multiple-ESSID" read the patent application option found in several products, will be straight-forward for all but the lamest of IT departments.

The natural price of WiFi is free. There is no barrier to entry, (the FCC has ensured this now) Its too easy and too inexpensive to install, and despite fears, uses little bandwidth. Just as many of the hotspot providers and other who attemtped to provide subscriber aggregation (or aggrivation) predicted customers would seek-out those business that had installed WiFi, in the second wave, usage will occur most often in those places that don't charge for access. When Starbucks finds that its bottom line is suffering because people don't want to pay.

If you're in the business of providing hotspots or aggregating subscribers its time (perhaps even too late) for you to begin to look for a new business model, one that doesn't count on revenue directly from the subscriber.

Wayport seems to have figured this out (nearly four years after I queried). Its going to have its roaming partners pay, per location.

This means that Wayport could charge a hotel chain for access at only its hotels, or across the entire network, probably in order for the hotel's "guest rewards" program to provide "free" connectivity as a "gift" for people who stay in their hotels a minimum number of nights per month or year. Carriers such as SBC, ATT and Verizon will likely pay for access to the entire plant, and the carriers can, in-turn, provide WiFi for free to their subscriber base, or on a flat-fee basis.

To the subscriber, this access appears free, or nearly so. The friction evaporates, and usage mushrooms. Metcalf's Law takes over.

Metcalf's law states that the value of a network scales as 2n, where n is the number of persons connected. Consider AOL as an example. In the fourth quarter of 1996 AOL instituted flat rate pricing. This led to dramatic growth in use. From that time until the second quarter of 1997, average daily use grew at an annual rate of approximately 400%. After six months, the growth settled down to an annualized rate of about 26%.

The same thing is about to happen to "free Wifi", or Waypor't new model, (where WiFi appears to be free), or some combination of the two. If the Community Wireless movement wants any part in this, it had better figure out inter-network "roaming", fast.