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A Carrier Wi-Fi Competitor

7:00 AM -- A new proliferation of public Wi-Fi hot spots -- located everywhere from beaches to big-box home-repair stores -- has many people in the wireless industry thinking revolutionary thoughts. With cellular wireless services from the biggest carriers remaining expensive, is there an opening for a new competitor, one built not by a single entity but through a partnership of multiple interested parties? Could a company that uses unlicensed Wi-Fi bands build a cheap, powerful alternative to traditional cellular?

Sure, say proponents, pointing to the fact that such networks are already emerging, without waiting for anyone to give them approval. And even though traditional cellular providers and cable network operators are now getting into the Wi-Fi game by building their own public Wi-Fi clouds, the revolutionaries see power in numbers, mainly the millions of potential network outlets already in operation. The question is, can those unrelated providers realize and capitalize on the potential their possible alliances can bring? Or will they eventually be overwhelmed by the deep pockets of the big conventional broadband suppliers?

Theory No. 1 is that the revolutionaries are already winning, that sheer numbers will be on their side since they have already built a wider network -- albeit one not yet banded together -- than even the richest carriers could build, even if they tried.

"Anybody can become a wireless operator," said Dave Fraser, CEO of Devicescape, while speaking at a one-day conference at Stanford University earlier this month. Fraser, whose company provides network services by tapping into an ad hoc network of public Wi-Fi spots, thinks that the sheer number of possible Wi-Fi providers in the world will make the public cloud the inevitable champion.

"The reality is, carrier Wi-Fi is going to be a niche," when compared to what will be available from homes, offices and businesses like coffee shops, Fraser said.

Carriers like AT&T might beg to differ, since Ma Bell in particular has been extremely active in not just pushing out public Wi-Fi projects, but in promoting them as well, with fancy infographics sent to reporters on a regular basis, touting how much Wi-Fi traffic AT&T is carrying. (See Offload Opportunity Forces New Wi-Fi Mindset.)

Mostly, these carrier clouds are being put into areas with cellular congestion, near sports stadiums or in smartphone-heavy towns like Palo Alto, Calif. While the new carrier Wi-Fi may help AT&T and other big providers with their cellular crunch, other industry observers see the carriers' desire to build out Wi-Fi to offload cellular congestion as not a true reflection of what the coming generation of wireless users are looking for. Instead of a better cell connection those users are seeking fast wireless data -- which they already know means Wi-Fi, not cellular.

"Offloading is the wrong assumption" of what is needed, says Evan Kaplan, CEO of iPass, which provides mobility services (including a large network of vetted Wi-Fi hot spots) to the enterprise market. "There's a generation of users coming up who are looking for Wi-Fi first -- that's the service they want."

Kaplan says that non-carrier Wi-Fi has made a sort of comeback. "Public Wi-Fi looked dead two years ago, but it's on fire now."

Still, in the quest to build out more Wi-Fi hot spots Kaplan, like others, notes that having fixed-line assets in the ground to bring fast Internet access around is a big factor in the favor of big wireline providers such as AT&T and Verizon, and cable companies.

And a big footprint also means that customers of big telcos or cable providers might be able to find authorized service in many locations; AT&T, for example, boasts of having more than 25,000 hot spots while five of the top U.S. cable carriers have signed an agreement to let their high-speed Internet customers tap into as many as 50,000 Wi-Fi hot spots. If carriers can keep their customers in the fold, they can keep them tethered to their long-term cellular or broadband and TV contracts -- with the "free" Wi-Fi thrown in as an incentive to stay. (See Cable Goes Big With Wi-Fi Roaming .)

How can the revolutionary network compete? Perhaps initially on price, through such vehicles as the Republic Wireless endeavor, whose unlimited $19-per-month access plan is made possible by using public Wi-Fi for most of the user's data connectivity. Further on down the road, there might be public wireless networks that far outperform even the carriers' own networks; the recent announcement of a plan backed by Google and Microsoft to use the so-called TV White Spaces to bring "super Wi-Fi" to college campus communities could serve as a model for other independent local wireless nets, especially those with independent gigabit networks in place. (See Startup Taps Devicescape for Wi-Fi-First Network and Vendors Intrigued by Gigabit Network Project.)

In the near term, there is likely going to be a wide mix of both big-carrier and small-business Wi-Fi available, with new competitive ideas (such as free Wi-Fi with a purchase in the store) keeping the pressure on to keep connection prices low. The keys will be to figure out ways to make it easier for users to find and connect to services, and to find business models that make sense for providers of every part of the total service equation. As the Stanford conference program noted, "the future of wireless innovation is here." Should be fun to watch.

Paul Kapustka is editor and founder of Mobile Sports Report, a new site dedicated to the intersection of mobile-social technologies and the sports industry.

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kaps 12/5/2012 | 5:26:55 PM
re: A Carrier Wi-Fi Competitor

I think the point Devicescape and others make is valid: the patchwork you refer to already eclipses what the big carriers can do on their own. If a business can see an advantage to offering Wi-Fi they'll do it themselves, instead of waiting for a carrier to come in. I don't think it will ever approach the ease of use and reliability of carrier services... but I would offer Skype vs. Cisco Videoscape as one place where the teeming-masses thing continues to win.


I also always thought Clearwire might end up powering a bunch of local hotspots... WiMAX or LTE to the hotspot, why not?

kaps 12/5/2012 | 5:26:55 PM
re: A Carrier Wi-Fi Competitor

I think the point Devicescape and others make is valid: the patchwork you refer to already eclipses what the big carriers can do on their own. If a business can see an advantage to offering Wi-Fi they'll do it themselves, instead of waiting for a carrier to come in. I don't think it will ever approach the ease of use and reliability of carrier services... but I would offer Skype vs. Cisco Videoscape as one place where the teeming-masses thing continues to win.


I also always thought Clearwire might end up powering a bunch of local hotspots... WiMAX or LTE to the hotspot, why not?

joset01 12/5/2012 | 5:27:09 PM
re: A Carrier Wi-Fi Competitor

Well yeah, although it's not like Wi-Fi stands still either. I'm sure collision detection and interference rejection will get smarter on Wi-Fi too. I recall when you used to be able to blast other, lesser users off the air with your pre-802.11n card (those were the days), networks have got smarter for sure.


 


It's more a question of wether phone and chip vendors will keep up with the IEEE work on Wi-Fi? Cos they're the bottleneck right now.


I still don't believe in this fantasyland of an alternative Wi-Fi-only carrier. People have been trying to sell that nonsense for years and years. Remember Cometa?


How do you get off the ground with something that is now basically seen as a free commodity like water from a drinking fountain? (It isn't actually free but neither is the water.)


Then how do you deal with issues like e911 or quality of service for calls? Wouldn't take much of a disaster to remind people why its useful to have a solid connection somewhere.


I think its much more likely that the carriers will eventually try to make money off Wi-Fi with quality of service layers and whatnot. They're the ones operating from a position of power here not some new entity trying to patchwork together a nationwide network of Wi-Fi.


 


 

joset01 12/5/2012 | 5:27:10 PM
re: A Carrier Wi-Fi Competitor

DM, I would argue we're a ways along that path already. Capped data plans are already forcing people to seek out Wi-Fi over cell connections. I'd say that to be on the safe side you want 4GB plan with LTE phones, so that's $70 a month from Verizon or AT&T. It's $100 or more for 10GB from either!


 


But I'd usually pick a Wi-Fi connection over LTE if its not a super-crowded area anyway. Since Wi-Fi is still generally faster.

joset01 12/5/2012 | 5:27:10 PM
re: A Carrier Wi-Fi Competitor

Sure, the latest Samsung stuff has 5GHz but many other brands including the iPhone don't support 5GHz. Without 5GHz support, the interference issue isn't going away in a crowded hotel or restaurant.

shygye75 12/5/2012 | 5:27:10 PM
re: A Carrier Wi-Fi Competitor

Right -- and as this moves along, 4G will get better and Wi-Fi will get more crowded. Those with the $$$ will take limos. The rest will ride the Bolt bus.

shygye75 12/5/2012 | 5:27:11 PM
re: A Carrier Wi-Fi Competitor

Doesn't this shape up to be a situation in which premium users with $$ will gravitate toward theoretically dedicated bandwidth from 4G, and the hoi polloi will battle one another for capacity at Wi-Fi hotspots? The sure winners in all this will be the companies that are backhauling all this traffic.

kaps 12/5/2012 | 5:27:12 PM
re: A Carrier Wi-Fi Competitor

Not sure I understand you here, Dan. Don't you think 5 GHz is already being designed into phones? Seems ludicrous not to.

kaps 12/5/2012 | 5:27:12 PM
re: A Carrier Wi-Fi Competitor

Not sure I understand you here, Dan. Don't you think 5 GHz is already being designed into phones? Seems ludicrous not to.

sleinen 12/5/2012 | 5:27:14 PM
re: A Carrier Wi-Fi Competitor

how many phones have 5GHz support for Wi-Fi? Certainly not the iPhone...


But all iPad models have, as well as many/most new laptops... and it's starting to appear in high-end phones such as the Galaxy Nexus, S II and S III.

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