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Hot Spots: Part Deux

Okay, you have 25,000 or so wireless LAN access points ready to roll, now where do you put them?

This is one of the interesting problems facing Cometa Networks, the 802.11 venture formed by AT&T Corp. (NYSE: T), IBM Global Services, and Intel Corp. (Nasdaq: INTC) on Thursday. Can they get hotspots into the right spots?

The company says it wants to start by putting hotspots in hotels, airports, cafes, restaurants, and stores in the largest cities in the U.S., offering services in 2003 (see Rainbow Unveiled). Cometa's president and CEO Larry Brilliant says the company's eventual aim is to ensure that anyone in a major metropolitan area would never be more than five minutes walk away from a source of wireless Internet connectivity.

However, Brilliant also says that the company's initial market will be among business people. The company plans to sell wholesale access to its network to carriers, ISPs, cable companies, and other service providers, which will, in turn, offer Internet access with additional services such as wireless VPNs.

But if you want to target business people there are only so many places you can put your hotspots. "There just aren't that many places where a significant number of us gather," comments Doug Klein, CEO of wireless LAN security startup Vernier Networks Inc.. The places business people congregate are -- of course -- (say it with Doug now) – "airports, hotels, and conference centers."

This means Cometa should be competing against smaller but more established players like Wayport Inc. to win business right now -- if they are to launch a service next year. However, Klein says they are not on his radar.

"They must have some target areas, but we have not seen them anywhere, and we get requests for equipment all the time from the hotel guys," he says. "It seems like the window of opportunity is closing for them there." Cometa will be competing with larger companies like Hewlett-Packard Co. (NYSE: HPQ) for lucrative, but hard to win, airport contracts, Klein points out. However, IDC's Keith Waryas reckons the sheer "muscle" behind the new venture may help it win some of these deals.

One of the ways that Cometa could get into these markets quickly is by signing deals with WLAN aggregators like Boingo Wireless Inc., GRIC Communications Inc., and iPass Inc. These companies don't build their own sites but sign up existing hotspots to build out their networks and often offer software that "sniffs out" other access points that a user can roam on.

Boingo spokesperson Christian Gunning confirms that the company has already been talking to Cometa. "We've been actively talking to Cometa's founders, and they've shared a strategy of an open network approach for service providers," he tells Unstrung.

"I wouldn't be surprised if iPass has a deal with Cometa already," says Waryas. Mark Christensen, one of the Intel folk connected with Cometa, has a seat on iPass's board, he points out. IPass could also bring some roaming and security software to the table, he says. IPass had not returned our calls by press time about this issue.

Indeed, roaming capabilities are really going to be the only way that Cometa can provide the coverage that it is talking about. "20,000 access points sounds like a big number until you realize that it takes between 1,000 and 2,000 to cover a decent-sized college campus," comments Seamus McAteer, principal analyst at Zelos Group LLC.

The analogy I've seen is they are working toward a five minute walk in metro areas or a five minute drive in suburban areas for the 50 largest markets," says Boingo's Gunning. "There are more than a million potential hotspots in the U.S. -- 50,000 is five percent of that.

"Even if they get a network that is separated by their proposed metrics, the growth of the market is such that there will likely be someone else's hotspot 30 seconds away. Roaming is going to continue to be a meaningful part of the WiFi service equation from a customer perspective. As this proliferates, users won't want to have to go where the WiFi is -- they'll want to use the WiFi that's available where they are. The only way to do that is through roaming."

— Dan Jones, Senior Editor, Unstrung www.unstrung.com
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