Public Wi-Fi Takes Shape

Public wireless LANs, or hot spots, have yet to coalesce into a marketplace, partly because market requirements are still in flux. But changes witnessed in 2003 suggest what the market will eventually look like and what opportunities it will offer for enterprise road warriors, says Gary Weis, president and CEO of Cometa Networks, speaking Wednesday at the Next Generation Networks conference in Boston.

Cometa was created 11 months ago by Intel, AT&T, and IBM to build and run hot spots--in restaurants, coffee shops, office buildings, and golf courses--so that its carrier and service provider customers could use them to offer WLAN services to site visitors and site owners. In September, Cometa launched its first hot spot project in Seattle, where it plans to roll out a total of 250 hot spots by year's end at McDonald's restaurants, Barnes & Noble bookshops, and other locations.

Cometa has been adapting to a market that is still in development. The original plan was for Cometa to work with service providers that would market WLAN services directly to enterprises, creating corporation-wide contracts similar to those for voice and data services. But when Weis become Cometa's first permanent chief executive seven months ago, he realized that an "enterprise sale" would be lengthy and complicated.

Plus, for now, it's unnecessary. According to Weis, current hot spot customers are "individual users" who use a credit card to pay weekly or monthly for WLAN service. Most of these customers seem to be corporate employees using the hot spots for broadband access, secured by a virtual private network, to applications and data on a corporate network. They file the carrier charges in regular corporate expense accounts.

Reminiscent of Cellular

That's the same model of usage Weis saw when he arrived at IBM several years ago, just as cellular phones were taking hold among corporate employees. Eventually, users and corporate bean counters began demanding service improvements, better pricing, corporate customer support and other hallmarks of enterprise contracts with suppliers such as carriers. Weis says that he expects the same thing to happen with carrier-based hot spot services.

"Enterprise users won't tolerate the chaos of trying to find free hot spot sites," he says. That's because these users are working with mission-critical applications that require reliable and secure broadband connections.

Weis predicts that the hot spot will actually be many markets, reflecting the varied motivations of end users, service providers, and venue owners. Some hot spots will be entirely free, but with minimal quality-of-service guarantees or security. These may be as simple as an access point linked to an available on-site DSL connection.

Others will be offered as a customer benefit, but one from which the venue owner expects to receive revenue, either through a user fee or via a revenue-sharing arrangement. Weis says that a class of integrators is emerging to handle these.

In still other cases, venue owners will want carriers or other service providers to be involved to handle billing and customer support, to amortize costs over a large customer base, to manage the security issues, and to support future wireless data services. Typically, these companies will also rely on the WLAN infrastructure to facilitate other services to customers and employees at the site. Weis cited McDonald's, an early Cometa partner. McDonald's sees WLANs as a step toward a fully digital retail environment, including such functions as cashless transactions, wireless kiosks with content and services, online employee training, and sales data reporting.

Easing Mobility

Cometa is sidestepping a problem that has hampered nationwide hot spot usage: the lack of roaming agreements between carriers. Cometa deploys hot spots citywide, serving users who move within that area and avoiding the need to negotiate roaming agreements among multiple carriers, as is the case in the cell phone market. Weis predicts that easier roaming will eventually become a reality for users moving between cities--but not soon.

To ensure Cometa's success, Weis is balancing deployment costs against revenue growth. His goal is to minimize and control the costs of hot spot design, deployment, and maintenance. One major cost is backhaul--linking a hot spot to AT&T's Internet Protocol backbone. Cometa uses DSL where it's available, and T-1 or higher connections otherwise.

Weis has been following the Institute of Electrical and Electronics Engineers 802.16a standard, which specifies high-bandwidth wireless connectivity over miles instead of meters. The reason: it promises to be a cost-effective way to daisy-chain hot spot sites together, funneling traffic into a distant point of presence, and eliminating the need to rely on incumbent local exchange carriers for expensive T-1 lines to venues.

"For our narrowly focused need, 802.16a offers us a lot of cost-management benefits," he says.