Verizon Pours Cold Water on Wireless Hotspots

Verizon says it will decommission the 380 free Wi-Fi hotspots in New York City it turned up for its DSL customers two years ago.

The carrier said usage was low--fewer than half were generating more than 80 percent of the traffic.

"Usage didn't live up to our expectations," a Verizon spokesperson says. "Customers didn't take advantage of it."

Verizon will instead steer mobile business customers to its cellular EV-DO BroadbandAccess service, which costs $80 per month. All hotspots will be shut down in two months.

Verizon initially planned to run up 1000 hotspots in New York by the end of 2003. The carrier says its plans have nothing to do with Philadelphia and other municipalities planning to turn up their own Wi-Fi services for residents and businesses.

"It's a business decision based on the network not having lived up to our usage expectations," the spokesperson says.

City-Wide Service

Philadelphia plans to run up low-cost city-wide Wi-Fi access in June. Verizon initially fought the city's effort but Verizon and Philadelphia eventually came to an agreement that allows the city to move ahead.

With up to 54 megabit per second speeds within a 300-foot radius, Wi-Fi is considered by some to be an attractive network access offering for mobile business users in hotels, airports, restaurants, and on busy street corners. The business model for Wi-Fi hotspots has been elusive, however, as potential users may be turned off by the pricing structure for access as well as spotty coverage and limited roaming.

Wi-Fi pioneer Cometa shut down last year after failing to garner support from carriers to fund its hotspot rollout. But some carriers continue to forge ahead on expansive Wi-Fi coverage.

Sprint, for example, recently announced that it added 5000 hotspots over the past month to 19,000. The carrier plans to have 25,000 hotspots for its Sprint PCS customers by year-end.

Also, SBC this week unveiled a mobile VPN service for business customers that allows them to access a corporate VPN from 7000 SBC hotspots or from a Cingular Wireless cellular service.

Meanwhile, AT&T says it has just over 9000 Wi-Fi hotspots and MCI says it has just over 5000.