Lately, the wireless ISP arena has been looking a lot like a graveyard. Companies such as Metricom and MobileStar had ambitious plans to bathe airports, cafes, hotels, and other public spaces in wireless Internet data. In recent months, however, over 20 Wi-Fi ISPs (AKA wISPs) have gone bankrupt.
So why in the world would 30-year-old Sky Dayton, the young gazillionaire co-founder of Earthlink Networks, enter this smoldering minefield littered with fresh corpses? How does he plan to steer his new wireless ISP, Boingo Wireless, around the hazards that took the lives of pioneering wireless ISPs?
Answer: by charging for Internet access without supplying the actual access. Instead, Boingo will supply an easy way for users to connect to any one of the thousands of existing wireless hot spots installed around the country.
Dayton believes companies such as the bankrupt MobileStar (which still provides over 500 Starbucks locations with wireless Internet service) stumbled because they couldn't sign up enough subscribers to offset the tremendous costs of installing thousands of wireless access points, along with all the costs of advertising, billing, and customer service that go along with running an Internet service. Dayton said Boingo Wireless wouldn't have that problem because it won't have to shell out money to build the infrastructure. Instead it'll win the game with a killer combination of software and schmoozing.
Boingo's plan is to make an offer that existing commercials wISP can't refuse: "You let our subscribers log on to the Internet through your hotspots, we'll provide the back-end software and client application that handles the user authentication, billing, and security. And we'll each take a cut of the subscriber fees we collect."
Strength in numbers
So far, Boingo Wireless, based in Santa Monica, California (close to the beaches where Dayton likes to surf), has aggregated close to 400 Wi-Fi hotspots owned by existing commercial wISPs, along with countless community based wireless freenets, to form what looks like a single seamless nationwide wISP. The service went live in January, giving subscribers one-click access to airports in Austin, Dallas, San Jose, and Seattle as well as hotels in the Four Seasons, Hilton, Marriott, Sheraton, Radisson, and Wyndham chains.
In six to eight weeks, Boingo will add about 200 additional networks, including airports in Atlanta, Chicago, Philadelphia, Baltimore, Washington, D.C., and Boston. Boingo estimates that it will have 5,000 hotspots by the end of the year.
The majority of Boingo's current hotspots come from Wayport, which provides wireless Internet service to several major hotel chains. Boingo's other partners include Surf and Sip, Pacific Direct Connect, Nomadix, RoomLinx, Air2Lan, and HereUAre. Boingo has not announced whether it will partner with MobileStar, which was recently purchased by cellular carrier VoiceStream.
By downloading the free Windows application from www.boingo.com, users can have access to these hundreds of hotspots owned by many different partners, but they only have to deal with a single account, and one monthly bill. To the Boingo user, it appears as though the entire wireless world belongs to Boingo.
And if things go as planned, it just might. Dayton and his co-founders certainly have a shot at making Boingo the world's biggest wireless ISP. Dayton used the same aggregation strategy when he started Earthlink back in 1993. Back then, thousands of regional ISPs offered Internet service, each requiring a unique setup procedure and local dial-up number. Dayton made deals with these mom and pop ISPs, slapping the Earthlink brand on the disparate services to form the first flat-rate ISP, offering all you can eat Internet for $19.95/month to customers in 100 cities.
In short order, Earthlink became the second-largest ISP in the world, with 5 million subscribers and $1.2 billion in sales last year. With numbers like this, it probably wasn't difficult for Dayton to raise $15 million from venture capitalists New Enterprise Associates and Evercore Ventures, and from wireless carrier Sprint PCS when Boingo launched in February 2001.
Keep it simple, smarty
Today, the 27 million laptop-toting business travelers who want to check their email on the road can either dial up their corporate server using their 56.6 kbps modem or hope that the hotel they check into has broadband access. A growing number of hotels and airports offer high speed Wi-Fi access, but users have to sign up using a different account for each one of them.
Boingo is hoping to simplify the experience for the business traveler by giving them one-click access to the Internet. When they open the Boingo application, it sniffs around the vicinity for available networks and displays them, along with their signal strengths. Click one, and you're on the Net, simple as that.
Of course, underneath this simple login experience, Boingo is dealing with authentication, security, and billing. Boingo also offers a Virtual Private Network service, as well as authenticated SMTP mail.
Participating service providers don't have to significantly change their systems to work with Boingo. They can continue to use their current authentication system, because Boingo's backend software knows how to log in to every system its partners use. That's important, because out of the thousands of Wi-Fi based networks installed around the world, very few are integrated with one another.
The user who travels from city to city, or even block to block, must keep a long list of account information for each network. Worse, users have to convince their managers that they need seven different wISP accounts just to check their e-mail when they're on the road. This is a hassle for users and bad news for regional wISPs, which have a hard time convincing users to sign up for service when they're unable to offer nationwide access.
Nevertheless, even if Boingo were able to aggregate every Wi-Fi hotspot in the United States, it still wouldn't be able to claim anything close to "nationwide access." There simply aren't enough Wi-Fi access points installed, and the range is limited to 300 feet. (Wi-Fi, AKA 802.11b, uses the same unlicensed spectrum that cordless phones use to transmit data at 11 megabits per second, or about 200 times as fast as a dial-up modem.)
That's where dual-band comes in. Handset manufacturers are making mobile devices that can use high-speed Wi-Fi networks when in range of a hotspot, switching over to mid-speed cellular networks when they leave the vicinity of a hotspot.
Boingo is concentrating on Windows laptops at this time, but you only need to look who is investing in Boingo to see which way the wind is blowing. Cellular operator Sprint PCS is one of the companies that seeded Boingo with its $15 million in startup capital.
Christian Gunning, Boingo's director of product management, agrees that the company's biggest challenge is "footprint," or the current level of Wi-Fi coverage across the country. He describes it as a classic "chicken and egg" problem. "There's a barrier to adoption," he says. "The network has to grow," before people are willing to buy Wi-Fi cards for their computers and pay a monthly fee to use a service like Boingo, but the wISPs have to be convinced that there will be enough users to justify the costs of building the infrastructure.
That's why Gunning is eager to point out that Boingo is focused on becoming "multiband beyond 802.11b," and plans to offer various cellular network connections along with Wi-Fi. The price of wireless freedom doesn't come cheap. Even though Boingo's footprint covers just a tiny fraction of the country, it believes it has enough coverage to attract the corporate business user, and is charging accordingly. The as-you-go plan costs $7.95 for a 24-hour-period in a single location. The pro plan offers 10 pay-per-plays a month for $24.95, with additional connections costing $4.95. The unlimited plan runs $74.95 per month for unlimited access.
Welcome to the neighborhood
When Boingo announced that it would let its users connect to wireless "freenets" or "neighborhood area networks" (NANs), many of the civic-minded individuals who wirelessly share their personal Internet connections became concerned.
According to Tim Pozar, a founder of the Bay Area Wireless Users Group in San Francisco, when Boingo launched, it listed NANs without asking their permission. Several NAN operators worried that Boingo would charge its customers to access NANs, which not only violated the spirit of freenets, but in many cases would also violate the terms of service the operators had made with their ISPs about promising not to resell their Internet service. In any case, it appears that the ruffled feathers have been smoothed out. Pozar says that Boingo's intention to offer NAN access is "probably a good thing" and that, "aggregating accounts on dissimilar networks is a good thing."
Adam Shand of Seattle Wireless, another NAN coalition, says "Boingo has been slowly and steadily courting us," since he met a Boingo representative at a wireless conference. "As of yet they haven't done anything irresponsible to the group that I represent (Personal Telco), but I suspect that's mostly due to clarity and vigilance on our part. They have significantly pissed off several other community networking groups though by taking silence as 'yes, it's okay to list our nodes.'"
Gunning counters that that Boingo had received at least "implicit" permission to use all the NANs it listed, and adds "we do not charge our customers anything when they connect to a freenet. You can use the free software to connect to your office, home, and community Wi-Fi networks without incurring any charges." He adds that Boingo is working hard to stay on good terms with freenetters. "We think freenets are great for Wi-Fi adoption.
Until the commercial networks reach critical mass and provide a more ubiquitous service, the freenets can help fill in the gaps and fuel the interest in wireless broadband access on a wider basis. Over time, some people will choose to use freenets almost exclusively - much the way some use free ISPs today - but people who require reliable, available connections will pay for commercial wireless broadband services like Boingo."
At least that's the plan.
Mark Frauenfelder is a writer and illustrator from Los Angeles.