Yet Another (Bad) Wi-Fi Business Model
By Carlo Longino, Fri Jan 09 22:00:00 GMT 2004

Tech pundit Robert Cringely has come up with yet another plan to make money from Wi-Fi hotspots. The only problem is this one won't work either.

Cringely holds that revenue sharing in aggregation isn't the best way forward, and he's right on that account. There are too many fingers in too small a pie. So he suggests a novel idea to quickly build a huge network of hotspots: give away the necessary hardware to anybody that wants it so they can set up a hotspot to share their Net connection. In exchange for running a hotspot and growing the network, they'd get free access to all the other hotspots in the network.

So, for instance, I could get their access point and connect it to my cable modem here at home. I'd continue to pay my $50 a month to the cable company, and now my connection would be open as a part of what Cringely calls the "WhyFi" network. Anybody within range could access it, but they'd have to pay for access, unless they too run a hotspot. Cringely believes the network could quickly grow to 1 million hotspots, 30 million paid users, and piles of profits.

Let's just say I'm skeptical at best. I don't see how letting anybody set up a hotspot pretty much anywhere they want to build a network is going to pay for all those APs. Cringely glosses over the fact that most ISPs expressly forbid connection-sharing, and doesn't seem to have considered quality of service either.

Companies like Wayport and to a lesser extent T-Mobile have taken the hotspot business model as far as it's going to go -- there's a limited number of places where charging for access is viable, and that number's shrinking as more and more businesses look to Wi-Fi not to generate usage fees, but to attract and retain customers.