[Economist] PC Forum launches joltage, boingo, sputnik
Tue, 9 Apr 2002 13:53:52 -0700
An excellent overview of WiFi developments at PC Forum. These are
critical new proto-munchkin efforts; just add mesh routing and life
will begin to get quite interesting.
The future is a WiFi card duct taped to an iPod on the side of the road...
Making Wi-Fi pay
Apr 4th 2002
Will enthusiasm for wireless networking translate into profits?
AS WIRELESS operators around the world struggle with the transition
to "third-generation" (3G) cellular networks, another wireless
technology is taking off on its own. Wi-Fi, also known as 802.11b,
uses unlicensed radio spectrum to enable computers within a few
metres of a small base-station to share an Internet connection.
Unlike 3G, Wi-Fi is cheap, fast and works today. Base-stations are
popping up in homes, offices, airports and cafés, and Wi-Fi
capability is fast becoming a standard feature of laptops. In
America, the technology has inspired a mania unseen since the early
days of the Internet boom.
Attempts to build large-scale Wi-Fi networks so far have fallen into
two camps: top-down networks, built in the traditional way by network
operators who then charge fees for access, and bottom-up networks,
built by loose federations of enthusiasts who offer free access to
Neither approach is ideal, however. The problem with top-down
networks is that users will pay only to use a network with good
coverage, and the market is highly fragmented. Different airports and
hotels are served by different operators. No single operator provides
wide coverage, so Wi-Fi fans need multiple accounts and passwords to
The bottom-up approach has problems too. Enthusiasts are building
free networks in cities around the world. Stick a Wi-Fi antenna on
your roof, enter your location as a "hotspot" in an online Wi-Fi
directory, and passers-by can use your Internet connection. At PC
Forum, a recent industry conference, Cory Doctorow, a Wi-Fi
enthusiast who lives near Silicon Valley's Highway 101, reported a
regular stream of cars pulling up outside his house as itinerant
workers stop to check their e-mail. But this co-operative approach
tends to break down when a technology goes mainstream. Make a free
network available to everyone, and some people will abuse it to hog
bandwidth or send junk e-mail.
If neither top-down nor bottom-up is the right approach, then what
is? Boingo Wireless, a Wi-Fi start-up, hopes to get the market moving
by acting as an aggregator. Its log-on and authentication software
provides a wrapper around existing operators' networks, so that users
can access all of them using a single account; subscription revenue
is split with network operators. So far, Boingo's aggregated network
covers ten airports, 400 hotels and 100 cafés in the United States.
This is clever, but the approach taken by Joltage, another Wi-Fi
start-up, is cleverer still. Its aim is to increase the number of
Wi-Fi hotspots by providing a commercial incentive for people to set
up new ones. Joltage's free software turns any Internet-connected PC
with a Wi-Fi capability into a hotspot on the Joltage network.
Subscribers can use any Joltage hotspot, and their subscription fees
are shared with the owners of the hotspots they use. This provides an
easy way for a café, hotel, airport or railway station to set up as a
commercial Wi-Fi operator-provided Joltage can achieve critical mass.
Sputnik, another Wi-Fi firm, has also produced free software that
turns PCs into Wi-Fi hotspots. But Sputnik's approach is closer to
that of the free Wi-Fi enthusiasts than Joltage's. Anyone who sets up
a Sputnik hotspot gets free use of the entire Sputnik network; no
money changes hands. The company plans to make money by charging for
a high-security corporate version of its software.
So is the stage set for a repeat of the boom in fixed-line Internet
access? Not quite. One problem is that Wi-Fi networks rely on
existing high-speed fixed connections to the Internet. Wi-Fi's future
thus depends on cheap, ubiquitous broadband, which has yet to
materialise. Furthermore, sharing a connection is frowned upon by
broadband-service providers, though some providers are thinking of
introducing pricing plans that explicitly allow connection-sharing
over Wi-Fi. Another problem is that commercial use of unlicensed
spectrum is prohibited in some countries.
Although zealots like to think Wi-Fi will kill 3G, it seems more
likely that Wi-Fi and cellular networks will work together.
Forthcoming plug-in cards for laptops can use Wi-Fi if it is
available, and fall back to a slower cellular connection if not.
MobileStar, a Wi-Fi operator, was recently taken over by VoiceStream,
a cellular operator, which plans to offer just such an integrated
service. Evidently Wi-Fi, like the Internet before it, has begun to
change from a hobbyist's toy into a grown-up industry.