Tuesday, May 18, 2004


AT&T does it again, folks

AT&T, has extended its amazing, unprecedented, unbroken two-decade long string of "every business initiative we touch turns to sh*t." WiFi Networking News reports that Cometa Networks, the paid WiFi hotspot venture of AT&T, Intel and IBM, is shutting down tomorrow.

Maybe there's deeper import here. Hopefully, it is the beginning of the end of pay for hotspot service. Certainly, I have found that the biggest problem in using a pay-per-hotspot service has been in the paying. I've had problems with Wayport, T-Mobile and every other paid hotspot I've ever used -- with the exception of hotel hotspots. It seems there's always a problem with the registration or the payment. I've never even used a free coupon successfully. In one case, I spent the better part of two days (don't ask) in the San Jose American Airlines Aadmiral's Club talking to T-Mobile customer service on my cell phone -- and they charged me for the privilege, even though I never connected.

In sharp contrast, at the Continental Airlines club WiFi is free -- I tune in, turn on, and catch my flight every time.

You know the truism that the most expensive part of running a phone network is doing the billing? Corollary: the hardest part of using a WiFi hotspot is paying.

David- my alma mater, Dartmouth College, represents that truism as they have found that billing for long-distance was costing more than the profits from the service itself.

So they launched a free voip service, gave clients and headsets to all incoming first-year students, and they added capacity to the wireless network as well. So now any student with a notebook pc, which is just about every student, calls anywhere in the US for free (well, you gotta factor in the cost of tuition, which ain't free ;)
Hello David,

Can you please clarify where the cash comes from to do the buildout of an "unbilled" WiFi? Is it entirely funded from ancillary services? Have you or anyone else actually crunched the numbers to confirm that hotspots can be supported in this manner?

Douglass Turner

Let me make two related points:

#1. You can come over and use the hotspot in my house anytime. It costs me $40/month whether you use it or not, and I'd rather have your valuable good will than $10 of your hard-earned money (and risk the possibility that you won't use it cause it is priced too high, and as a result you will have bad will towards me).

#2. Consider the cost of running a public bathroom. The initial capex is about 100 times the cost of a hotspot ($5000 v $50), and unlike the hotspot, there are significant usage sensitive costs -- water, paper, electricity, cleaning.

Where does the cash comes from to do an "unbilled" bathroom? Have you or anyone else actually crunched the numbers to confirm that bathrooms can be supported in this manner?

Let's say that it costs ten times more to run a bathroom than a WiFi hotspot. Shouldn't we charge people $100 per 24-hour period for this "privilege"?
The bathroom scenario is brilliant, i cant believe you are a liberal!KUTOS
What does it cost to set up a HOTSPOT at a fsat food joint or any other place that has a dsl line or a cable connection? It shouldnt be anymore than a home, unless you get complicated with billing and security......but if it is free why do you need security....you get customer loyalty instead......MICKY D's on the wrong track
Cometa's demise isn't the end of for-pay Wireless HotSpots. It's the end of a company that was clueless in too many ways.

What's really needed in the Wireless HotSpot industry is 1) Roaming - pay for a subscription and use anywhere, and 2) a combination of free, but limited service and for-pay, but unlimited service. Most of the time people dont' WANT that much service, and they're happy with, say, 2x dialup speeds, or "only" an hour of service, or no QOS.

Conversely, business and enterprise types ARE willing to pay - the rising success of Wayport and iPass is ample evidence of this. They're willing to pay in order to receive "full speed", "no time limits", technical support when needed, Port 25 (SMTP) not being blocked, worms being blocked, etc. But they're not willing to pay EVERYWHERE, and be nickel-and-dimed.

SOMEONE is going to figure this out and make an absolute MINT of money.

Steve Stroh
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