Wi-Fi Still Stumping Telecoms

ASPEN, COLORADO -- While top telecommunications executives talked at an annual free-market conference about delivering Wi-Fi without a business model, Wi-Fi entrepreneur Jim Selby and his Aspen Wireless crew were outside the room selling Wi-Fi cards to conference goers.

Those with Wi-Fi had Internet access from within the bunker-like conference room while BlackBerries were silenced.

All the telecommunications players agree that customers want Wi-Fi -- and they're all willing to provide it. The difference is, Selby believes he can make money offering Wi-Fi now, using fixed wireless service as a base, while Verizon Wireless, Qwest Communications, and SBC Communications are searching for a model that makes sense.

In the meantime, the relatively inexpensive cost of rolling out Wi-Fi allows the larger companies to experiment without a lot of risk. FCC Commissioner Kathleen Abernathy, a Republican who comes from the telecommunications industry, says the chance for businesses of all sizes to get involved shows the beauty of Wi-Fi and the unlicensed spectrum.

"Unlike the licensed spectrum where if you're going to make a major investment you better have a well-thought-out business plan of what products you're going to roll out that consumers will purchase and value," said Abernathy, "the beauty of the unlicensed spectrum is if you have a pretty modest business plan you can get that technology and say, 'I'm going to roll this out and see if I get a bite.' They basically try it on and see if one fits."

Using wireless to cover the last mile allows competitors to bypass the local wired-line provider. "They know there's a value plan there with Wi-Fi either with data or content or even the last mile to the home," Abernathy said.

Wireless provider T-Mobile USA jumped into the deep end of the Wi-Fi pool last year with the launch of its T-Mobile Hot Spot service. Customers at T-Mobile venues like Starbucks, Borders, and American Airlines Admirals Clubs can pay per use or get unlimited-use subscriptions for monthly rates as high as $39.95.

Intel's high-profile marketing campaign for its Wi-Fi-enabled Centrino, a flood of easy-to-install home-networking Wi-Fi products, and the continued expansion of broadband availability have combined to create an aura of expectation when it comes to Wi-Fi access.

"It's an opportunity and we need to be there supporting what the customers want," Qwest chairman and CEO Richard Notebaert said during a panel discussion this week at the Progress & Freedom Foundation Aspen Summit. Notebaert said he counts himself as one of the home-networking customers who want Wi-Fi. 

"The challenge some of us have with Wi-Fi is to do it in a metropolitan area it's still hard for us to see the economic model," he said. "If customers want it, we'll do it."