It’s hot and it’s happening. Wi-Fi hotspots are springing up like weeds and the unwired Internet is stretching even to the skies. Some say it’s spreading swifter than reason, but in a business sense Wi-Fi is playing to two distinctly different markets.
Cities are wheeling multimillion-dollar deals around wireless mesh networks to support municipal Wi-Fi that offers public access either for free or at reduced cost. Small businesses on every other corner are installing their own hotspots in almost every city, most offering free access as a value-add to attract new customers. Cable carriers and telecom companies are scratching their heads.
From his office in downtown Ottawa, Bill St. Arnaud points out about 30 hotspots in the vicinity of his street corner.
“Coffee shops have them, book stores have them. Just about everybody and his dog has a little public Wi-Fi set-up here.
“And then you also get the City of Ottawa’s signals. Ottawa Telecom put up a number of Wi-Fi nodes in the downtown core, but there wasn’t really much take-up and it’s just sort of been left there now,” says St. Arnaud, CANARIE Inc.’s senior director of advanced networks.
CANARIE operates Canada’s advanced CA*net4 Internet backbone, which provides gigabit-per-second optical connections.
Crunch time for municipal Wi-Fi
Industry watchers and technology service providers say 2006 will be the year that either makes or breaks municipal Wi-Fi. Philadelphia has signed Earthlink to erect a wireless LAN that covers 350 square kilometres and Google is bidding to build a municipal Wi-Fi mesh across San Francisco.
In Canada, much smaller municipal-type Wi-Fi has been deployed across sections of downtown Ottawa and in Fredericton, N.B, for example. Toronto meanwhile has acquired David Dobbin, former chief operating officer for Telecom Ottawa and now president of Toronto Hydro Telecom.
The new utility telecom companies are causing consternation for traditional telecom service providers like Rogers, Bell and Telus, according to Iain Grant, managing director of research and consulting firm the SeaBoard Group in Montreal.
Grant believes the advent of municipal Wi-Fi will propel a lot more changes in what cable companies and telephone companies offer.
“Telephone and cable companies used to think the battle lines were clearly drawn, but the fact that somebody else can now horn in on the network business is creating some gnashing of teeth in the boardrooms,” says Grant.
“Municipal Wi-Fi will encourage the cable and telephone companies to spruce up their offerings. Both the telephone and cable companies who saw this business as their birthright are a little bemused by this new trend. Their challenge is to differentiate their product.”
However, municipal Wi-Fi will be based on a free-for-all model versus a QoS (quality of service) model and enterprises shouldn’t be relying on any public-access networks for their Wi-Fi backbone.
Grant says there are two clear markets for small businesses and the public as well as for enterprise businesses. “This is where the cellular umbrella coverage, which is far more ubiquitous than anything you could ever do with Wi-Fi, becomes important.
“Municipal Wi-Fi in downtown Ottawa doesn’t really scratch the edge,” says Grant.
The lack of security in municipal Wi-Fi also makes the network more of a consumer-grade service and enterprises should be discouraging their employees from using it for business purposes, says Grant.
St. Arnaud does not see how municipal Wi-Fi can compete against all the coffee shops, bookstores, department stores and fast-food outlets providing free Wi-Fi. He says the costs of implementing a wireless mesh network are also significantly higher than originally anticipated.
“There’s some reality coming into play,” says St. Arnaud. “They’re trying to build a city-wide service, but they’re competing against both cable and telephone companies which have much better infrastructure.”
St. Arnaud says municipal Wi-Fi makes sense only if a city can convince a private sector company to build the network and provide the service at no cost to the city.
With municipal Wi-Fi, the antennae will likely be set up on street lamps and telephones poles, and the signal won’t be strong enough to penetrate buildings. Wi-Fi is good for 50 metres under ideal conditions, and more practically only 15 metres or less, says St. Arnaud. “And getting the signal from the antennae back to the service provider’s backbone, and then aggregating this across the entire city becomes a very complex engineering exercise.”
Municipal leaders should be wary of the bigger business picture of providing public Wi-Fi access, says David Robinson, vice-president of business implementation for Rogers Communications Inc.
There’s a lot to a business beyond the technology, he says. “The technology is in place, but where is the billing system, the customer service and technical support, the network operations centre, and who’s running the logistics?”
Robinson says municipal Wi-Fi is shaky ground. “Wi-Fi is all on the 2.4MHz spectrum and it’s all licence-exempt, so everyone can use the channels available. Is it still going to work when there are even more home base stations and more microwaves causing interference?”
Private sector options
Rogers is focused instead on what Robinson calls hybrid Wi-Fi locations, used for both private and public access, such as a shopping mall.
The business model is similar to that deployed within an airport, where the public can sign on to their service provider account for access to the Internet. The airport authorities and retailers use the same physical infrastructure for their kiosks, security cameras, and baggage-handling applications.
Bell Mobility Inc. and Telus Corp. for example provide Wi-Fi coverage at Montreal and Vancouver Airports respectively, as part of the Canadian Hotspot Roaming Alliance.
The Alliance links more than 1,100 Rogers, Bell and Telus hotspots — with the carriers sharing their network resources — at locations such as coffee shops, golf courses, hotels and conference centres.
The trick in Wi-Fi is not creating a hotspot, but supporting the service levels behind the network, says Peter Winn, associate director of corporate development for Bell Mobility.
“Anybody can set up a hotspot, but the service providers in the Alliance have to meet minimum bandwidth requirements. If a hotspot becomes overloaded, we have to expand the number of trunk lines going into the equipment to increase the bandwidth.”
Winn says the Alliance is committed to guaranteeing throughput by 24×7 monitoring of its base station performance, cell towers, switching equipment and the amount of traffic, via its Network Operations Centre.
On the enterprise side, users are more interested in deploying Wi-Fi to access business applications wirelessly via the company’s intranet, rather than for Internet connectivity.
According to Andrew Mitchell, director of wireless solutions for Bell Canada Inc., the latest 802.11 technology is driving the adoption of Wi-Fi to support voice over IP.
“Enterprise customers today don’t put wireless LANs in just for the sake of providing wireless connectivity for PC users,” says Mitchell. “The drivers now are the applications, and voice is certainly a predominant application.”
Bell is also exploring more opportunities of building out its new distributed network antennae — which beam both Wi-Fi and cellular signals — across more densely populated locations, such as an office campus or a shopping mall.