Fixed Wireless Business

Boingo Recruiting For Wi-Fi Hotspots

EarthLink founder Sky Dalton says his company can make anyone a hotspot operator, and that ISPs will also gain when individuals own profitable hotspots.

by Michael Singer of siliconvalley.internet.com [December 6, 2002]

Unlike its past deals with FatPort and Wayport, Santa Monica, Calif.-based Boingo said it now has a way to let average people turn their broadband access points into a moneymaking opportunity using its aggregation software, creating a truly grassroots buildout.

Because of Wi-Fi's inherent low barrier to entry, a typical system could cost as little as $500 for Boingo's Colubris CN300—hotspot In A Box, not including Internet access. Boingo said its second-generation version is due out next year with a $300 price tag.

"It's like the early '90s all over again," said EarthLink founder and Boingo CEO Sky Dayton during his keynote address at the 802.11 Planet Fall 2002 Conference & Expo. "Hotspots are appearing worldwide. Grassroots organic growth and media attention have helped make the term "Wi-Fi" a household word. And justifiably, because Wi-Fi is the first revolution in Internet access since the commercial Internet launched."

Hotspots are Internet access points that use wireless technology known as 802.11 or Wi-Fi and are becoming popular in public places like airports, hotels and coffee shops. But Dayton predicts that the current 3,000 or so Wi-Fi areas in the United States could expand to millions of access points representing millions of potential users.

"The equation is number of Wi-Fi devices multiplied by the number of hotspots multiplied by market awareness—which we are creating—and you have traffic and revenue," said Dayton. "Currently, only a small number of people are making any money off of this and it will be some time before consolidation from larger players takes over."

However, he warns that the Wi-Fi industry is still in its earliest stages with many challenges and questions about its development. Dayton's prediction is that the industry must overcome challenges regarding roaming, ease of use, security, and user education before Wi-Fi can achieve its true potential.

"When we do, we'll quickly hit a tipping point that will make Wi-Fi ubiquitous," he said.

Part of Boingo's strategy includes its Hotspot In A Box platform, launched earlier this summer, as well as a Boingo Ready certification, recently awarded to products from Colubris, Nomadix, and Vernier Networks.

The company's plan is to drive additional foot traffic to hotspots. It pays access fees to the hotspot operator whenever members connect. Hotspot operators who install Boingo Ready devices can also receive cash bounties when new Boingo subscribers sign up for service in their hotspot. Boingo handles the provisioning, authentication, marketing, billing, and support costs for its members.

Dayton even suggested that Boingo's hotspot operators didn't have to use their own equipment, which he said would create some interesting partnerships between a shopkeeper with a T-1 line and a Wi-Fi savvy entrepreneur.

"We talked to a number of people about what they wanted in Internet access and they all said they wanted higher speed and wireless access," said Dayton. "In fact, our studies show 97 percent of business travelers will plan travel around high-speed access. That alone should be a wake up call to hotels and convention centers."

But if you think the ISPs like are crying foul over Boingo's middleman scheme, you'd only be half right.

Dayton says carriers barely object to the idea because they get a share of the profits too and the added value is that 802.11 technology will fuel more broadband access as well as upgrades from basic services to business class services complete with service level agreements and dedicated access.

—End