Cablevision, Time Warner Cable, Comcast Federate New York Hotspots

Federation nearly always is good for widespread adoption of any application. Email and text messaging provide recent examples, as usage exploded once messages were made interoperable. But one can point to any number of other examples, including railroad, telegraph and telephone services, each of which benefitted from interoperability.

A positive usage effect likely will happen for cable public hotspot users as Cablevision Systems Corp., Time Warner Cable Inc. and Comcast Corp. have agreed to allow their broadband Internet subscribers to roam freely across the Wi-Fi deployments of all three major cable operators in the New York metro area.

The agreement will allow customers of those companies to use Wi-Fi for no additional charge in places like Madison Square Park in Manhattan, areas of the Jersey Shore and the Hamptons on Long Island.

In key ways, the agreement attempts to keep pace with public hotspot access offered by Verizon Communications and AT&T. The issue isn't so much the public hotspot access as such, but the fact that cable modem, DSL and wireless dongle services now typically come with "no additional charge" Wi-Fi hotspot access. So any provider that can offer free Wi-Fi at more locations has an advantage retaining and acquiring fixed broadband access customers.

Public Wi-Fi: Smartphones Driving Usage

Originally envisioned as a for-fee service used by users who wanted Internet access for their notebooks, public Wi-Fi hotspots increasingly are used by smartphone users.

As a percentage of total sessions, handheld access increased from 20 percent in 2008 to 35 percent in 2009, according to In-Stat.. By 2011 handhelds are anticipated to account for half of hotspot connections.

There are lots of reasons for the trend. The number of devices equipped with Wi-Fi capability is growing fast. In-Stat estimates that, from 2007 to 2008, Wi-Fi-equipped device sales inreased more than 50 percent. Service providers also are encouring users by offering Wi-Fi hotspot access as an amenity to their fixed broadband, smartphone or PC card customers.

More devices able to use Wi-Fi, plus a "no incremental cost" charging model are boosting activity. The other development is use of devices other than PCs and phones that can use Wi-Fi. The Apple iPod "touch" is perhaps the best example, but In-Stat points out that shipments of Wi-Fi-enabled entertainment devices, such as cameras, gaming devices, and personal media players, will increase from 108.8 million in 2009 to 177.3 million in 2013.

No Bidders Left for Chicago Wi-Fi

Chicago has failed to reach agreement with either at&t or EarthLink, each of which had proposed building a municipal Wi-Fi network for the city. Just a few years ago, backers were arguing a business case could be made for either ad-supported free service or for-fee service at rates of $20 a month. But that was before U.S. telephone companies got serious about broadband pricing and dropped access costs behow $20 for service very comparable to what muni Wi-Fi networks were supposed to offer.

at&t charges $20 a month for speeds of 1.5 megabits a second in Chicago and will provide connections half that fast for $10 to new subscribers. In other cities such as Houston, an 800 kbps connection can be purchased for about $15 a month.

In Lompoc, Calif., the city signed up fewer than 500 users out of a population of more than 40,000.

So it looks like we are nearing the end of the muni Wi-Fi craze. Though some networks, primarily for public safety and municipal operations, might still be viable, it doesn't appear that most municipal Wi-Fi networks will prove commercially viable outside high-density urban cores.

And even there, how hard is it to find a T-Mobile hotspot at a Starbucks?