Public Access Broadband

Is it too late to get into the wireless public access game? Probably. But that shouldn't stop wired ISP owners from courting wire-free operators. After all, the only thing you have to lose is customers.

by Gerry Blackwell
[November 28,2000]

It might not happen tomorrow or even the next day, but one day in the not too distant future, one of your road warrior customers is going to ask if you can provide broadband access while he's in transit. What will you say?

That's MPU to you
A new report from Scottsdale AZ-based Internet research company Cahners In-Stat Group, says broadband Internet access in what's been dubbed the Multi-Public Unit (MPU) market - airports, hotels, convention centers, etc. - is about to take off as customers begin to demand broadband access when they travel.

Service providers will satisfy that demand through 2.4 GHz wireless LAN connections and in some cases wired kiosks with Ethernet outlets with complete broadband-connected PCs. Amy Helland, In-Stat analyst, predicts that the MPU services and equipment market will skyrocket from $848,000 this year to $1.2 billion in 2004.

"We think wireless will be dominant certainly in the airport space," Helland said. "Wireless really fits in with the business traveler's needs, with its convenience and flexibility."

Living lineless
Customers carrying laptop computers equipped with wireless LAN PC cards adhering to IEEE 802.11 or 802.11b (Wi-Fi) standards will be able to launch a program and connect to an 11-Mb network if they're within 300 feet or so of one of the service provider's wireless access points.

Principal wireless network equipment vendors include Proxim with its ORiNOCO line, Nokia with its Public Access Zone Solution, and Cisco with the recently announced Internet Mobile Office initiative. The Cisco offering includes both wired and Aironet-based wireless solutions.

All of the wireless network equipment is 802.11- or 802.11b- based and will theoretically interwork to some extent. Many additional vendors offer just the Wi-Fi PC LAN cards.

Pilot programs
A few pioneers are already offering service in public facilities across the U.S., mostly in airline frequent flier club lounges and chain hotels. They include Richardson TX-based MobileStar Network Corp., Aerzone, a subsidiary of San Francisco-based SoftNet Systems Inc., and Wayport Inc. of Austin TX.

Helland says each of the three pioneering service providers has installations numbering in the low teens, but at least one, MobileStar, claims to have many more, over 100 separate locations.

Away from home companions One principal strategy for service providers is to seek partnerships with airlines and hotel and restaurant chains. MobileStar, for example, has an apparently exclusive alliance with American Airlines, which it announced in May. Under the terms of the agreement, American is providing MobileStar network access to 32 Admiral's Clubs in the U.S. Another 17 locations in Europe and Asia will be added by year-end. Eventually companies like MobileStar will reach customers in gate areas at airports as well, Helland says.

MobileStar also has an indirect agreement that gives it access to hotel rooms owned by Sunburst Hospitality Corp., as well as deals with dozens of other independent hotels.

Aerzone, meanwhile, announced strategic alliances with Delta Air Lines in April, and with United Air Lines in October. According to Helland both airlines have taken minority equity positions in Aerzone, so the assumption is that these will be exclusive arrangements.

The United agreement gives Aerzone access to United terminals, gates, Red Carpet Clubs, First Class Lounges, and 1K Rooms throughout North America and in "selected international locations." Delta will initially provide access to its Crown Room Clubs.

Wayport has concentrated more on hotels and claims to have over 600 contracted or deployed, including premier properties such as the Four Seasons Hotel New York in mid-town Manhattan and the Ritz-Carlton in Chicago. Most of its planned deployments are in Four Seasons and Regent hotels.

The company is also in a few airports, including Dallas-Fort Worth, where it provides wireless access in public areas. It says it will be in five airports altogether by the end of this year.

Supporting role
So what can traditional wireline ISPs do with this? Helland says ISPs could have a role to play in developing the market. Some of the bigger ones certainly have the capital structure to do the kinds of massive deployments necessary, she points out.

"But there's a lot more red tape for them to pass through to enter new markets in this space," Helland adds. "And ISPs have tended to be slower to react to the opportunity."

Furthermore, the fact that Aerzone, MobileStar and Wayport have already locked up three of the top airlines and hundreds of hotels is another barrier to entry for newcomers - though there are still airlines worth partnering with and lots of hotels.

Going head-to-head with the Aerzones and MobileStars remains an outside possibility, but partnering with them looks like a much better one.

While these companies are ISPs in their own right, have their own POPs and don't need traditional ISPs to terminate traffic, they may need help marketing to prospective customers.

Most of their prospective customers, after all, are already customers of yours. And from your perspective, being able to extend roaming services to in-transit locations makes sense.

The pioneers may be receptive to the idea. Aerzone parent SoftNet already sells to ISPs in one of its other business units - Intellicom, a satellite datacomm service provider.

MobileStar vice president of marketing Pam Roberts said partnering with wireline ISPs is something her company will consider. "At this point we're open to the idea," Roberts said.

While she talks about "natural synergy" with wireline ISPs and the logic of offering bundled services, partnering up with wireline ISPs doesn't sound like a top priority right now. But it might be worthwhile for ISPs to take action and force the issue.

The MPU market is going to be significant. If you operate a business-to-business ISP, a significant proportion of your customers are going to want these services eventually. And if they can get them bundled with wireline services from somebody else, they probably will.

— End

     

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