TechDirt’s Mike Masnick says it’s been six years since he got into a bit of a debate about whether or not there was a real business model for fee-based WiFi. He didn’t think fee-based WiFi would last, despite some well-funded networks linking paid WiFi access points.
It goes back to simple economics: in a competitive situation, price will get forced down to marginal cost – and the marginal cost of letting another person get on your WiFi network is zero.
So, if your WiFi is seen in competition with an equal (in the mind of the customer) WiFi access point, the price will eventually get driven to zero. Also, if there’s no equal WiFi offering currently in competition with you, you’d also better be sure there won’t be in the future. So, if you’re JimmyBob’s coffee shop and you want to charge, realize that BillieSue’s laundromat across the street may set up free WiFi, and your plans to charge will disappear.
Glenn Fleishman once famously said; Free Wi-Fi from Starbucks? Ha! Ain’t. Gunna. Happen.
- Starbucks began free Wi-Fi access over a year ago. It’s available to customers who purchase a minimum $5 reloadable Starbucks Card, and use the card at least once a month. Users get two free hours daily.
- AT&T offers free Wi-Fi at Starbucks if you subscribe to their DSL, U-verse service or HSPA data service. You use your AT&T high-speed Internet membership ID and password at any AT&T Wi-Fi Basic hot spot.
- Verizon is partnering with Boingo to deliver free WiFi access. Free Verizon Wi-Fi hot spot locations include hotels, airports, restaurants, coffee shops, retailers, convention centers and public locations across the U.S. Boingo’s network of Wi-Fi hotspots – which includes more than 100,000 locations around the world – will be available to both Verizon FiOS and DSL broadband subscribers.
- Qwest Communications began offering its high-speed Internet customers free unlimited WiFi at McDonald’s, Starbucks and Barnes and Noble bookstores.
Now, of course, Barnes & Noble, the world’s largest chain of bookstores, announced last week it will provide free Wi-Fi in all 777 of its stores throughout the United States.
Barnes & Noble signed a strategic agreement with AT&T to provide free Wi-Fi to all its customers. No AT&T subscription required. The company hopes to bring more customers into the store, and expand its current e-book catalog of 700,000 titles — 500,000 of which are free public domain e-books from Google — over the coming months.
