Chapter 11: The WISP Industry

Overview

The Wireless Internet Service Provider (WISP) industry envisions a world where people routinely use high-speed wireless networks to access email, corporate networks, the Web, and more-whether they are traveling or going about their daily business in their local neighborhood. For the purpose of this book, the WISP industry encompasses all businesses (for-profit and non-profit) that operate under new, although varied, business models with a common theme: providing publicly available Internet access via Wi-Fi technology.

At the moment, the industry is struggling in its bid to find the right revenue model. As the reader will grow to understand, it will take time for the industry to determine the right revenue models for each segment of the industry. So while there is money to be made with Wi-Fi, there are still issues that need to be resolved. Until then, all within the WISP industry will run into difficulties when it comes to producing a consistent, positive revenue flow.

What exactly is a WISP? The term "wireless Internet service provider" or "WISP" is commonly used to refer to any entity that provides publicly available Internet access via a wireless local area network (WLAN), Wi-Fi or not. However, the term is too all encompassing in that it refers to all service providers in all segments of the WISP industry: individual HotSpots (they provide wireless access to the Internet only from a specific location), the HotSpot operators (these are the enablers-companies that provide the network, hardware, technical expertise, and back-end management for the individual HotSpots), and the aggregators (a group of virtual network wholesalers that help to tie the individual HotSpots and enabling networks into a larger, cohesive roaming network). Added to this mix are other business models including "brands," infrastructure providers, ISPs (Internet Service Providers), application service providers, and the telecommunication carriers (wired and wireless).

In an attempt to bring some kind of clarity, the author (and others) has divided the industry into layers of similar business models:

Venue Layer. This layer encompasses all of the individual entities that operate HotSpots out of a physical location. A venue operator has in place at least one access point and a highspeed Internet connection, which is made available to the public. The access point is used to provide connectivity between the venue customers' computing devices and the Internet. The access point also enables the end- user (the customer) the freedom to move about at will, as long as he or she stays within the access point's radius. This freedom of movement is referred to as "roaming," albeit, very limited roaming. Venues include business models such as hotels, cafs, airports, train stations , and convention centers.

HotSpot Operator Layer. This layer consists of the HotSpot providers. Companies in this layer maintain a network that venue owners can use when they contract to offer a specific HotSpot operator's service. In exchange, the HotSpot operator provides the necessary gear, support and network to provide Internet access to the venue owner's customers. Cafe.com, Wayport, and Surf and Sip, are just a few companies that reside in this layer.

Aggregator Layer. This layer is vital to the growth of HotSpots, because this is the layer where it is most practical to enable roaming between different HotSpots, and to provide the necessary back-office services, e.g. authentication, accounting, settlement and so forth. Because of the inherent fragmentation within the HotSpot marketplace , venue owners and HotSpot operators are beginning to see the benefit of partnering with aggregation layer companies such as Boingo, GRIC, and iPass.

Brand Layer. Companies within this layer typically partner with companies in the aggregator layer to offer Wi-Fi access to their already established customer base. Examples include T-Mobile, Sprint PCS, and AT&T Wireless.

Figure 11.1: This graphic depicts the four layers within the WISP industry. As in the ISP space, the most successful companies will focus primarily on one industry layer, partner between the layers, and compete within their own layer. Graphic courtesy of Boingo Wireless Inc .