Brands Layer

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Brands include cellular carriers, ISPs, PC manufacturers, and enterprise remote access providers seeking to offer a HotSpot service to their customers.

Unlike the cellular industry, which has a government- and cost-mandated limit on competition, the WISP industry's fragmentation makes it impractical to build out a single Wi-Fi network and then to sell those services exclusively to one's own end-users. For instance, suppose a cellular carrier were to build out its own HotSpots and place them in thirty airport venues. The carrier still would be operating under a problematic business model, since there is little overlap between the coverage that its HotSpots provide and the coverage that its customers will demand. Roaming agreements are essential. However, multilateral roaming agreements of the type found in the cellular industry are nonexistent in the WISP arena.

Even the brands that forge direct relationships by entering into bilateral roaming agreements with both large and regional HotSpot operators (e.g. Wayport, aXcess2go, and Airpath Wireless), in an effort to provide their customers the Wi-Fi Internet access they expect, may find they need an aggregator to tie the diverse HotSpots together into a single network.

BOINGO WIRELESS

Boingo, with its ever-growing nationwide network based upon partnerships with Earth-link (an ISP), Fiberlink (a provider of remote access for enterprises), and a variety of wireless networks, provides the end-user with a single, seamless Wi-Fi experience. At this writing, Boingo had aggregated the networks of more than 25 HotSpot operators (e.g. Air2Lan, Nomadix, Surf and Sip, Wayport, to name a few), representing over 1200 HotSpot venues. Although this number seems anemic, it is more than any other national aggregator has managed to cobble together. Furthermore, Boingo actively cultivates a pipeline of thousands of additional venues.

Boingo provides its partners (in particular the carriers and ISPs) with a single, turnkey aggregated roaming network that is uniformly branded. For example, when the user opens their wireless device in a Wayport hotel HotSpot or a SurfAndSip café HotSpot, the user is presented with a live signal branded, "[Brand] Wi-Fi." When the user selects the signal, the software prompts them for a username and password, which is passed through Boingo's back-end systems to the carrier or ISP's authentication systems, and then connects the user to the network. At no time is the user aware of who the underlying HotSpot operator is or what other carriers might also have roaming relationships with that location.

Boingo offers service level agreements (SLAs) with all of its commercial HotSpot operator partners, and its NOC (network operations center) actively monitors each of their HotSpots at a granular level, 24x7, to ensure a high level of reliability.

Moreover, through its software, network aggregation, support, and billing services, Boingo helps major branded communications providers (e.g. T-Mobile) add Wi-Fi capabilities for their customers.

Boingo also operates a call center dedicated to helping end-users quickly resolve driver issues, software conflicts, hardware problems, and other Wi-Fi-related technical issues. As an option, Boingo can provide private-label support services direct to end-users, or higher-tier support to an operator, carrier or ISP partner's own support personnel. Boingo also provides a single aggregated accounting stream to carrier and ISP partners in a wide variety of industry-standard formats. Optionally, Boingo's billing system can be used to bill end-users directly, or on a private-label basis. This service is made available to carriers or ISPs who are interested in getting an offering to market faster than they can prepare their own billing systems.

Boingo allows carriers and ISP partners to have the option of building their own HotSpots, or cutting direct deals with larger HotSpot operators, and still use Boingo's aggregation, network monitoring, and clearinghouse functionality to tie their networks together. Through Boingo's software and network aggregation services, partners get a single turnkey network, one NOC, and one stream of reporting data. This allows its partners to offer their customers a truly compelling Wi-Fi experience, without committing a significant amount of capital.

In addition to aggregating networks from HotSpot operators, Boingo fuels the infrastructure build-out at the grass roots level through its "Hot Spot in a Box." (Hot Spot in a Box 1.0, a $540 access point from Colubris, is available now. Hot Spot in a Box 2.0-based products from other equipment manufacturers should be available by mid-2003. The price of these products will be under $300.) The Hot Spot in a Box technology allows any Wi-Fi access point to operate as a commercial HotSpot. A Hot Spot in a Box-enabled access point is easily configured to communicate with Boingo's back-end systems for user sign-up, authentication, billing, and settlement.

Envision a future when every DSL line, cable access line, or T-1 line has a Wi-Fi hub on the end of it. Every one of these broadband endpoints has the ability to become a commercial HotSpot. You don't need to operate a café, retail store or hotel to consider the potential of this. If you live in the middle of a residential area or a small farming community, and have a DSL or cable broadband connection, you could become a HotSpot just by flipping a switch on a Boingo Hot Spot in a Box-enabled access point. At the end of the month, you would receive a check for all Boingo subscribers who connected to the Internet via your network

Note 

There may be commercial and regulatory issues to be addressed before sharing or reselling a residential high-speed connection. Generally speaking, DSL and Cable Modem providers and ISPs include clauses prohibiting bandwidth sharing if the service is intended for residential usage. A typical business-grade service package, however, will usually allow this kind of activity. Thus, since every service provider's terms of service agreement is different, before you begin sharing your high-speed Internet service with others, check with your provider.

Boingo also offers a "Boingo Ready" certification program for higher-end access control devices designed for large HotSpot installations, such as those at convention centers, hotels and airports. This program certifies that hardware will plug seamlessly into Boingo's back-end systems for sign-up, authentication, network management, and support. Several vendors, including Nomadix, Colubris, and Vernier, ship Boingo Ready products.

The Carrier Case

For the telecommunications carrier (wired or wireless) or ISP looking to offer a compelling Wi-Fi experience to its customers, there are two options. The first is to enter into roaming agreements with a large number of different HotSpot operators, and build systems to integrate and monitor them as a single network.

This approach crosses the segmentation lines, with the operator possibly occupying multiple layers at once. For example, experienced telecom providers deploy commercial HotSpots at the HotSpot operators layer, and launch branded Wi-Fi services at the brands layer (that's what T-Mobile in the U.S., Telia in Sweden, and BT in the U.K. are doing). Since the carrier group has the capital and expertise to deploy networks, as well as established relationships with millions of customers to whom they can promote their HotSpot service, it's not too surprising to see these carriers entering the WISP marketplace through multiple WISP layers.

But even established carriers will need to maintain their focus, if for no other reason than to obtain economy of scale within a specific layer. If not, the carrier will have difficultly resolving questions, such as: if the company signs up new venue owners, what happens to the brand? What happens when roaming into other provider's networks? How is that handled? Who owns the customer as various operations travel through the layers?

Thus companies that decide to operate under a multilayer business model may need to run each layer as though it were an independent entity to be successful.

The other option is to work with an aggregator (e.g. Boingo, GRIC, iPass) that has already assembled a multitude of HotSpot operators into a single system, and that can provide the necessary management oversight and client software to uniformly brand the user experience.

Established telecommunications companies are welcomed into the HotSpot space, due to their deep pockets and customer clout. However, U.S. carriers are approaching the WISP industry tentatively. That's the exact opposite of their European counterparts, who are moving full-steam ahead. "In Europe, all of the 3G rollouts have been delayed, and so carriers are saying, 'If we don't it, others will,'" says Henning Klemp, marketing director at Birdstep Technology, a provider of IP connectivity software for WLAN systems. Klemp adds, "The established carriers not only have a large subscriber base, they are experienced with the ins and outs of roaming agreements."

Furthermore, Klemp suggests, "They also believe that if they can educate the people about high-speed access, then they will have a user mass that will more easily adapt to GPRS, CDMA, and UMTS, when that evolves. In the U.S., the operator market is too fragmented. That has enabled companies like Boingo to take a stronghold."

Another motivation driving carriers to the HotSpot market is that there's money to be made. "The dollars that wireless operators are able to tap from the subscribers is another reason [HotSpots] are rolling out," says Hans-Arne L'orange, Birdstep's CEO for the Americas.

The Roaming Conundrum

The next hurdle faced by the telecommunications industry is the end-users' inability to move between the different networks without losing their connections. The logistical challenges that this kind of roaming presents are tremendous. Still, many in the WISP industry are positioning themselves to meet these challenges, and some, such as Telia and BT, have already moved to address them. These two telecom giants are among the largest HotSpot operators in Europe, and they are doing roaming (but no money changes hands). Roaming is offered more as a footprint-expanding exercise rather than as a revenue builder. This is primarily because the nascent WISP industry doesn't generate enough roaming traffic to justify outsourcing settlement operations to the usual external clearinghouses, which have years of experience with telco-related billing.

Red-M, a leader in enterprise-level wireless management solutions is tackling the roaming dilemma. Steve Gallagher, director of business development at Red-M, contends, "Enabling a PDA user, for example, to go from WAN [wide area network] cellular to [Wi'Fi's] WLAN to enterprise Ethernet is a market requirement that needs to be resolved before any type of public hotspot takes off in large numbers. The carriers are driving this. A user subscribes to a carrier for voice and wide-area data service, GPRS, and now in addition to that, the carrier offers a hotspot service over WLAN while the user is in those areas. They wrap it up under one billing solution and it's much more compelling."

According to Gallagher, Red-M's Genos solution supports multiple wireless technologies through a platform that it has designed "to overcome device, user, and location management as well as integration of different wireless technologies." The Genos software integrates WLAN into an overall platform that could facilitate ubiquitous connectivity.

Birdstep Technology has also taken steps to address the roaming issue. It's IP Zone Server 1.5 software is specifically designed to facilitate a handoff between a WLAN and a WAN. The IPZone Server 1.5 provides cross-platform authentication so that any computing device with a wireless connection and a web browser can obtain access to the Internet. Moreover, the software achieves secure and continuous connectivity between HotSpots and GSM/GPRS networks through integrated support for Mobile IP client software, an application that allows users to connect and re-connect across different types of infrastructures without application downtime or user intervention.

Trond Lunde, sales engineer at Birdstep clarifies. "We take care of the IP connectivity, maintaining secure tones, true application state, and making sure that the transition is hidden from the user as he or she moves from one network to another. We do a handover by fooling the application state. So that if you're downloading a PowerPoint presentation, for example, and you move from a HotSpot to GPRS, the only thing you'll notice is that your connection speed changed."

Figure 11.8: Cellular carriers can establish partnerships with members of the WISP industry to market their services. This graphic depicts a cellular HotSpot operator that chooses to not deploy its own access network. Rather, it buys capacity from networks deployed by others through the services of an aggregator, although it does manage its own customer relationships and billing (i.e. the end-users pay the cellular provider for HotSpot usage).

There are two different angles on the Birdstep mobile IP software. It can be designed for network operators or for use in a device.

Interoute, a Pan-European telecom provider, has opened what it calls an "802.11 roaming exchange." Nick McMenemy, Interoute marketing director, says, "A lot of companies are competing for the marquee sites but there are roaming conflicts. One may have an agreement with Costa Coffee, another with Starbucks. We're neutral and offer services based on our billing engine and presence in most European centers."

Interoute uses proxy authentication software to determine whether users have a right to roam in a location and then the provider takes care of the "how many cents per minute" calculations to apportion the roaming fees between the provisioning HotSpot (the one providing the wireless Internet access), and the operator with whom the end-user has a relationship.

Boingo Wireless, of course, also has its eye on the cellular provider market. In March 2003, it announced its Boingo Platform software, which, according to the company, melds the wide area networks of cellular carriers with the WLAN's of HotSpot operators. The company expects that, by June 1, 2003, anyone with a laptop equipped for 802.11b and cellular connection (i.e. equipped with a PC Card with GPRS, CDMA 1x or iDEN technology) will be able to roam between 802.11-based HotSpots and 2.5G cellular networks. The Boingo Platform is said also to enable carriers to offer subscribers both traditional cellular phone service and Wi-Fi data service, while maintaining brand identity and avoiding the necessity of building the appropriate back-end systems and installing the necessary roaming technology.

Ed Rerisi, director of research at Allied Business Intelligence, suggests that packaging Boingo's network of HotSpots under a private label is a smart move. He feels that Boingo's strategy is both offensive and defensive. By increasing its network's footprint, it can "thwart the big guys," For the Hotspot Operator layer, "coverage is the name of the game," says Rerisi. And through the sales of its Platform software to cellular operators, Boingo will be able to greatly expand its area of coverage. Through a Boingo statement, the aggregator declared: "The company has spent two years and $10 million developing client software, back office systems, and roaming technology that can now be leveraged by other service providers."

What's most interesting is that this move allows Boingo to compete directly with the likes of Cometa Network (an alliance of AT&T, IBM and Intel), which is itself hoping to sell back-office services to carriers and ISPs looking to start their own HotSpot operation. Rerise says, "Boingo wants to position themselves against Cometa." And, according to Rerisi, Boingo is "in a good place" since the company is positioning its combined cellular and Wi-Fi network as "a complete wireless data solution."

Boingo says that its re-branded software will give carriers access to private and public Wi-Fi networks, a HotSpot "sniffer," and a built-in virtual private network (VPN) that allows HotSpot operators to provide end-users with an entirely secure method of accessing the Internet or their corporate network. The aggregator also says that its software provides something new to the industry—the ability to filter out the signals from competitors, meaning users can only connect to their subscribed carrier or ISP.

Note 

The term "sniffer" refers to a software program designed specifically to scan the airwaves for a Wi-Fi signal sent out by a Wi-Fi-enabled HotSpot.

In fact, T-Mobile and Boingo announced that they had entered into an agreement to co-develop unique end-user facing software and services, making it easier for T-Mobile's customers to discover and access its HotSpots and its nationwide GPRS cellular network. The end product will be the same aforementioned Boingo Platform software, but with an added client-service solution designed specifically for T-Mobile. The end product will include an intuitive sign-up and log-on screen (a slick, single button sign-on); easy-to-use help files that will address the most frequently asked questions; a built-in, searchable location directory so end-users can find the nearest T-Mobile HotSpot; a streamlined setup process to enable end-users to connect easily and to move between private and public networks; the ability to integrate special site-specific content and promotions for T-Mobiles brand-name location partners (e.g. Borders Book and Music Stores, Starbucks, American, Delta and United Air Lines, Kinkos). Future versions of the product will allow customers to designate their network preference or to opt for the network connection with the best available speed. It is noted, however, that this agreement is silent on T-Mobile customers roaming into Boingo's network or vice versa.

Cellular carriers such as the oft-mentioned T-Mobile, along with Sprint PCS (a Boingo investor), AT&T Wireless (which provides HotSpots for the traveling business user), and Verizon (through pay telephone HotSpot locations), have all entered the WISP arena.

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