Monthly Archives: June 2015

Is the Internet Already Broken?

The InternetI’ve always been interested in the people who run the Internet behind the scenes. The process is known as Internet governance and it’s not the kind of topic that makes for many news articles, but the governance process has gotten us to the Internet we have today, which is very impressive. But there are changes in the governance coming that has some people worried.

Last year it was announced that the National Telecommunications and Information Administration (NTIA), a US government agency, was going to to relinquish its oversight of the global Internet naming authority ICANN (International Corporation for Assigned Names and Numbers). ICANN is the private nonprofit organization that oversees how domains are named and assigned, and until now the US has had formal oversight of the process.

Adding to this, there is a huge amount of concern worldwide about how the Internet is being used to spy on governments and people everywhere. Edward Snowden showed that the NTA is basically spying on everybody. Since then it’s been revealed that many other governments are doing the same sort of thing.

Last month one of my blogs had a poll that showed that people in the US don’t like being spied upon, but that as a whole we think it’s okay to spy on everybody else. As you can easily imagine, all of those other people don’t think that is a very comforting idea. And so we now have a number of countries looking for ways to somehow build a firewall around the data originating in their country.

As the NTIA is transitioning out of the governance of the Internet, there is a worldwide scramble to figure out what is going to replace it. The latest buzzword associated with this effort is ‘multi-stakeholder internet governance’, meaning the discussions are asking how the concerns of each country are to be heard in the process. There is a lot of talk going on about ruling by consensus. And this makes a lot of technology experts uneasy, an unease which can quickly be understood when looking to see how other multi-national consensus-based efforts at places like the UN actually function.

The general open concepts of the Internet as we know it today are based upon the strong views of the tech people who built the Internet that it ought to be open and free whenever possible. And so we ended up with this wonderful free-for-all that we call the web where ideas and content of all varieties are available to all. And those tech people are rightfully concerned of somehow handing the decisions off to bureaucrats who won’t care what works the best but who will bring other agendas into the governance process.

Governments around the globe differ extremely by what they want their citizens to see or not see on the web. Even a country that is as close to us culturally as England has some very different Internet policies and has built screens and firewalls that stop citizens from viewing pornography and a large list of other types of content. At the extreme end of that range are places like North Korea that doesn’t let the average citizen see the Internet at all.

And so many of the folks who have been governing the Internet behind the scenes are worrying if we have already broken the Internet as it was originally structured. This issue is not so readily apparent to Americans since we filter very little of the Internet here other than the effort that ISPs make to block malware generating sites.

But much of the rest of the world has already started down the path to wall themselves off from us us and this trend is building momentum. We probably will reach multinational consensus on the easy stuff – how to name web sites and how to route things. But one can legitimately ask if the Internet is already broken when there are already so many countries that block their citizens from using large chunks of what we Americans think of as the Internet.

A Business Case for WiFi Hotspots

Wi-FiLately I have been asked a number of times if there is a business case to be made for providing a large outdoor WiFi hotspot network. Today I will look at the two issues that answer that question:  1) the hardware available today and;  2) the revenue opportunities.

Hardware Issues. The WiFi industry is currently in a state of what I call ‘between’. This often happens when a new standard is being introduced. There have been existing hotspots on the market for many years. But the whole industry is moving towards implementing Hotspot 2.0, which is a standard that allows for roaming between hotspots the same way that cellphones roam between cell towers. But since the coverage distance of a hotspot is far less – around 250 feet at most from a hotspot – roaming is even more of an issue for WiFi.

With Hotspot 2.0 fully implemented, a customer can automatically log in when walking within range of a hotspot. But more importantly they will maintain whatever they are doing  (such as a web session or IP phone call) without interruption as they move to a new hotspot (as long as they don’t hit a dead area). But the units on the market today can best be characterized as pre-Hotspot 2.0 and they do not yet include all of the features needed to fully support roaming. This means any units you buy today are going to need an upgrade eventually to a standard that is not yet fully defined.

The units on the market today are also very expensive compared to older hotspots. The manufacturers are concentrating on high-capacity hotspots that can handle as many as 500 simultaneous users. These are complicated hotspots with multiple antennae and cost as much as ten times as the old simple hotspots. But these are what are selling and they are made for stadiums, event centers, busy shopping districts or places where there will to be a lot people. But a citywide deployment doesn’t need many hotspots with that huge capacity, but rather much cheaper and lower capacity units that also do Hotspot 2.0.

Revenue Opportunities. The revenue opportunities for an outdoor WiFi network are not clear. I don’t know of any hotspot networks that have been able to pay for themselves. But there may be new revenue opportunities coming that could improve the picture.

There are two traditional WiFi revenue opportunities. One is to sell access to the WiFi network by the hour, by the day or by the month – traditional ISP services. There are customers in any town who would prefer WiFi to more expensive cellular data if you can create good enough coverage. You can sell this to individuals or in bulk to large employers in a town that have employees who work outside. The other traditional revenue opportunity it to sell dedicated hotspots to restaurants and other businesses that want to offer a branded hotspot for their customers. This will require that you (or somebody) provide a broadband connection to that customer to feed the hotspot.

There are two revenue opportunities on the horizon today. The first is to offer WiFi phones. These phones are being offered today in two ways. First, there is the WiFi-only phone like Cablevision is offering and that only works on WiFi. Cablevision prices this at $9.95 per month for an existing cable customer and it’s nearly all margin. But there are several wireless resellers (and now also Google) who sell WiFi phones that will roam to cellular when WiFi is not available.

The primary issue with copying this business plan is that the companies doing it have all created a proprietary system that works only on a specific phone. That is not something easy for a smaller company to work out. There are some cheap Chinese WiFi-only phones available, but if you choose them you are competing against people’s preferences to use an iPhone or a Samsung Galaxy by forcing them to your handset choice. This is not likely to be very popular until it becomes an app that will work on any phone.

The other new revenue opportunity is to sell wholesale WiFi access to others. I know Cisco has been touting this opportunity for several years. But I have yet to hear of anybody who has been able to monetize the idea. The cellular companies love it when customers use their phones on WiFi, but that’s a far cry from them being willing to buy time on your network on their customer’s behalf.

My conclusion of all of this is that it looks a tough business case today to build a citywide WiFi network. Right now the network hotspots are too expensive for a mass deployment. But there are vendors working on lower-cost hotspots. It also makes sense to wait until Hotspot 2.0 is fully fleshed-out and functional rather than buy a network with undefined future upgrade costs. And on the revenue side, while it sounds interesting to sell bulk WiFi, I have a hard time recommending this as a business plan unless you have presold some large customers like a utility or other carrier to buy bulk access to your new network. I have always been leery of ‘build-it-and-they-will-come’ business plans and I could recommend this only if there is a clear path to monetize it.