Wi-Fi: If Not Free, Then How?

From fancy hotels to fast-food joints, the number of venues offering high-speed wireless Internet access is expected to grow at a heady clip this year. But industry analysts aren't expecting laptop users and their credit cards to follow.

In the wake of the demise of several large builders of Wi-Fi networks, including last month's closure of Intel-backed Cometa Networks, analysts say one lesson the industry has learned the hard way is that laptop owners remain reluctant to pay by the hour for online access.
"Wi-Fi wants to be free," said John Yunker, an analyst at Byte Level Research who follows wireless technology. He believes high-speed wireless access will evolve over the next several years into a freebie service, much like cable television or air-conditioning in hotel rooms, that customers come to expect at cafes, airports and conference centers.

For surviving Wi-Fi players to remain afloat, Yunker believes, they'll have to change their business models, offer more all-you-can-surf plans and cut prices. For those who do charge, he believes customers will be comfortable paying rates of about $4 a month for unlimited access to a network of hot spots.

Today, such a price point is out of line with reality. Two of the largest Wi-Fi services, T-Mobile HotSpot and Boingo Wireless, charge $30 a month for unlimited use, not including a $10 discount T-Mobile offers to its cellular customers. In exchange, customers get to connect their laptops at a network of airports, hotels, restaurants and other locales.

For those who pay by the hour, charges range from $3 at McDonald's to $6 at Starbucks, with an option to pay $7 to $10 for a 24-hour pass. While these rates hold some appeal for business travelers with important commerce to conduct on the go, they're less compelling for general public, analysts say.