Thursday, August 13, 2009

Verizon Adds Free Hotspots for DSL, Fiber Customers

Verizon will provide its medium-and-faster-speed DSL and fiber (FiOS) customers with free national Wi-Fi hotspot access: The service, provided by Boingo and rumored to be in the works earlier this year, allows Verizon to match some of Cablevision's offer in overlapping territory, but to also compete with cable operators and future competitive services elsewhere. The directory is available, but lame.

Cablevision has committed $300m to a tri-state (NY, NJ, and Conn.) buildout of outdoor Wi-Fi to its broadband customers in those same states. Verizon, in contrast, has turned to Boingo Wireless to provide service. Boingo couldn't comment on particulars, but said the deal applied to all Verizon business units; Boingo's previous contract was just with Verizon's business group.

Software is required to access the network. Verizon customers have to log in at to download the package. It's likely a private label version of Go Boingo, the lightweight software that the aggregator switched to that automatically recognizes and offers to log in to Boingo-affiliated hotspots. It's available for Mac OS X and Windows. Update: Correction! Boingo's software is Mac and Windows compatible; Verizon's private-label software is currently available for Windows XP (32-bit) and Vista (via @siracusa).

Verizon customers with the cheapest flavors of DSL (slower than 3 Mbps) and FiOS (slower than 20 Mbps) don't get the service. AT&T once divided its customers for free Wi-Fi, too, but eventually (and quite a while ago) simply gave it away. It wasn't an incentive for upgrades, clearly, so why bogart it.

(There's a sideshow going on about an Apple tablet that would be exclusively introduced by Verizon late this year or early next that would have 3G and Wi-Fi access. I don't buy it. I can't see a tablet with 3G, because that would limit sales to those willing to pay a large monthly fee. It's much more likely Apple would release a large iPod touch with Wi-Fi only.)

Now in a bit of what you could call a business conflict, Boingo resells AT&T's Wi-Fi service. IDG News Service noted that Boingo had 30,000 hotspots in the US, and that only 7,500 of those were from AT&T's network, which doesn't make sense. AT&T operates nearly 20,000 locations; 7,500 would represent all the Starbucks outlets. JiWire shows 65,000 hotspots in the U.S., but that includes free locations, such as libraries and chains that aren't incorporated into roaming deals.

IDG was told by Boingo and Verizon that some locations wouldn't be available, but wouldn't specify how many. When I check Verizon's hotspot locator, Starbucks locations are included, as well as Barnes & Noble, also operated by AT&T. In fact, in Washington State, I had trouble finding anything but B&N and Starbucks.

Since the announcement was made, we assume that all is well, but there has to be some chafing at AT&T, since it wouldn't want to enable its biggest cellular competitor.

This initial announcement only covers Verizon broadband, not Verizon Wireless phones and customers. That might be in part because of this conflict, but I don't know anything concrete. Offering free national Wi-Fi coupled with 3G service (whether laptop or smartphone) would be a good move for Verizon, even as the company requires that all future smartphones include Wi-Fi.

While Wi-Fi is a cheap way to offload data use from expensive and sometimes congested 3G networks, Verizon has long been a doubter. It's late to the game here, with no investment of its own, and thus has to bleed money out to offer the service, beholden to other firms and even AT&T nearly directly. Cablevision and AT&T have their operations in house, facing capital and operating expenses, but being able to adjust and conserve those. AT&T even further collects revenue from walk-up customers and non-landline/3G subscribers, too.

GigaOm's Om Malik makes the reasonable suggestion here: maybe Verizon should buy Boingo? In fact, when I was briefed by Boingo, my first comment was, "You're calling to tell me that you were bought by Verizon?"

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