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Free WiFi harder than expected

I can’t say this was really a surprise, but MetroFi just folded.   They sent an email out to subscribers that the service was going offline June 20th, 2008.   Chances are, if you spent any time in the South Bay and have a laptop with WiFi, you ran across MetroFi’s service.   

MetroFi’s plan was to subsidize free WiFi with ads and offer a faster, premium ad-free service for a fee.   Apparently, they were not able to make this work economically, despite the fact that a whole lot of places were looking to roll out muni WiFi.   One wonders if these wide-area, ad supported networks will actually work since there have been a bunch of failures with this business model in the last few months.   Even here in San Francisco, which is attempting to roll out a muni WiFi network with the help of Earthlink and Google, not much has happened.

And, even if it eventually did, it seems that there is little utility in this.  After all, most cell companies provide blanket wireless coverage at increasingly fast speeds for a nominal fee.   By nominal, I mean that if you are using this for business or it’s otherwise important to you, an additional $10/month should not be much of an issue.   And the price for this has been dropping for years.  I can remember paying $130/month of less than modem speed not too long ago.   Chances are that trend will continue and data will just be bundled with your phone.   Plug it into your computer and, voila, instant internet access.   My expensive Blackberry plan already operates this way, but it’s twice the price of a generic cell phone plan.

So, given all this, who is going to use free WiFi?  There is an argument to be made around universal access and the value that brings to communities, but this might be better served by different technologies.   San Bruno, California, for example, provides low cost internet access through it’s cable system.   In Japan, Korea and Sweden, Internet access provide by telecos is far cheaper than in the US, so perhaps there is a fundamental problem with the overall pricing model that might be solved through other creative means, such as re-purposing parts of the universal access fees, or using the $12/month I pay in San Francisco cell phone tax to subsidize DSL/cable access for people who can’t afford it.

In the end, however, it seems that ad-supported WiFi may be a non-starter.   People who really need on-the-go Internet access will pay a little extra on their cell phone bills, people who use it casually will rely on places like coffeshops and hotels for free access.   In that view, it doesn’t seem like there is much room for ad supported free WiFi and, even if there is a demand, it might not be the demographic that advertisers are really looking to reach.