By Trevor Marshall

No, but we’re close, and when we get there, expect to pay.

There is a problem with the wireless Internet, a basic disconnect between where we are and where we want to be.

Canadians are keen on wireless data and ’net access. We’re buying wireless base stations and access cards. We’re setting up home networks so we can surf from every room. We’re sneaking base stations into the office and plugging them into corporate networks, causing no end of grief to IT managers. In Canadians Cut Their Wires, a recent report on the Wi-Fi phenomenon, the SeaBoard Group forecast the Canadian market for Wi-Fi hardware and integration services will reach $800 million in 2007, with shipments that year of 1.7 million base stations and 3.2 million access cards, and that does not cover computers that come with Wi-Fi gear installed.

That’s where we are. But where we want to be is to have this same access out in the wider world, to roam in public with our notebooks and our PDAs.

Public gateways go by the catchy name of hotspots. Some are being set up by businesses like cafés, while others are part of a network being rolled out by Canada’s major wireless companies.

And there are a lot of them across Canada: while the industry does not have an official count, Chris Langdon, Telus Mobility’s director of business and enterprise solutions, estimates the carriers together operate about 1,000 access points, with another 500 or so run by other companies.

The Promise and the Challenge

Have laptop, will travel — and connect to the Internet through easy-to-use, ubiquitous access points in coffee shops, restaurants, airports, convention centres, hotels and other public spaces: this is the promise of these public gateways to the online world.

I’ve been a fan of wireless data access since setting up my own home network two years ago, so when Backbone’s editor suggested this story I jumped at the chance. The assignment: grab my laptop and head to the streets. Drink some coffee, order some food and test hotspots to discover just how easy they are to find and use. And try to answer the question: are hotspots living up to their promise?

“It hasn’t been working for days.” The trial did not get off to a good start. I invited SeaBoard Group analyst Brian Sharwood and his laptop to join me and mine for some sipping and surfing.

The first café we tried was a bust; it was a free service, but while our equipment detected the hotspot (along with three or four others from neighbouring residences), we couldn’t get connected.

When we asked the staff about it, they admitted they had no idea what was wrong with the system. “It hasn’t been working for days,” our server informed us.

Despite the negative experience, Sharwood believes we’ll see more businesses hosting free hotspots, simply because they cost so little to install.

“Low-end hotels are providing it for free, a lot of independent coffee shops and restaurants are providing it for free, and it appears to attract business to these places that they wouldn’t otherwise have,” he said. “The restaurants that have been successful seem to have taken the side business from it: they’ve taken the extra 10 or 15 people who have come in to have a coffee, or who have stayed for an extra coffee because they have to reply to 10 more e-mails.”

Spotting a hotspot: This was certainly the thinking behind the decision to install a hotspot at Bar Italia, one of the hottest spots amongst the restaurants, lounges and clubs on Toronto’s trendy College Street. “It was a way of trying to bring in potential new customers,” said Bar Italia proprietor Joe Bonavota.

Bar Italia installed its hotspot about a year ago for little more than the cost of the wireless access hardware itself. Bar Italia does not charge a fee for using its hotspot, but it does restrict access by using a password that’s changed frequently. In this way, only customers get to chew on the bandwidth.

Fair enough: it’s their hotspot, and it’s not a service for the folks in the restaurant next door. As well, staff members have been educated to both maintain the hotspot and assist customers who want to use it. Of the places I visited, Bar Italia’s hotspot was the easiest to use. Bonavota said the service has increased Bar Italia’s daytime business without tying up tables during the restaurant’s busy dinner and evening hours. “It’s become quite successful. It’s not uncommon to see a half dozen customers with their laptops out,” he said, adding that those customers are staying longer. “I would say the average person who pulls out a laptop is here a good hour, sometimes even longer than that. And most of them are having more than a cup of coffee — they’re actually having meals, which is a pleasant surprise.”

Bonavota’s advice for other merchants planning hotspots is simple.

“Consider it carefully,” he said. “You have to know exactly whether it would fit into your venue and certainly whether it would be [attractive to] your customers. For us, it has been absolutely fine. It’s certainly brought new customers into the restaurant.”

The carrier-powered option: Merchants, of course, are keen to attract new customers, but some are worried that a hotspot will be more trouble than it’s worth. Canada’s wireless companies have proposed a solution to that: let the telecom carriers take care of all hotspot matters, so the merchant doesn’t have to. “The objective is to not have to involve the location owner in customer service and technical support to the largest degree possible,” said David Robinson, vice-president of business development at Rogers Wireless. “[Internet access] has precisely nothing to do with the coffee business, for example, and merchants don’t want anything to do with it. If they start taking calls on this, they’ll say ‘get the thing out of here.’”

A number of managed networks have been deployed to deliver for-fee wireless data access in public venues. Rogers, for example, is deploying a network into select Second Cup locations across the country, while Telus has done the same at almost four dozen Timothy’s coffee shops in major cities in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Quebec.

Robinson said hotspots are designed and implemented on a site-by-site basis, but he anticipates the most popular configuration will be hybrid systems in which location owners want Wi-Fi for their own purposes and the public hotspot piggybacks on that as a separate virtual LAN. “That’s really, in many cases, the best scenario for both parties because the public hotspot can subsidize the cost of the private infrastructure,” he said. “A paid, public, commercial hotspot allows merchants to forward their own internal objectives more cost-effectively.”

Hotspot interconnection: At this point, these networks are not interconnected, which means one needs an account with each operator in order to use its network. My third sipping and surfing experience demonstrated the shortcomings of this approach: with a few minutes of free time I decided to log on at a carrier-powered hotspot, only to be presented with pages of sign-up information — including a service agreement. By about the fifteenth paragraph of legalese I decided my e-mail could wait until I got home.

To be fair, that awkwardness should disappear when the carriers implement a previously announced inter-carrier roaming agreement brokered through the Canadian Wireless Telecommunications Association (CWTA), likely by the time this magazine goes to print.

“It’s very imminent,” said CWTA president and CEO Peter Barnes, who said the wireless industry’s experience with text messaging demonstrated that cooperation on interconnection issues like this produces a stronger service for wireless users.

Barnes explained the inter-carrier agreement will make using a hotspot easier, as users will simply enter their phone number and a password and the charges will appear on the next phone bill. “You won’t need an extra personal identification number, you won’t need to begin a new billing relationship — you’ve already got one with Rogers, or Telus or Bell. And no matter who the carrier is, it’ll be as if you’re dealing with your own carrier.”

Langdon at Telus said implementing the inter-carrier roaming agreement will clear the way for carriers to educate their client bases on hotspot availability and use. “I think you’ll see us marketing aggressively to our subscriber bases, both on the mobility side as well as on the landline side,” he said. “We’re talking, for the industry as a whole, more than 15 million (wireless) clients.”

Langdon said customer education is critical to widespread adoption of hotspots, and cites last year’s on-site Wi-Fi demonstration at Vancouver International Airport. He said more than 3.6 million people used the hotspot during the four-month awareness campaign Telus ran at the airport, doubling hotspot use at the airport compared to what it was before the demonstration.

Cost, the big question
But the question remains: will customers pay for hotspot access when another nearby location offers it for free? Some managed hotspots charge $15 for 24-hour access. But Brian Sharwood at SeaBoard said that, as the service matures, consumers will pressure hotspot providers to reduce prices, something that has already occurred in the United States.

For their part, the carriers argue that superior customer service, robust and secure access points, and the trust that customers place in their relationship with their telecom providers will carry the day for managed hotspots. “We’re going to make it consistent, so people are used to it; we’re going to make it secure so people aren’t concerned about it; and we’re going to do the customer service and technical support ourselves,” Robinson said. “We really think the cheap and ineffective locations aren’t helping anybody.”