Few start-ups encapsulate the desperate utopianism of the times so much as Fon Technology.
Created by the Argentinian dot.com billionaire Martin Varsavsky, who built and sold the Spanish portal Ya.com and ISP Jazztel before the bubble burst, at the heart of Fon is a soulful of hope.
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Like gay marriage, but for bloggers
Newt Gingrich once proposed giving laptops to the homeless – at the same time as he was axing food and medical services for the poor. Now San Francisco’s Mayor Gavin Newsom has borrowed a page from his playbook. Wi-Fi is a ‘fundamental right’, Newsom said today at a press conference.
The city wants to see an “affordable” Wi-Fi network covering the 43 hills, and 49 square miles of San Francisco, and Google is one of the bidders. With the boom-bust city $200 million in the red, Newsom wants taxpayers to contribute as little as possible for the network, estimated to cost between $8 million and $16 million.
It’s certainly an ambitious proposal. The city wants the network to work when a connected device is moving at 30mph, so people can use it on the bus.
“Taking advantage of such a portable service would not generate a traffic hazard,” the city’s technology department advises us.
But it may be enough to cause mass hysteria. Few San Franciscans will believe a MUNI Transit bus even capable of going at 30mph.
The city isn’t going to let something as trivial as technical specifications, or physics get in the way. City experts insist that 30mph Wi-Fi is possible with the 802.11b/g network it wants built – but it doesn’t say that this isn’t part of the spec, and requires expensive additional equipment for each moving vehicle – in this case, a runaway bus.
The goal of the project isn’t free Wi-Fi, according to the city’s tender, but for an “affordable” service “priced lower than the non-promotional retail rate of comparable offerings on the market.”
Newsom says he expects a legal fight, and he’ll surely get one. For 3G cellular providers a municipal network blows a hole through their prospects of making any money from data in this lucrative market. Cingular launched W-CDMA here last year, and Verizon Wireless and Sprint PCS are just rolling out EVDO now. For operators who blanketed San Francisco with hotspots during the 2003 Wi-Fi bubble, a rival municipal network will mean the end of the road. For local ISPs, already facing likely extinction from the FTC’s decision to allow SBC – the monopoly DSL wholesaler – from sharing its lines, there’s the prospect of losing fixed broadband business to the wireless network. All face potential threats to future VoIP services too.
And why should 4G network providers ever look again at a market with a monopoly incumbent? Especially if that incumbent is Google. Google already operates hotspots in Union Square, and San Francisco could be the first major conurbation to fall to GoogleNet.
But Newsom relishes a legal fight, even if the odds are stacked against him. Days after his in auguration in 2004, Newsom permitted same sex marriages to take place in City Hall – fully expecting that a state court would strike it down very rapidly. However the publicity made Newsom a nationwide celebrity, and established his formerly shaky (as in non-existent) progressive credentials.
Perhaps that’s how we should think of his Muni Wi-Fi campaign. As a sort of gay marriage – but for bloggers.
Five months after announcing its first Google-branded hot spots, covering San Francisco’s Union Square and main public library, Google is enhancing the service. The ad giant briefly made a beta of a proxy server, Google Secure Access, available for limited download today before withdrawing the link.
The proxy is intended to protect 802.11 wireless users at Google hot spots from casual packet sniffing. But it also gives the ad broker the advantage of knowing what you’re looking at, and exactly where you are geographically – a huge advantage to its core advertising business.
Unlike true anonymizing proxies, however, Google said it will retain certain information for research purposes. Anonymizing proxies, such as Anonymizer, offer rather more sophisticated protection and the reassurance that the proxy maintainer can’t read the network traffic – at least in theory.
You could call it Google’s “No Packet Left Behind” strategy. In addition to collecting your Google search queries and correlating them with your Google GMail e-mail account, the proxy gives Google access to all your internet traffic. (Google’s spin doctors initially denied the company would correlate email and search queries, but this year, it opted GMail usersin: account holders can now peruse a personal search history).
“All your Internet are belong to us”, GMSV put it succinctly today. The site has a screengrab of the Secure Access download page, before it was withdrawn.
Google’s explicit strategy is to develop “A Google that knows more about you”, in the words of CEO Eric Schmidt. And the only way we can think of for Google get to know more about you than funnelling all your internet traffic through Google servers, is for Eric Schmidt himself to camp out in your bathroom 24 hours a day.
Given his busy schedule, and the fact there are so many of you, that’s unlikely.
It’s the second proxy project that Google has unveiled this year. The first, Google Web Accelerator, was withdrawn after a few days. Many users discovered they could spoof other web forum users with the IE plug-in.
The Web Accelerator also generated some fascinating speculation that Google was attempting to create a “walled garden” or a net within the net. This would, some speculated, be a much more benign version of the walled gardens beloved by mobile carriers and cable ISPs, who block TCP/IP ports at their whim, disabling important internet services. Advocates suggested that GoogleNet could offer dramatic performance increases for ordinary internet users if rolled out on a large scale. The model is gaining favor for another reason: as a response to copyright concerns. PlayLouder MSP in the UK, and Mashboxx in the US will offer a “walled garden” which prohibits some user behavior in return for the assurance that music files can be freely exchanged.
We cast a sceptical eye over some of these discussions at the time, and Reg readers responded by pointing out the web forms a smaller part of your essential internet activity than Google might suppose: see Google can take the web, yawn readers.
“If they really want to sink their brand into this,” wrote one reader, “Google will end up controlling a high end phone book and homework library.”
Nevertheless, ordinary users care little for such abstractions as “the end to end principle” and which TCP/IP ports are open – while a network that permits users to share music freely – free from legal threats, spyware and restrictive DRM, and with the moral assurance that artists are being paid – has obvious attractions for the market. In this sense, Google is tipping its toes into how future computer networks might work – it certainly has the power to move the market with it.
Which leaves us in little doubt that Google deadly serious about network infrastructure, and is thinking not only beyond search but even beyond the web, too.
“Or the arrival of the Web browser, which blew millions of minds, making a mouseclick feel like teleportation.”
Chris Anderson, Wired
I was really calling the editor of Wired magazine, Chris Anderson, to check up on which weird and interesting drugs he was taking when he wrote the sentence you see above you.
[* answer below]
Anderson bet me that in five years time, there will be more 802.11 chipsets then there will be mobile phone chipsets. Naturally, opportunities like this don’t come up every day, so of course I took him up on the offer.
It was an affable chat, but by the end it was clear to me that Chris hadn’t just drunk the Kool-Aid, his metabolism has mutated itself, Science Fiction-style, to produce the stuff on demand. So you never need go thirsty ever again.
“The technology is Wi-Fi, and it’s the first blast in a revolution, called open spectrum,” he writes, “that will drive the Internet to the next stage in its colonization of the globe.”
Far from colonizing the globe, the Internet has failed to create much of a plut even here, in the land of its birth.
From recent research, we learn that half of the richest nation on the planet has cottoned on to the Internet for what it really is: a boring, stupid and expensive information tool that doesn’t really work very well.
True believers dismiss this significant part of the population as Luddites. But I think they’re making a sensible value judgment on the quality of the information they’re receiving. It’s not that they don’t get it: they are simply exercising a vote and it’s a pretty smart one: The PC-Internet proposition has value, but the experience is awful. It’s not as easy to use as a can opener or a remote control. So where do you think our Brothers and Sisters go?
C’mon. This isn’t hard to figure out.
However, to indulge the Deregulation Lobby for a moment, we must confess: it’s certainly a beautiful dream.
Home grown WiFi networks will cover the nation, giving us unlimited Internet access and phone calls, and the evil carriers will melt into history.
Who doesn’t want to believe?
Show us the money
However we must have a rational basis on which to proceed. And the problem with this alluring vision now is that there won’t be enough money to sustain it. After all, everyone expects public WLANs to be free.
“It’s a hype cycle like we had around dot-coms. It’s not focused on technical or economic reality,” Qualcomm VP James Belk tells Business Week, a point we made here
Qualcomm founder Irwin Jacobs tells the magazine how expensive it is to provide WiFi access, and the hidden costs that the lobbyists often fail to point out.
“We believe Wi-Fi will explode in homes, large businesses, and college campuses,” he says. “The real question is: Is there a business [behind] providing Wi-Fi in hot spots?”
“The problem I have is seeing a long-term financial model in hot spots. Wide-area coverage, such as EV-DO, will provide high data rates over larger areas than Wi-Fi can. If you’re paying a monthly rate to your cellular provider for the capability to get data anywhere, would you pay more to get Wi-Fi in hot spots? No. Plus, EV-DO is secure and requires less power than Wi-Fi does.”
Successful WiFi companies sell into the three business sectors Jacobs mentioned above, and stay well clear of the public access sector:
“Hotspot is a good idea – but who gets paid?” Ben Guderian, a marketing director at SpectraLink told us. SpectraLink has a good business selling into health care and commercial organizations, and this week launched two new campus 802.11 phones.
“When you try to make Wi-Fi cover a wide area, it’s absolutely the worst way to do it, Martin Cooper, told CNET recently. Cooper is credited as the first person to make a cellphone call (in 1973, he led Motorola’s cellular project).
“In order to cover a city, you need a million sites; we actually did an analysis of that. And every one of them has got to have backhaul. So it turns out it’s neither economical nor practical. ”
Can I climb up your pole?
Writing in the investor magazine The Chili, Woz Ahmed, sums up the Bubble and adds another hidden cost to Jacob’s list: infrastructure build out. This isn’t a problem on campus or corporate networks, but planning permission is time consuming and expensive.
“A WLAN operator must have the expertise to select, obtain planning permission, commission and manage hotspot sites. It may be uneconomic to do this, as the potential number of WLAN users will always be lower than cellular voice users.”
Even in densely populated urban centres, “it will not be cheap, as premises owners are contributing to the WLAN bubble by charging operators high fees for attractive hotspot locations, such as airports, conference centres, hotels, major transport terminals and routes.”
Of course, these inhibiting factors don’t apply in a campus environment, or the home, as SpectraLink’s Guderian told us, “The cost of wireless is getting low enough so that wireless can save wiring for both voice and data,” he told us.
Indeed this is where WiFi poses an acute danger to the incumbents:
In The Chilli’s opinion, WLAN is the Rabbit of Internet data, given its weaknesses in standards fragmentation, interoperability, roaming and business model. Rabbit was a hotspot initiative by Hutchison launched in 1989 which failed because the seamless coverage offered by the 2G networks was so much more popular. People appreciate the certainties of something just working. It will be amusing to see the WiFi lobby explain to their mothers, and other relatives, that you only need to “reset your Mac WEP parameters” every four hundred yards to keep your WiFi phone working, and we eagerly the responses to this modest request.
Advantage Incumbent
But who expects the carriers to vanish overnight? Debt-laden they may be, but they still have a steady income. And the traditional carrier business model has a significant advantagein economies of scale, over new entrants. The carriers have made expensive investments in upgrading their networks, but it voice. 3G networks are roughly four times as efficient as the 2G networks and more savings will be achieved as the old networks are turned off. Data is just a bonus.
Admittedly, the carriers had expectations for mobile data that were almost as unrealistic as the WiFi/spectrum deregulation lobby has now. If only they’d asked the other half, the people who have voted with their feet when asked to comment on the glories of the Internet.
The successful models for mobile data have been the ones that eschewed all pretence to be “The Internet” – WAP was sold as “the mobile Internet” – and delivered us a simple social service or communication channel.
Forever Blowing Bubbles
But you have to wonder how the bubble-boosters affect the prospects of successful businesses, such as the SpectraLinks who have built solid businesses on 802.11. In no small part, by wisely avoiding the public access arena.
It’s not as if the wireless world isn’t interesting enough already. There’s a frantic pitch for the retail markets going on right now, for the last “yard”. Because so many people have phones, and they trust them to work, there’s a lot of maneuvering around “Proximity Servers” and local wireless gateways. These represent serious gambles for the investors.
But the WiFi Bubble is interesting if only because, a couple of years after the greatest loss of wealth in human history, it proves that we have astoundingly short term memories, that we are incapable of fixing structural problems with our trust capital relationships, but most of all, because we insist on perpetuating the dippy belief that technology can provide all of our answers.
These delusions remain here on the West Coast. I suspect these folks will realize pretty soon that American capital – already thinking of a Sinofied Dell – has cut them adrift.®
[*] Since you insist. This extraordinary statement had us leaping to the phone, such was our curiosity. Was it, we wondered DMT or Peyote? “Is this on the record?” Fraid so. “I’m, erm, much too boring to do anything like that.” Shame.
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