The Next Huge Thing – Base Assumption

Within four years, possibly three, free WiFi will be available on the streets of every American city.  Building services, applications, and devices to take advantage of this capability will be the mainspring of Bubble 3.0 and may be the saving grace for American competitiveness. Extending this access to rural areas will be both a challenge and an opportunity.

Note that there is no source for this prediction; it is mine alone as far as I know.  If I were a gunner, I’d be known as good at azimuth and poor on range.  I usually get the direction right.  I’m usually (but not always) too optimistic on timing.

The preliminary selection of Google and EarthLink to unwire San Francisco is the critical straw in the wind.  Google says its plans don’t extend beyond San Francisco and its hometown of Mountain View, CA and Bryant park in NYC.  EarthLink, which already has a number of other municipal contracts is clear that intends to go much further.  Om Malik speculates credibly that Google will be a big part of this expansion.

The model in SF may or may not be the model for continued expansion – certainly depends how it works out; but it is an interesting one.  Free access will be available to anyone (tourists included) at the relatively slow speed of 300kps.  This is slower than most DSL but about 6 times faster than dialup.  Perfectly good for email and VoIP (opportunity!) and adequate for most web browsing including, of course, search (can you say “local”?).  Some of this bandwidth will be consumed by ads with which Google will support the service. 

Ad-free service many times faster will be available from EarthLink for an estimated $20/month.  This is what most residents and small businesses will probably buy since it is more than competitive with DSL.  Cable providers may elect to compete with this offer.  If so, all the better.  My guess is that, as EarthLink does multiple cities, these paid accounts will include roaming privileges to at least all other EarthLink-provisioned cities.

Here’s some reasons why this is such an important straw in the wind:

1. Google.  Huge hoard of cash to take this further if they want.
2. Google.  Recently got a number of patents for serving targeted ads over WiFi.
3. Google.  John Battelle’s Searchblog says: “In line with its commitment to add value to advertisers and users through local advertising, Google today announced local business ads, a new feature in AdWords that allows advertisers to promote location-based products and services.” Searchblog also talks about Google’s Real Estate listings.
4. Google competitors.  Microsoft, Yahoo, and eBay have plenty of money and chutzpa, too.
5. Cost. According to CNN, the cost is “expected to be at least $15 million”. Even if it’s double that, it’s peanuts.  Reason is that the underlying bandwidth is already there and it’s cheap to put antennas on city owned poles etc.
6. Speed of deployment.  "I am still hopeful, and maybe I'm a cockeyed optimist, that we can finish this year," said Chris Vein, executive director of San Francisco's technology department. – quoted in the San Francisco Chronicle. Probably is optimistic seeing that a final contract has to be negotiated and go before the Board of Supervisors but indicates how easy it is to deploy the technology.  New Orleans ahs been up and running on a WiFi network since shortly after Katrina.  Politically, things that bring immediate results tend to get done!
7. Location information. The provider of the service will always know within a few blocks where a subscriber is.  Now put that together with Google maps and local ads and real estate.
8. Municipal benefits.  Besides politically popular benefits for users, the city actually get revenue by leasing light poles etc.  Doesn’t spend money from its own budget.  Doesn’t (hopefully) get in the way of the deployment.  Also the city can base its own police, fire, sanitation etc. communications – including voice – on the network and save money.  A WiFi network is inherently much more disaster resistant and, because of decentralization, terrorist resistant than the equivalent wired network.
9. Availability of clients.  Almost all new computers have WiFi built in.  Many – soon all – mobile phones do as well.

So this is going to be huge.  Question is: how do you, my entrepreneurial friend, capitalize on this?  More to come.

Note: several weeks ago I posted about advertising-supported WiFi.  I was thinking much too small.