Promote Thyself

by on March 16, 2006 · 4 comments

I’ve got an op-ed in the New York Times today that expands on my post last week on wireless “piggybacking.”

  • Adam Thierer

    The solution here is proper pricing of the pipe, of course. If a particular user’s wi-fi node witnesses a huge spike in traffic, just let the broadband service provider (BSP) price that user in some sort of a metered fashion.

    A lot of users will cry foul, but that’s the best way to get people to “conserve” bandwidth while also allowing them to open up their connection on a selective basis to neighbors. And, if things got bad enough in terms of network over-usage and the BSP didn’t want to price the pipe on a metered basis, they could always just send the user a dirty letter and tell them to cut back or get cut off. (Some BSPs do this today, but they rarely cut people off entirely).

    But I can see some problems developing as wi-fi grows more sophisticated. I’m currently using an awesome Belkin Pre-N network in my house and it beams out a HUGE signal that I can pick up almost two blocks away. I lock it down, of course. But what about the guy in the future who has an even more powerful wi-fi system and opens it up to his entire high-rise apartment complex? Will it continue to be economical for the BSP to serve that complex if one guy shares his $20 connection with everyone else in the building?

    Again, I agree legislation is not needed to solve this problem, but it could be a problem and discourage further broadband investment / deployment if there were enough free-riders out there. The problem with your cup of sugar example is that the underlying service in question here has extrodinarily high sunk / fixed costs. The providers need to have some certainly that they will be able to recoup those investments if they are going to go in an provide a high-speed pipe to every community. You can share a little bit of sugar without it having serious implications for the provision of sugar in your community. But you don’t really just share “a little bit” of broadband when you open your high-speed wi-fi node to the world. You share the entire capability of that pipe and allow others to extract value without paying for it.

    Again, just let the BSPs price the pipe according to true demand and I think this problem solves itself in the long run. Lawmakers don’t need to get involved here.

  • Adam Thierer

    The solution here is proper pricing of the pipe, of course. If a particular user’s wi-fi node witnesses a huge spike in traffic, just let the broadband service provider (BSP) price that user in some sort of a metered fashion.

    A lot of users will cry foul, but that’s the best way to get people to “conserve” bandwidth while also allowing them to open up their connection on a selective basis to neighbors. And, if things got bad enough in terms of network over-usage and the BSP didn’t want to price the pipe on a metered basis, they could always just send the user a dirty letter and tell them to cut back or get cut off. (Some BSPs do this today, but they rarely cut people off entirely).

    But I can see some problems developing as wi-fi grows more sophisticated. I’m currently using an awesome Belkin Pre-N network in my house and it beams out a HUGE signal that I can pick up almost two blocks away. I lock it down, of course. But what about the guy in the future who has an even more powerful wi-fi system and opens it up to his entire high-rise apartment complex? Will it continue to be economical for the BSP to serve that complex if one guy shares his $20 connection with everyone else in the building?

    Again, I agree legislation is not needed to solve this problem, but it could be a problem and discourage further broadband investment / deployment if there were enough free-riders out there. The problem with your cup of sugar example is that the underlying service in question here has extrodinarily high sunk / fixed costs. The providers need to have some certainly that they will be able to recoup those investments if they are going to go in an provide a high-speed pipe to every community. You can share a little bit of sugar without it having serious implications for the provision of sugar in your community. But you don’t really just share “a little bit” of broadband when you open your high-speed wi-fi node to the world. You share the entire capability of that pipe and allow others to extract value without paying for it.

    Again, just let the BSPs price the pipe according to true demand and I think this problem solves itself in the long run. Lawmakers don’t need to get involved here.

  • http://www.techliberation.com/ Tim

    Adam,

    You’re right. It could create problems for the broadband provider. As I said in my piece, I wouldn’t let my neighbor use my pipe as his only Internet connection, for precisely the reasons you identify.

    However, I don’t think that’s the situation with most cases of wireless sharing. I live in a pretty typical suburban neighborhood, and there are several wireless networks within range of my house. So the majority of my neighbors are paying for their own access.

    I think there are a couple of technological solutions to the problem. One, as I discuss in my article, is that users need better ways of monitoring who is using their network and how much. Most users, I think, will tell their neighbors to get their own broadband service if they find them using it as their primary connection. Wireless routers also ought to have an easy interface for the network owner to ban users on a per-computer basis. (this is technically feasible because WiFi cards have a unique identifier called a MAC address)

    The other solution, especially for apartment complexes, is for the broadband provider to provide wireless service to the whole building instead of running lines to each individual unit. There are a couple of ways this could work. One would be for the landlord to simply pay the broadband provider for a big pipe into his building, and then provide free wireless access to all of his tenants, which would be covered through the rent.

    Another model would be for the broadband provider to offer WiFi access and bill the customers directly for that access. The signup process could even be done online the way airport WiFi networks work now, saving both the consumer and the broadband provider a lot of hassle. And this would give the broadband provider a lot more flexibility–they could, for example, charge slightly more for multiple computer logins, or they might have a “guest” option where somebody can pay a dollar for 24 hours of access (or whatever).

    In any event, I think there are plenty of business models available if casual WiFi sharing starts to eat into broadband providers’ bottom lines. Figuring out which one works the best is the reason telecom execs get paid the big bucks.

  • http://www.techliberation.com/ Tim

    Adam,

    You’re right. It could create problems for the broadband provider. As I said in my piece, I wouldn’t let my neighbor use my pipe as his only Internet connection, for precisely the reasons you identify.

    However, I don’t think that’s the situation with most cases of wireless sharing. I live in a pretty typical suburban neighborhood, and there are several wireless networks within range of my house. So the majority of my neighbors are paying for their own access.

    I think there are a couple of technological solutions to the problem. One, as I discuss in my article, is that users need better ways of monitoring who is using their network and how much. Most users, I think, will tell their neighbors to get their own broadband service if they find them using it as their primary connection. Wireless routers also ought to have an easy interface for the network owner to ban users on a per-computer basis. (this is technically feasible because WiFi cards have a unique identifier called a MAC address)

    The other solution, especially for apartment complexes, is for the broadband provider to provide wireless service to the whole building instead of running lines to each individual unit. There are a couple of ways this could work. One would be for the landlord to simply pay the broadband provider for a big pipe into his building, and then provide free wireless access to all of his tenants, which would be covered through the rent.

    Another model would be for the broadband provider to offer WiFi access and bill the customers directly for that access. The signup process could even be done online the way airport WiFi networks work now, saving both the consumer and the broadband provider a lot of hassle. And this would give the broadband provider a lot more flexibility–they could, for example, charge slightly more for multiple computer logins, or they might have a “guest” option where somebody can pay a dollar for 24 hours of access (or whatever).

    In any event, I think there are plenty of business models available if casual WiFi sharing starts to eat into broadband providers’ bottom lines. Figuring out which one works the best is the reason telecom execs get paid the big bucks.

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