/ business

Free Wi-Fi & Profitability

Inspired by the recent 2Story blog post on Wi-Fi I’ve been prompted to think about how Wi-Fi has evolved in recent years. Over the last few years, there have been significant leaps and bounds in the availability of internet access in public areas (“hotspots”). In my hometown I remember seeing the expansion in availability of public Wi-Fi stretch from one of the locally-owned coffee shops to the local chain coffee shops and bookstores before I graduated from high school. Now, I drive through on the way into town and see McDonald’s “Free Wi-Fi” sign displayed proudly under their sign. This amazes me.

Now, it is no secret that Wi-Fi is not free at all hotspots. The most bothersome example for me, personally, is Starbucks. The closest coffee shop to my house at home is a Starbucks, so it’s a pain in the butt when I want to go somewhere to work because it means I’ve got to go across town to get to a coffee shop with free wireless internet access. From what I understand, they have started allowing individuals to comment when they purchase a “Starbucks Card”, but it’s still another hoop to jump through to get my internet access.

I am not oblivious to the fact that internet access costs businesses money. In fact, knowing the broadband access solutions that are available in most localities, I’m willing to bet that there are significant price increases over what individuals like myself pay for internet access to our homes. Additionally, business have to worry about the problem of free riders who do not pay for the product, but use the internet access. This complicates the problem when there are limited access resources available, and paying customers are not able to get onto the internet. However, if they charge money to their customers (on top of the product) odds are that a lot of people like me will opt to travel a little further rather than pay more than the cost of my drink for internet access. So, then, what does the well-meaning business do to preserve ease-of-access to customers?

Now, as I’ve implied, the win-win situation is when the customer is able to get free internet access only after purchasing some of the business’s product. My proposal is to remove the barrier between the cash register and the Wi-Fi Access Point. Consider the following:

In this scenario, each user receives a unique access code that is linked to their receipts. This means that individuals who are coming in to buy the product can access the internet while limiting the access to individuals who are free riding. There are two weaknesses that one might pose: the first is the difficulty of the actual implementation and the second is the loss of community as a result of requiring users to verify that they are customers. I will answer the question of community first.

It isn’t rocket science to figure that if a group of high school or college students are going to gather to study (coughfacebookcough) together, it is unlikely that every individual is going to go up to the counter and buy something from the store. This is why I suggest allowing each access code to be associated with more than one device at once. So, if Fred and Sally want to study facebook together and Sally doesn’t want a drink, Sally can use Fred’s access code to gain internet access.

Now, the final point for me to discuss is the technical implementation. The University of Georgia has implemented a campus-wide wireless network system called PAWS that connects to the University’s central login system to authenticate students and grant them access to the wireless networks on campus. Without going into too much technical detail, I would suggest that the time it would take to set up a smaller scale version of this would pay for itself by encouraging individuals to be patrons at those businesses that provide free internet access.