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« Wi-Fi Sparks Resort Competition | Main | Coverage of WPA Key Choice Weakness »

November 7, 2003

Pittsburgh ISP Launches National Hotspot Footprint

Telerama wants to take its local experiment and push it across the country: This Pennsylvania company has 8,000 DSL and dial-up customers, and 75 hotspots with 600 subscribers. They believe they've learned enough about usage, cost containment, and deployment to take their local hotspots model and deploy nationally. Today, they announced that they're spinning off a privately owned firm called Telerama Wireless Corporation for this purpose.

I spoke to Telerama's president, Doug Luce, a few days ago and asked him how he would cut through the clutter of other companies seeking the same venues -- often venues that had been approached time after time and often turned them down.

Luce said that Telerama's hotspot model has Telerama paying all costs for equipment, installation, customer service, ongoing maintenance, and bandwidth. The site operator pays nothing and receives a revenue share. Luce said that the company had brought the entire cost of installation down to about $500 and their monthly recurring costs were just $50. Luce said that they purchase the Linux computer at the heart of their system for $30 by the palette-load, while a DSL modem is $60 at their volume purchasing, and the access points (a generic off-the-shelf dumb unit) is under $50.

He estimates that three monthly subscribers at a location recover ongoing operational costs. Telerama has worked with Covad to provide their DSL service in Pittsburgh, and will be working them nationally as they roll out service.

Telerama's pricing is somewhat unique: they offer a combination of unlimited dial-up and Wi-Fi service at their hotspot network for $30 per month. National dial-up service is provided by Dial-Up USA, which resells access to several national networks, providing multiple numbers in each city served.

Subscribers to Telerama's DSL service, which will be rolled out alongside the hotspot offering with Covad providing the installation, will be able to add unlimited DSL service for $10 per month to any level of account. A 24-hour session on a pay-as-you-go basis is $5.

Telerama Wireless is close to announcing arrangements with Wi-Fi aggregators, but is not yet ready to release names. With aggregation, their hotspots will be available to members of these associated networks.

Luce believes that their experience over the last 2 1/2 years in Pittsburgh, a tight control on costs, and their "we pay everything" model will allow them to move rapidly into cities, picking up coffeeshops and similar venues for their audience.

Telerama Wireless's ideal customers, Luce noted, are students, local techies, and the free-agent nation, as well as the windshield warrior: an intra-city traveler, not the jetsetting road warrior targeting by firms like Cometa or Wayport.

With this additional entry into the national market, more price pressure will be placed on the current footprint, which may make it even easier for hotspot operators to finally agree to a comprehensive roaming plan.