"Bubble trouble - Is the 'Wi-Fi' wireless internet boom about to turn into a bust?" This is the headline and subhead that you didn't mention in your posting on this blog.
"Unless Wi-Fi is added to mobile phones, most people will not carry a Wi-Fi-capable device." I agree completely.
"Gartner predicts that the number of hotspots in retail outlets will peak in 2005, and then decline, as uneconomic hotspots are switched off."
Glenn, are we reading the same article?
"Only 3% of tech-savvy American consumers surveyed said they would pay $2 per hour for Wi-Fi access, but 20% said they would pay $1."
Okay, so Starbucks drops the fee to $1/hr. and usership doubles. That's 4 people per day on average per shop, at fewer shops since the ones that don't service the "road warriors" or others who don't regularly carry around laptops or wi-fi enabled pdas, will be closed.
Understanding economies of scale, you realize when your product/service addresses a very small population, discounting has little effect in generating business. There just aren't more people to utilize the discount and you lose any chance for making even a slight profit. If everyone had wi-fi on his or her cell phone, it's a different story. But what's the point broadband on a mini-browser? The Economist is generally a very reliable publication in my estimation. You gave this story a much different spin. Discounting won't bring this strawman to life.