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July 17, 2006

Podcast #10: Dave Vucina, Wayport

Exec DavevWayport has built Wi-Fi into 8,000 McDonald's, and I talk to Wayport CEO Dave Vucina about that in this podcast [38 min., 19 MB, MP3]: The hotspot infrastructure company has reached a goal set two years ago at the introduction of its Wi-Fi World plan. Typically, hotspot operators resell access to their networks for a per-session or per-user fee that aggregators and resellers pay them. Wi-Fi World proposed a single, fixed monthly rate for an entire network (on a per-location basis) that would be invariant based on use.

AT&T (then SBC) was the first firm to sign up, and acts as a broadband and services provider for Wayport, too. Nintendo followed this last spring as a way to offer free Wi-Fi access to players of its DS system. With a per-session fee, costs get higher with more usage. With a monthly per-location fee, the more users, the cheaper per-user cost.

Vucina and I talk about a range of hotspot operation issues, including how Boingo's acquisition of airport wireless infrastructure builder Concourse Communications affects Wayport's model, how Wi-Fi World has played out, the growth of the applications business, and how Wayport might get into the locally cached content business. It turns out, it's all about applications, as in many other maturing wireless data businesses.

Transcript follows.

Glenn Fleishman: This is Glenn Fleishman, the Editor of Wi-Fi Network News, and welcome to Podcast #10, recorded Monday, July 17th, 2006. In this Podcast, I speak to Dave Vucina, who is the Chief Executive Officer of Wayport. Wayport has a fairly remarkable history - they were for a while the last man standing, although now they have other competitors, of course. But Wayport was founded in the late 90s to provide hotel high-speed Internet access and was one of the earliest players in the Wi-Fi market offering public space Wi-Fi in hotels and public areas, restaurants, cafes, and airports, especially very early. Most of the companies that existed--I think practically all of them disappeared in at least the form they were in in 2000, although some of them were acquired and transitioned into other formats. The only competitor that Wayport had in 2000 that's still in business is Surf and Sip, which has a very different business model. But MobileStar is gone, taken over by T-Mobile, and other companies you never would have heard of have come and gone. So, Dave, welcome to the podcast and congratulations on being last man standing.

Dave Vucina: Thanks, Glenn, good to be here.

Glenn: I guess I shouldn't say last man standing. There was that early wave of hotspot operators, some of which were highly undercapitalized, they had a really tricky period in the capital market when the dot-com crash came, and Wayport was differently positioned even in 2001 than those other firms were, I imagine.

Dave: We really were. I think tremendous insight by our founders around wireless and 802.11 technology, but they also realized this early when they had this vision. And so I think in the early days of Wayport even though the vision was around wireless, it was all about enabling the venues for high-speed connectivity around what people were aware of and enabled with, which was more of a wired connectivity back then. So that helped us a lot, and a lot of work on the business models in the early days kept us going through the dot-com bust, so it was good from that standpoint.

Glenn: Well, if I recall correctly, too, you all had a real revenue stream at a time when other companies were struggling with that because a lot of other firms had bet on the hockey-stick of Wi-Fi happening very early, maybe betting too far in advance. And for Wayport, you had wired what they call "HSIA" in the industry, High-Speed Internet Access, in thousands and thousands of hotel rooms even in 2000 and so there was a revenue stream from that that wasn't dependent on Wi-Fi, if I recall that correctly.

Dave: That's exactly right, Glenn. I think that speaks to the entire point, that HSIA was something that people could always use, knowing that you could always move that over to a new technology, and it became accepted. And I think the trick with this is being early enough to where you can take advantage of being the early provider with certain types of technologies but not being so early that you get too far ahead of the market and therefore struggle from a business model standpoint. So kind of a balance there, and I think the company did it right in the beginning.

Glenn: What I hear from everybody in the hot spot industry in early 2005 -- and I would love your insight on this because I know you've been there all along -- is I heard the hockey stick finally happened. What Concourse was saying about the airport usage, other hotspot operators talking about their usage in public places, that finally something clicked, like the number of adapters, people's acceptance of the pricing structure. Did you see a hockey stick in 2005 where you suddenly saw a month over month increase in usage?

Dave: Yes, we certainly saw an uptick in usage. I think you get into that whole tipping point right where things finally get around the top or over the top and all of the sudden you see an upsurge. It's the same thing with high-speed Internet connectivity for business travelers. There was a time when gee, it didn't seem to be taking off as fast as everybody expected and then the tipping point hit and then it started rapidly gaining traction. And I think it's here with wireless, and I think there's a whole series of reasons for that, certainly the proliferation of devices and hotspots is much greater today and that's happened pretty fast in the past year, year and a half.

Glenn: Now, at times you've given out some numbers about connectivity sessions and usage - do you have any numbers that you're willing to talk about today that express usage?

Dave: Well, I'll be a little more conservative about that, a little bit closer to the vest. While we continue to see the most solid results relative to connectivity, but a little bit closer to the vest in terms of our numbers these days.

Glenn: Ok, I understand that you don't want to write the business model and plan for the competitors, too, I imagine.

Dave: There you go.

Glenn: You're a privately0held firm, and you can keep that. So, let me ask you about a recent acquisition that I thought was sort of fascinating. It surprised me, although I think it makes some sense. Concourse Communications, one of the leading airport Wi-Fi and cell infrastructure builder providers, acquired by Boingo Wireless seemingly out of the blue. Concourse had a lot of marquee airports. They have the tri-state, the Newark and JFK and La Guardia [airports] in New York, they have Detroit, Minneapolis, Chicago's airports, and I know over the years airports became less and less important to your business as you migrated into what we will talk about in a minute, managed service and some of this Wi-Fi World proposal. But how does that affect your business? Does it affect it at all that Boingo as an aggregator has acquired an airport infrastructure builder, or is that just a parallel development for you?

Dave: I think it's a parallel development. I think it's something that Boingo decided was good for their business, and they certainly have a strategy that they're executing, too, and they decided that having control of certain numbers of airports directly was something that's important to their business plan that they've executed on it, and I commend them for it, it's great. But you know, there's lots of venues out there, and we certainly have the strategy that we're executing too, and sometimes an airport could conceivably fall into that, but a lot of times it won't, so everybody executes to what they want to try to accomplish in the market. And I think that in Boingo's eyes this is a good thing for them, and that makes it good for the industry. I think they're a good partner with Concourse, and that acquirement is probably a positive for the industry.

Glenn: I should point out of course, that in the circular nature that is the hotspot industry, of course Boingo's been reselling access to Wayport locations since their inception just about.

Dave: Yes, and I think they'll continue to do that, and provide that and everything says that they'll be different locations, right? The more locations they want to build, they'll do it with the combination of their partners and now directly with their acquisition of Concourse, but I think that part of the strategy probably stays the same.

Glenn: I know that one of the things that Wayport did about two years ago now, was that up until that point, the model for infrastructure builders such as yourself, that were not really emphasizing a retail brand, although you've got a retail brand and people can purchase service from Wayport if they wanted. But really working with aggregators and partners to make sure their brand is pushed foremost. The strategy had been I think up until that point and it continues for most companies in a lot of locations. That usage by someone roaming onto another network is a session fee. There's some amount of money that gets paid because of an individual user using a session. So if Boingo has someone come on to Wayport's network, there's a fee settlement for that session.

Will you introduce this concept that you label Wi-Fi World, that seemed like a very different idea, with minimum per-location fees for venues? I know McDonald's was the first partner in that plan. That seemed like a real departure from what was then the strategy that instead of paying per user session that someone who wanted to gain access to the Wayport Wi-Fi world network would pay a system-wide fee and pay this monthly fee regardless of usage. So very low usage may not be very good on a per-usage basis, but extremely high usage could be exceedingly cheap for a firm. How is Wi-Fi world played out? I know initially McDonald's was going to be the first partner under that model as a location, and AT&T (what was then SBC) signed up as both a partner to provide some infrastructure services and as a reseller, how was Wi-Fi world played out now?

Dave: I think pretty well, Glenn. You know, one of the challenges with any kind of large firm like McDonald's is getting a volume and a number of stores up to where you can market a plan like Wi-Fi World. I mean, to market that venue as a national kind of brand, you couldn't do an effective job from a marketing standpoint if you had a 1000 or 1500 locations. We're just now getting to the point. I think we've got about 8000 McDonald's installed now so what's happening is the venue's evolving, which will be pretty exciting. You know, it's been a learning process for us for two years. I think it's the world's largest and fastest deployment of hotspots on the planet, so that's been a challenge in itself, installing 8,000. But we have two very good partners right now: AT&T, and we also announced a new partnership with Nintendo around the Wi-Fi world model. That was meant to really qualify the people that wanted to get into the business of roaming at that level, and also take and also take care of the mental gymnastics that go with their pricing plans and their marketing. Meaning that, with a fixed fee, they could pretty much market it any way they wanted without having to worry about payment on a per-session basis and whether usage would destroy the integrity of their model. So, that was the value of it.

Of course, that's just one phase of the whole roll-out of the McDonald's brand, too. I think, as you know, that there's a base McDonald's fee that goes with the roll-out of the stores, that makes a lot of sense to them. And then there's also walk-up users. Where people can just kind of walk into a McDonald's and use the venue. Then, the other dynamic aspect of our deployment into venues like McDonald's is the whole private application side. There's two pieces to it. What does the public want to do on your wireless network? And you have to address that public access. But what does the venue want to accomplish on the network? And developing applications around the private side is an exciting part of our business, too. Which then results in a fee being charged to the store. Again, one that makes sense to the venue and to Wayport, and another way to drive revenue and drive the business model.

Glenn: If I can revisit some things that were talked about two years ago. I'll give you kudos because I believe two years ago, the number was about 8,000 stores within two years. So, it's nice that you can revisit that and say, "Hey, we hit the mark that we said we were going to." [laughs]

Dave: Yeah. And that was a challenge.

Glenn: And that was a lot of stores. At that point, the only networks of that scale would have been... maybe South Korea. A couple of large telecommunications firms there had built 10,000 or 15,000 hotspots, or were in the process still of building out networks of that scale. But, yeah, there's only a few networks in the world that are, monolithically, that scale, even now. One of the other things I recall from that period was the idea that you were giving a predictability. You were giving a consistent price to an operator that would be a national-scale operator, conceivably, or a very large operator. And so, when we were talking back then, the idea was you could have somebody, a multi-systems capable operator like Comcast or Charter or AT&T or Time-Warner, whomever. Not AT&T, that's a telecommunications company. I lose track of whose offering cable at this point, I think. [laughter] They're offering TV in some places.

But any of these NSOs or the regional Bells, or other firms that were operating. Even something like AOL, for instance. All these national brands that had the opportunity of paying what would be a trivial monthly fee for access to your network. Not trivial to you, but trivial to them, divided out among the number of users that might apply for this. And I know that, at this point... Again, back then you said, "If we had one operator on this network with the amount of services we're providing McDonald's, then we're above break-even, and so our model works." You don't need to have ten companies of the scale of Comcast involved. So, none of these other companies have signed up. Does that represent a failure in the Wi-Fi World model from your perspective? Do you need these other companies to eventually come on? Were you waiting for the operations to scale now to this point where you have about 2/3 of all the McDonald's retail locations in the U.S. signed up? Is that kind of the tipping point for that market as well?

Dave: Yeah, I think that it probably starts taking on new meaning once you get to a point. And there's about 13,000-odd McDonald's stores in the U.S. Probably about 12,000 when you target for something like this. You don't count some of the stores that are in unique places that are rather free-standing McDonald's. So, we're 2/3 of the way toward getting most of the stores installed. So, I think that you get scale that maybe attracts some other partners who can now market the brand on a more national basis. So, I think you'll probably see some additional activity. And, like I said before, you'll see some new facets to the relationship. But, to answer your question, I think the model and the venue was born on a solid foundation from the beginning. So, we always felt like we had a very solid business model there, and didn't necessarily see this as a volume play. If it came, that would be great. If more partners than we expected signed up earlier, that's great. But, we also went into it with pretty much a business model that was collaborative with McDonald's, that allowed us to have a long-term, sustainable relationship with them. We weren't in any kind of a panic mode in terms of the speed by which partners would come on. Knowing that we were going to install a significant number of venues and it was going to take time, allowed us to put a model together that worked, even if it did. And so I think we're kind of where we wanted to be. It would be nice to have another partner or two, but we think that, for where the industry's at, we'll see more activity in that area in the future.

Glenn: I shouldn't discount Nintendo, obviously either. I imagine that when the company was planning their world-wide roll-out of the DS play system with Wi-Fi as a big component of online play, when they survey, they know in other countries, in South Korea and Japan and so forth, they have some idea of what the networks are and telecoms they're working with. You look at the U.S. and they say, "Well, are we going to get kids to go into Starbucks?" Probably not so much. Kids or young adults are likely to buy DS. But they look at the profile of McDonald's overlaid with Wi-Fi, well, they've only got one company they can go to. When I saw the announcement, I said, "Well, of course. You get Nintendo DS systems brought into McDonald's outlets."

Dave: Exactly. I think that's a real head-turner. The entire Nintendo deal. When you think about it, two years ago we talked about the fact that people would play games online in a McDonald's in the future, with the proliferation of devices. And I think for a long time people thought about especially the retail venues they started thinking about those retail venues being narrow in scope as far as application were concerned. Like email for maybe a person who's driving around in their car during the day. But, it was always about not only that application, but that's a good one but also proliferation of devices that would take place in the future. And Nintendo's a perfect example of that. When making a choice now between which place you go to eat a hamburger, you may, in fact, pick on not only for the fine service and product, but also because you can play your game online. And that's good for everybody, the gamer, the restaurant, and Wayport. And what else will it be in the future, right? If I was on a family vacation and I had a digital camera with Wi-Fi built into it, and I wanted to off-load my memory device, I'm might stop into McDonald's and do that, instead of buying another memory device.

Glenn: Yeah, I wish some of the camera manufacturers would think about that. Because the cameras that I've tested and the ones that are out there that do Wi-Fi right now, frankly, I can say this, I don't have to be politic. I imagine you may have to be. They're right now pretty crummy. Not in terms of their camera features, but they expect to have a host computer on the same network, the only exception being the Kodak Easy Share, which only interfaces with their own gallery. And it seems they missed the whole point of having an arbitrary Wi-Fi network that you might be able to upload to some arbitrary location over.

Dave: Yeah, I think there are those issues. But I also think that when you get into an authentication-based system, you probably need some development work between the partner of those venues and the manufacturer of the device. With the Nintendo [deal], we set up a separate, non-broadcast SSID and then special programs were written, to make sure that that worked as easy as humanly possible with some Wayport footprint. And there's probably no more critical audience than the gamers out there. They really understand what it's all about. I'll tell you what, that was a great test for us, to have gamers go into McDonald's and read the various feedback that's available out there to see if they were pleased or not. And we definitely had high marks on that.

Glenn: You don't have to worry about them being restrained in their criticism. That's probably a nice thing. [laughter]

Dave: That's well said. It's very nicely said, actually.

Glenn: Well, I also think about the voice-over IP market; it's obviously something you have to think about because of the sheer number of locations that you have. And somebody on a family vacation carrying a dual-mode phone, instead of making a cell call from wherever, they walk into McDonald's and if they've got the McDonald's voice plan which I know doesn't exist yet that's going to be an obvious application. The authentication thing is very fascinating there too, because Linksys just came out with a phone that I don't know if you've seen a model of or it's just at least in prototype stage now or on the way out to the market. It's a $350 phone. I believe that's the cost, but it's got a mini web browser built in. So it has some authentication profiles for some hotspot networks, it does WPA Enterprise for enterprise networks, and it's got a browser if you need to type in a few characters for keyboard interface to log in to pay for a fee with a credit card. I mean, that's got to go, right? You've got to have something simpler?

Dave: You bet. Again, for so long we didn't think about all these devices, but how powerful is it going to be when you have national brands like McDonald's that are going to accept all these various devices that are out there? And the development work that somebody like Wayport can provide to make that seamless. So, they're getting better, and we certainly provide the quality service and the infrastructure to make theirs work. Another one is music, right? I mean, I am going to want to download music wherever I go with my music box wherever my music box may be when it is Wi-Fi compatible. I do not want to just be restricted to doing that when I am at home or at the office.

Glenn: We talked about this before and this has become a theme in community networks. I have been interested in how it migrates to community Wi-Fi networks. I have been interested in how it migrates to the commercial world. It is the local network power of having a very, very high-speed local network that can run a raw rate of over 50 Mbps soon much faster versus the Internet back call and no matter how robust you are always going to have a gating factor there. How much gets pushed in the local network. How much do you put on 200 GB hard drives loaded with music that has got DRM licensing that can get pushed to players. How much of that could become a part of what you offer a venue as opposed to providing this Internet pipe.

Dave: I think it could be a big part because you could even get into a situation where it is a better experience at the venue than what you have at home with an Internet connection if you have the proper infrastructure in place. Imagine going to a destination because you have an experience that is even better than what you have at your home or your enterprise. It could be powerful.

Glenn: I keep thinking that is what T-Mobile--I have been surprised that they have lagged because they have so much of the infrastructure. I mean, not to ask you to criticize your competitor of course, but they have so much of the infrastructure in place and Starbucks has been interested in music for so long I have been waiting for them to say, "Come in and get your music downloads 50x faster than on your home network" or whatever the advertising will be.

Dave: Well, I think you are right and I think there are all possibilities providing that you have the right network. I mean, in so many ways that type of infrastructure depending on how specialized it is or how you organized it can in fact deliver what you have just mentioned.

Glenn: I have got a terabyte drive sitting on my desk. I am sorry, it is a half-terabyte, but I can buy a terabyte form factor now that is the size of a hard-cover book and it has already got an embedded system in it. So adding a terabyte to a local network probably not that expensive or complicated, especially given your infrastructure where I have seen the boxes I go out there that you have got room and you are to throw in a big hard drive I would imagine.

Dave: Yes. Because kind of what our vision was a few years ago, we have tried to design things, understanding what we feel is going to be a reality in the future. So having it modular in nature and certainly upward compatible with some of the activities out there, and growing, we have put in their infrastructures there an important part of our systems architecture.

Glenn: Let us make this a segue into a slightly different topic. When Wayport started you have always presented or appropriate to resell brands so people knew it was Wayport outlet if they are in the know, but really if I am in a hotel I do not necessarily care if it is Wayport. When I get the charge on my bill if I use it in a certain airport it says Wayport. But you have almost always been the infrastructure provided and the branding has sort of been optional. Well with the deal that you did now going back almost two years with AT&T what was then SBC, the freedom link network Wayport is the managed services provider for that network of thousands of locations. How does that change your business or does it change your business at all when you have no retail facing brand when you are getting a fixed fee or however your deal works with them, but when you are paid ahead of time you know that every locations will be profitable because you built a business model. How does that affect how you run the business when you have a combination of locations where you are bearing the cost and risk and where you are doing managed services for other firms.

Dave: Well, you know I think there are benefits to both, right? I think in a managed service provider relationship, those people have the tendency to keep you on your toes. I mean, AT&T and our relationship there has made us stronger. They are demanding and they should be. We build up their hotspots and it has been again that has made our company become a better company because we have somebody independent looking over our shoulders and checking on us which is a really good time. But we welcome that kind of a partnership and we look forward to more that are structured that way but long term I think we plan on being on both. We plan on doing what we do directly and having direct relationships contractually with the customer and then we would also like to do our business and do it indirectly where someone else has the direct relationship with the venue and then we serve them from A to Z in terms of operating these superior cost networks. So it works from that standpoint. You cannot win all the business but imagine potentially not winning a venue but still being able to serve it and grow your business and build your business from it. So that is the way we have looked at it and it has worked out for us great and we would welcome more partners on the likes of an AT&T.

Glenn: You used to have a number of different sectors I think that a different level is an importance for you. So airports will be very, very high volume locations that were expected eventually to pull in, enormous numbers of sessions, hotels are sort of a varied market and cafs, and that was always probably the least aspect of what you are doing with the restaurant or a caf market. And now you have got this kind of lion share right? You have got 8,000 McDonald's. You have got fewer airports in your portfolio than used to be because there have been some changes and that has obviously been de-emphasized in what you are doing and you have got managed services for AT&T which is largely UPS or Barnes & Noble and Caribou Coffee and a few airports for them I believe. Are there airports in the managed service part of the AT&T network?

Dave: Yes there are. I think I want to say go and I had to check on it but I think we have got four or five with them through managed service partnerships.

Glenn: I know this is confusing, of course, because they bought Cingular 60% owned by AT&T which was then SBC. Cingular had from its AT&T wireless acquisition picked up airports and train stations and I know that is not fully integrated into the AT&T freedom link network. I do not believe it is fully integrated yet into that network other than in those other locations.

Dave: It is getting close.

Glenn: That is the ultimate thing. It will buy BellSouth and it will all come into one great lump. But I was going to say so there is sort of a different emphasis. It seems like on your network now where you have these very large pools of specific change or types of business. Does it make it harder to get in to other locations as the hotel business become de-emphasized or different as that market has evolved? How does this different sectors change?

Dave: Well, I think that hotel business is still a major part of our business and there is really good business there. But we are enhancing it actually. I think the future for us is more about what we spoke about earlier and that is being more to the hotel than just a high-speed Internet access provider. So what we are interested in at the hotel is what are all the things that your customer base are going to want to use a network for, and then what are all the things that the venue itself, the hotel, could utilize a network for. You may have read about it that a few months ago we installed the Voice over IP System in The Mansion at Turtle Creek in Dallas over our network, and that is actually an interesting application because the Voice Over IP System is for the employees at The Mansion Hotel not for the guests.

Now that is a great application too - a guest checks into a room that may have the ability to use Voice Over IP, but imagine the employees and kind of the application stands around the Vocera wearable Voice Over IP technology. We have a partnership with Vocera where employees at a hotel can utilize a badge or a lanyard and wear a communication device replacing cellphones or walkie-talkies or pagers or whatever else they use and they can run it over our Voice Over IP Systems.

So that is a great private application that serves the venue and there are going to be a host of those, whether it would be kiosk check-in. I mean, I cannot imagine going to an airport without kiosk check-in. I am sure it will not be that long before that is just the way we will check in to a hotel everywhere. It has already started. We play in that in terms of running that activity over our network and organizing it and managing that information. So all those private applications and then all the public applications, but also people are going to want to access on that network besides high-speed connection. How could we serve up content, the concierge services, that kind of data, in an organized way? How can we deliver music and make that available and easy? So there is a whole host of things that I think that you will see us working with the hotel on, because for us it is integrating all the things the public wants to access on the network and all the things that the family wants to access.

It really stems around three things. It is to enhance the capabilities of the venue. So that is one of the major things we want to do when we deploy a network. We want to enhance their capabilities but we also want to lower their cost of doing business. So enhanced capabilities, lower the cost, and then the third, provide a lifetime customer value experience. So when an intended user goes into a McDonald's today they feel better about that venue because they were able to play their games online. That is just one piece of gaining that customer lifetime from McDonald's. I mean, it is a digital age and people want to live when they are mobile just like they do when they are at home or their enterprise. And so we could help do that for venue like a McDonald's or a hotel. So it does three things. Enhance the capability, lower the cost, and provide lifetime customer value, and that is really why we are deploying our technology.

Glenn: What has been interesting about watching the maturation of the entire wireless data industry has been for each market they get served is -- I am hearing that from everybody now -- when I was talking to a broadband-over-power-line firm a few days ago and they say, "What we discovered is really the smart services we provide to the utility are maybe going to be a bigger part of this than the broadband to the customer." That is useful and that is kind of a public face. Or I was talking to AirCell which won the air-to-ground spectrum licenses for in-flight broadband in the US and they say, "Well, we have got a huge amount of operational work we can do for an airline that enormously reduces their cost, improves their awareness, helps the plane become a smarter plane, and on and on."

So it seems like the maturing of the industry is that hey the public part, which was the sexy part that attracted investors -- I mean, like I say Wayport not necessarily in that market because you would already had been in a hotel market, but a lot of the companies that boomed and bust in 2001 they were focused entirely on the public part. And this next wave or the maturation seems to be focused equally on... I mean, what you are providing to the folks at The Mansion at Turtle Creek is a pure enterprise service. They are a medium-sized company that happens to be a hotel and you are providing what would traditionally be a system integrator service for them because you are already going to be there.

Dave: Yes. That is a tremendously unreserved market, especially around a lot of the technology that we deploy today. Who is better to manage and operate that for a hotel than a Wayport who has years of experience running these networks. And especially the whole hi-fi technology piece. I mean, it is tremendous technology for the types of things we are talking about.

Glenn: So you get rid of all those walkie-talkies that all of the staff has to walk around with. You have the Vocera system; the Seattle Public Library even deployed that because the new central library is large enough just to find people in the building [is difficult] and in a resort scale operation I imagine that using Vocera instead of single-channel walkie-talkie blaring system (there has got to be a nicer word).

Dave: I think you are dead on and you are right on. It is leading edge. It looks modern for the customer. It is the image they want to portray. It is location based so it has productivity linked in to it and it is wearable hands free, which in that environment hands free can matter in a lot of situations. I mean, here is Wayport and Vocera partnering to make that a reality and how many more hotels would enjoy the benefits of that. And that is just one application on the private side. We could probably sit and start listing a half dozen to a dozen that we will see in the future. We plan on having the infrastructure in place and having the relationships in place to be able to leverage that network, which is the most economical way to drive the business model. I mean, leveraging a network rather than having four to five different networks in there is a great strategy for everybody. The hotel wins, Wayport wins, and their customers win.

Glenn: Well, let me ask you the final question. This is the billion-dollar question, I think, which is: With the rise of municipal networks, metro-scale Wi-Fi networks, and wireless networks, is that going to challenge Wayport's ability to sign up hotspots and create a hotspot service? Is Wayport going to get into the metro-scale service which is kind of outside the realm of what you do now, especially as we talk about this enterprise type services going on? What does this municipal market do for you or do against you?

Dave: Well, let us say it is a pretty fascinating topic. It is a business we are not really in today as we read about it, but it is one that we have an internal group looking at in depth in terms of the business models, the cost to deploy, the players that are getting in that market, what their thinking is, the technology, etc. So we are looking at it very hard but I would tell you that with our experience in the business that we are in, certainly our technology works best inside out versus outside in. I mean, that is just a fact and we believe that passionately.

Now does that mean that there are not business models about to emerge that could be something that we take advantage of? I mean, there could be and we certainly have a sense of reality about us to know that so we watch it carefully. But we ask ourselves the question: Are there significant applications both on the public access and private access side that will be here now and in the future to allow us to grow our business based in the way we are deploying hotspots today? And the answer to that question is yes when you think about the things we can do for a hotel.

Take that Vocera application at the Mansion, how would a muni Wi-Fi system handle that. I mean, that is an inside out application. Take the fact that when you run a credit card for McDonald's we handle the process of that with our backhaul. How would a muni Wi-Fi system handle that? That is an application worked out collaboratively and strategically with our partner at McDonald's as well as a host of other things that we are working on there, whether it be a Voice Over IP application or others, the Nintendo application for public access. There is just an array of applications I think that will continue to drive our business based on the way we deploy.

What we like about muni Wi-Fi and some of the things we are looking at is how is that going to help us with our business. I mean, can that provide connectivity from the hotspots to the Internet the more economical fashion for us? We get excited about that because we can improve on our business model, but I think we have to make sure that we are conventionally is a good business now and in the future being in the technology business. Sometimes you are a quarter away or six months away from reexamining that and that is just kind of a situation you are in, but we checked off the boxes and looked at that hard but we also ask ourselves when we look at this muni Wi-Fis what really is the purpose. I mean, is it really about the last mile?

As I look at what some of the people are doing out there they are really looking to do what DSL fill-in or a replacement for hard-to-reach areas or even an alternative to the way people get home connectivity. If that is the purpose maybe there is something in that but that has no effect on our business in terms of hotspot. You just really have to look at what people are trying to accomplish with them and we feel very confident based on what we are doing and especially with our strategy that we have got a long sustainable business. But, we also want to be able to take advantage of an opportunity as it exist out there and again we are pretty positioned to do that type of thing if we can believe that it works and we can drive a responsible business model like theirs. I hope that answers the question, but that is the way to think.

Glenn: I think this is again part of the maturity of any technology is that you move from everyone being excited about the physical layer, about the network itself and the existence of like a signal or a dial tone and then you wind up at the end with applications. And what you are talking about is, the physical part, no one would say that the physical part is hard. I mean, in a municipal scale there is going to be lots of technical issues which are why everyone is up in arms about it. But it is not hard to build a hotspot, it is not hard to build a hotel Wi-Fi network with a high degree of reliability or a campus-wide infrastructure now. So really all the things that you talked about for differentiation, it is not about "hey, we can cover this area," which at some times used to be. Now it is "we have applications that are going to be very particular and valuable for this venues and they really need to have the reliability as opposed to a best-effort network the way it is being built now."

Dave: That is well said and I think that is exactly it. We seek clarity around our vision relative to those types of things and more and more coming to some extent, you cannot even keep up with some of the things that are coming down the pipe in terms of applications. There are different ways to slice the pie and people will be specialist in different areas. We like where we are at today and we can expand on it. We tend to look for how can this improve our business and we get excited about it. I mean, anything like this is deployed where people are. I am sure it will add to our business in a positive way.

Glenn: And more people, it will mean more consumers that are going to have laptops with Wi-Fi built in it if there is more networks that they can use too because they will want that to take advantage of those applications.

Dave: That is right.

Glenn: Well, thank you very much for your time.

Dave: You are welcome, Glenn. I have really enjoyed it.

Glenn: It has been great talking to you. I have been talking to Dave Vucina, the chief executive of Wayport, the earliest Wi-Fi and high-speed Internet access company that is still in continuous operation. Now with over 12,000 locations through managed services and direct relationships. This has been Podcast No. 10 and was recorded on July 17, 2006. This is Glenn Fleishman, the Editor of Wi-Fi Networking News.