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« Once Again, It's All about the Utility Poles | Main | Ryanair Plans In-Flight Calling »

July 27, 2006

Tully's Brews Free Wi-Fi

One of many Seattle-based coffee chains switches to free Wi-Fi: The Seattle Post-Intelligencer reports that Tully's will turn 79 stores from fee to free on August 7. Tully's has quite a history with Wi-Fi. They signed up with Cometa a few months before that firm went under, and days away from shutting down their Wi-Fi network, they partnered with NetNearU. That back-end enabling firm didn't operate any locations, and had to reassure their partners that they weren't becoming a hotspot operator.

NetNearU will continue to operate the service, with Tully's paying an undisclosed fee. In many cases, hotspot operators charge $50 per month for managed service with significant discounts for multiple locations. Customer service and technical support calls made by the stores or by the store's customers can be charged on a per-incident basis or on a metered basis to the operator. Service currently costs $3.95 per day or $19.95 per month.

I have heard increasingly frequently in recent months from various parts of the industry (venue, operator, and other) that the cost of charging people for service when it's a relatively nominal amount is often completely outweighed by the cost of billing and the high expectations rendered against the service. There's also a loss of customer when the customer has to choose between free and fee, or among fee-based locations, whether hotel, coffeeshop, or even airport. (Regional airports have started using free Wi-Fi as bait.) With direct revenue not top of mind, it's easier to pay a flat rate and allow customers unlimited usage rather than receive a small trickle of income and have customers have to think about it. It's friction.

Tully's will provide free Wi-Fi in 79 stores in California, Idaho, Oregon, and Washington. They have a handful in Arizona that are apparently not currently offering Wi-Fi nor will do so in the near term. In the Fremont neighborhood around my office in Seattle, we have several independent and chain coffee shops, from an almost literal hole in the wall to a couple fairly giant indies. T-Mobile is about three doors down from Tully's on the main drag (Fremont Ave N.), with a conveyor-belt sushi joint between them.