This Austin Statesman story ran last week; if you missed it, it's worth checking out: Austin has a thriving Wi-Fi community, many of whom believe that hot spots should be free. One group of volunteers that will set up a hot spot for venue, sometimes using donated gear. I talked to Rich MacKinnon, the founder of Less Networks and a driving force behind Austin’s free networks movement, and was impressed by his passion and drive.
While this article points out that the free hot spots in Austin are often more crowded then the cafes where you have to pay to get online, I still think that ultimately there will be space for both free and fee. The trick will be offering something worth paying for in the fee sites, such as added security or guaranteed bandwidth.