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« Bluetooth SIG to World: It's Our Members' Fault | Main | Schlotzsky's Latest Numbers »

February 17, 2004

STSN and Sprint PCS Roam Lopsidedly; and Whither Cell Companies' Wi-Fi Networks?

STSN and Sprint PCS will offer bilateral roaming on each other's Wi-Fi networks. The hitch? Sprint PCS has two locations, neatly avoided in this press release: I spoke to STSN last week about today's announcement, and while they want to position it as bilateral roaming, it's really a resale agreement from them to the carrier unless Sprint PCS follows through on the plan they spoke to me and other press about last July in which they had originally intended to build 1,300 of their own locations and reiterated in this BusinessWeek article. So far, Sprint PCS has built two Wi-Fi hotspots that they own and operate.

STSN has over 500 mostly hotel properties in North American, and nearly 200 in Europe that aren't covered in this agreement, with a worldwide total of 900 including a couple of hundred properties yet to be built out.

I asked Michael Jones, the senior VP of sales at STSN, whether we would start seeing more of a clearinghouse approach in which networks linked through an intermediary fee settlement system instead of these one-at-a-time peering arrangements. He said, "We are very selective at choosing who we are peering with." Apparently, in testing, they're finding that some hotspots don't offer the consistency they want and haven't secured their systems in a way that STSN requires.

Even though STSN has developed a peering relationship with Sprint PCS, the back-end accounting and authentication is being handled by Sprint PCS's partner iPass, which manages peering relationships among its customers producing accounting but not handling the cash for fee settlement. iPass also resells access to STSN's network to the customers of its aggregated network service.

Jones agrees that industry standards for hotspot operation would make it easier to move to a clearinghouse model. "There has to be some form of governance over those service-level requirements," he said.

Meanwhile, Sprint PCS's failure to build out even a fraction of the locations that they predicted eight months ago seems to be an industry trend. Even though 2004 was finally supposed to be the year of the hotspots, we haven't heard boo from Cometa since they deployed 250 locations in Seattle (their first of many cities, they said, to get that kind of coverage), SBC (which predicted thousands of locations over a couple of years and confirmed that in this BusinessWeek article), T-Mobile (Kinko's, Borders, and Starbucks seems to still be their primary focus), or AT&T Wireless (a few airports and other deals, but mostly reselling Cometa and Wayport). Sprint PCS customers can roam to networks owned by Wayport, Airpath, Cometa, and Concourse.

I spoke to a Verizon Wireless manager by accident a few weeks ago, and he said that the company doesn't plan to do more than resell service. Nextel has its own cards up its sleeves related to the licensed MMDS band.

Other networks like FatPort and Surf and Sip continue to grow at a reasonable rate, but no one is deploying the several hundred hotspots a month that were promised last summer and fall.