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« Detail on 3G Plans from US Carriers | Main | On the Heels of Cerritos, Spokane Unwires »

March 22, 2004

AMD's Stealthy Rollout Slips Up

AMD's guerrilla marketing campaign to promote free wireless locations appears to have papered over the actual network builders in some cities: Intel has successfully associated itself with wireless hotspots in the eyes of the public through its $300 million Centrino advertising campaign. Its only substantial processor competitor, AMD, is trying its own low-cost strategy, but its guerrilla approach to promoting free hotspots already has supporters and detractors, some of whom claim that AMD has literally papered over their efforts.

AMD's logo started appearing in dozens, perhaps hundreds of hotspots that they list in a directory page of free locations starting about two months ago. They call these locations "AMD Hotspots." AMD collected this list beginning early this year by calling hundreds of free hotspots and asking if they wanted to be listed, according to sources at community wireless networking groups and businesses that received the calls. Venues received a window sticker and some collateral material as part of the arrangement.

The Register first reported on AMD's plans on March 16. I corresponded with Tony Smith, who filed that story, and he said that his sources confirmed that a second-quarter rollout of the directory is planned, which leaves open the question of why AMD has made this page available now.

A spokesperson from AMD, Jo Albers, responded to a phone call about the program via email, and declined to comment on the state of the program, promising more details later in the year when the program officially launches. Albers provided a longer statement to Boston Globe columnist Hiawatha Bray in this article in which she says, "We are supporting businesses that offer free WiFi access to their customers. We're just providing advertising and promotional support." AMD also apparently confirmed this statement in a story on Friday.

Smith of The Register said his sources indicated that AMD might be considering financial incentives for locations to offer service for free, but that at the moment, a team was just trying to find existing locations with which to co-market. Other news reports that picked up The Register story took Smith's note to this effect out of context, and asserted that AMD had funded the hotspots they listed, which our reporting indicates is incorrect.

The sign-up page for businesses linked from the AMD Hotspot home page does indicate additional resources that AMD may offer in the future, including a directory applet (not yet on the site) and promotional events. It also notes that AMD's retail and channel partners could help promote locations. Given the number of resellers of AMD projects, this could help drive significant business traffic to free locations, especially those in the vicinity of these partners.

Intel's Centrino verification program, in contrast, took funds from the $300 million marketing budget for the entire Centrino line to test a specific set of technology requirements at hotspots. According to Intel and many hotspot operators of all scales that I interviewed in spring 2003, Intel sent teams of engineers with elaborate test suites to more than a hundred -- and possibly several hundred -- hotspots around the world.

Many hotspot operators privately praised Intel's program for helping them troubleshoot problems that prevented users from reliably making virtual private network connections or having a seamless connection each time. (These operators declined to be identified by name to avoid exposing their previous networking faux pas.)

AMD's program is trying to get some of the marketing benefit without this testing, but they may also have overstepped in their zealousness to list and sticker locations. In our reporting for this story, some businesses listed in the directory said they never heard from AMD; some said they had turned AMD down but were still listed and received the collateral; while others agreed to be in the directory and are positive about displaying AMD's logo in their window.

The story may have begun in Austin, Texas, where the Austin Wireless City Project has helped dozens of businesses install, operate, and market free Wi-Fi service to customers. The AMD signage did not generally go down well among volunteers and venues, according to Richard MacKinnon, president and chairman of Austin Wireless.

MacKinnon met with an AMD representative, Kyle Odiorne, almost by accident in late December 2003 through a connection with a colleague. Odiorne is the director of mobile marketing for AMD, according to his biography at a conference he will be speaking at. I spoke briefly to Odiorne, who confirmed that he was in charge of the hotspot program, but asked that I direct inquiries to AMD's spokesperson, as is the company's policy.

MacKinnon said he offered suggestions to Odiorne about supporting free hotspots, including providing money for marketing and non-profit incorporation of community groups, and assistance in funding collateral material, such as signage to identify free locations in each community.

The next time MacKinnon heard about AMD, however, was when their free locations started receiving the calls and materials from AMD and signs started appearing shops. MacKinnon said that Austin Wireless was "not on the ball in terms of providing our own collateral," and that "I don’t blame the venues for wanting to hang the sign."

What's disturbed MacKinnon is not that venues agreed to display the sign, which he feels is entirely their perogative, but AMD's behavior reported back to him from Austin Wireless locations. Each hotspot in the Austin Wireless City Project has a volunteer who helps caretake the location. One volunteer objected to the AMD sign placed in the window of one of his caretaker hotspots and removed it with the permission of the owner. The owner then reportedly received a call from AMD saying, MacKinnon related, "if you don’t take your sign down, we'll pull you out of the directory." Others in Austin confirmed similar stories.

MacKinnon also noted that "We know of at least a couple of venues where the venues didn’t agree to do it but they got the signs anyway." Zane McCarthy, the owner of Austin Unleashed, a wireless consulting and broadband operator, has installed and helps runs several free Wi-Fi hotspots in coffeeshops and restaurants in exchange for the promotional value and good will. McCarthy said that AMD signs started to show up in locations he provides resources for.

In at least three cases he knows of, including the Green Muse Cafe, AMD stickers were installed without the owner's knowledge. At the Green Muse, the AMD sign appeared moments before he stopped in. Many of his locations are anti-corporate, McCarthy said, and even display stickers like "corporate coffee sucks."

Chris Tom of AMDZone, a site devoted to AMD, was the first to raise the alarm on the Austin Wireless mailing list (not archived on the Internet) about a month ago. He noted via email that he contacted AMD, which provided some ambiguous statements about not infringing on other people's venues. However, he is still not sure who is responsible for the guerrilla stickering.

McCarthy is considering legal action again AMD, citing his attorney's contention that AMD's actions are a "grievous tortuous interference" as well trademark violation. McCarthy likened it to him taking an AMD processor and sticking his own label over the AMD logo before offering it for sale. Because he receives much of his business through word of mouth in the tight-knit community, he is highly concerned that Austin stickering campaign could cost him business. McCarthy said, "We're considering legal remedy in this case. What I want is a public apology."

In a spot check of several hotspots out of the Austin area, Wi-Fi Networking News found a mixed bag. Paige Kayner, the owner of Aurafice Cafe in Seattle, one of the oldest free locations in the city and part of Seattle Wireless's support network, said she was completely happy with the AMD request and branding. "I don't have a problem with AMD and the free signage," she said. She reviewed her listing on AMD's site and found it appropriate, and said that she believes this will spread the word further about the cafe's free Wi-Fi service.

Another Seattle-area business, Teahouse Kuan Yin, was contacted and agreed to be the directory, co-owner Eric Nordstrom said. Nordstrom told AMD when they called that he wanted to look at the store signage, but found it appropriate and mounted it. Nordstrom said AMD told him that the hotspot directory will improve over time and the program will include promotional tie-ins.

In Chicago, Goose Island Beer Company was listed in AMD's directory. However, the company's CTO Tony Bowker said no one at the pub had spoken to AMD, nor were they displaying the AMD signage. Bowker said, however, that he has no problem with being listed by AMD, as it increases their exposure. "We have no business model [for the Wi-Fi service] so whoever wants to publicize it is fine," he said. Bowker said following an article in the Wall Street Journal recently about Wi-Fi service he listed Goose Island's location on two Internet directories of free hotspots.

Another coffeeshop in Seattle which has offered free Wi-Fi since July 2003, said they had not heard from AMD, were not listed in the directory, and would not display signage for anyone if asked. (The store employee declined to provide her name.)

Several community wireless networking organizers and group heads said via email that the current situation reminded them of Boingo Wireless's launch in early 2002 when the firm listed community locations without explicit advance permission. Boingo recovered from the criticism leveled at them in part by removing locations when asked and later phasing out most informal free locations. But many in the community remain wary of directories that haven't received specific permission as a result.

AMD's plan to promote free hotspots appears to be real, practical, and generally supported. But the company may have slipped too much incomplete information too early combined with an guerrilla stickering campaign in at least one city, which has left some free network developers and retail stores feeling marginalized and overwritten.

McCarthy of Austin Unleashed noted that previously, he had used only AMD processors in his server equipment. "They blew an entire lifetime of good will from me with this one action," he said.

(Note: This story includes reporting by Nancy Gohring. Photograph of AMD Hotspot sign by Richard MacKinnon, used with his permission.)

(Disclosure: Wi-Fi Networking has a financial, advertising, and marketing partnership with JiWire, Inc., which maintains a worldwide directory of hotspots. JiWire licenses this directory to Intel, a competitor of AMD. JiWire's CEO Kevin McKenzie confirmed that as of this writing AMD has not approached JiWire nor has JiWire approached AMD about licensing the JiWire directory. JiWire's directory includes both free and for-fee hotspots.)

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Glenn Fleishman writes about AMD's network of free WiFi hotspots, created the easy way: by adding hotspots to a directory page and placing signs at their locations – even sites set up and supported by free community wireless groups, and... Read More