March 25, 2004

Wi-Fi Hot Spots

Chevron, Ford, Pizza Hut, and Wendy's, to offer Wi-Fi Internet access to consumers?

Hughes to launch nationwide hot spots

Company will leverage satellite system

By Ephraim Schwartz March 24, 2004

Hughes Network Systems on Tuesday unveiled plans to launch a nationwide WiFi network. The company intends to leverage its current satellite communications system, DirecWay Broadband, which serves corporate customers such as Chevron, Ford, Pizza Hut, and Wendy's, to offer Wi-Fi Internet access to consumers.

Hughes would add an access point to the consumer-facing portion of a site and use its satellite system as infrastructure. Hughes Network Systems, is a wholly owned subsidiary of DirecTV Group which in turn is owned by News Corp., headed by Rupert Murdoch.

Currently, the Hughes satellite network is used by customers in over 300,000 locations in 85 countries to transmit mission-critical corporate data to and from remote locations.

While the concept of a company leveraging existing real estate and a customer base to add Wi-Fi may be enticing, there is a potential problem, according to David Hayden, senior analyst with MobileWeek.

"If you try to take a system that was designed for one purpose and try to use that same infrastructure to add subscribers in unknown quantities, it could have a significant impact to your core business," Hayden said.

Starbucks, which uses an ISDN line in every location dedicated to prepaid customer cards, opted to install a separate system for Wi-Fi fearing that scenario, Hayden added.

The DirecWay Broadband technology sends downlink data at 600Kb per second to 1Mbps and uplinks at 60Kbps to 80Kbps.

Hughes will become the first media giant to wade into the risky Wi-Fi waters, which could extend the typical scope of Wi-Fi to paid content delivery.

Up until now launching a network of public hotspots has been only attempted by high-tech and telecommunications companies such as Cometa Networks jointly owned by AT&T, IBM, and Intel.

However, according to Jim Gandolfi, senior vice president and general manager at Hughes Network Systems, his company has a distinct advantage over Cometa and others.

"AT&T doesnt have last mile. We own the satellites. There is no middleman with us," Gandolfi said.

Current competitors also must live with what Gandolfi called "a long feeding chain" of partners with whom revenue must be shared while Hughes has a built-in customer base with 300,000 locations ready to be upgraded to Wi-Fi, a national installation service, maintenance, and NOCs (network operating centers) already handling the corporate traffic.

Retail outlets would presumably use the service to extend their brand and bring in additional foot traffic, according to Gandolfi.

The public Internet access using DirecWay Broadband is available now.

Ephraim Schwartz is an editor at large at InfoWorld.

InfoWorld: Hughes to launch nationwide hot spots: March 24, 2004: By Ephraim Schwartz : APPLICATIONS : NETWORKING : WIRELESS

Posted by Craig at March 25, 2004 06:58 PM