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In this book, Professor Christensen talks, among other things, about disruptive technologies — new products that totally change the competitive landscape of a market and push (or at least threaten to push) established, market-leading products behind. An example in the book is the Intel 8088 processor — which helped launch the PC revolution and moved the entire world from handfuls of big computers to billions of personal computers.
We think that Wi-Fi is a disruptive technology too (and we’re not saying this to be clever or pat ourselves on the back — everyone thinks Wi-Fi is a disruptive technology). More specifically, we think that Wi-Fi hot spots themselves are, or at least can be, a disruptive technology too.
The concept is dead simple — hook a Wi-Fi access point or router up to an inexpensive “wired” broadband connection and offer free or low-priced Wi-Fi access to all passers-by. Why not? You can offer a public service, make a lot of folks happy, and perhaps even make a few bucks.
Up until recently, however, this dead simple equation hasn’t been so dead simple in practice because the cost elements involved in creating a hot spot have been out of line with the benefits (social or economic). Buying the hot spot equipment and broadband access was a bit too expensive to allow most hot spot operators to break even.
This has changed, however, with a combination of an incredible plunge in Wi-Fi pricing (where Wi-Fi routers can be picked up for $30) and an increase in Wi-Fi users (everyone’s got Wi-Fi in their laptops these days). These two developments mean that more folks can afford to offer free hot spots or can make a suitable return on their investment with for-pay hot spots.
But that’s not the disruptive part. Wi-Fi hot spots are disruptive because they offer users a faster, easier, and cheaper means of getting online than anything currently being offered by mobile phone operators (at least in the U.S.). And with new mesh (networks where APs “talk” with each other to extend the network’s range) and metro-wide Wi-Fi technologies hitting the streets, hot spots can become hot zones and compete directly (and effectively) with mobile 3G (third-generation, high-speed mobile) systems, in at least some areas. Add in the Wi-Fi VoIP (Voice over Internet Protocol) technologies we discuss in Chapter 15, and you’ve got something that will make any mobile phone/data operator stand up and take notice. (In fact, they have noticed, and many of them are playing the game of “If you can’t beat ‘em, join ‘em,” and starting their own hot spot operations!)
Chapter 9: On the Road Again with 802.11
A matter of politics
A lot of cities, towns, counties, boroughs, villages, townships, and other forms of municipalities are getting involved in Wi-Fi hot spots. As we discuss in Chapter 1, these local governments are putting together their own Wi-Fi hot spots for a variety of reasons — including economic reasons (that is, attracting businesses and customers to town) — but mainly because high-speed Internet is a public service, like traffic lights, fire fighting, and parking regulation enforcement. (Okay, this last one isn't really a service we support.)
Many of the big telephone and cable service providers, however, don't like this idea at all. They say that they might someday install their own WiFi networks, and if the city is already offering WiFi, that's competition they don't need. The phone and cable companies are also afraid that the municipal Wi-Fi networks might keep people from ordering DSL or cable modem service in their own homes. So they have been spending many many millions of dollars lobbying politicians to pass state laws banning such networks.
To which we say (and we're quoting Col. Potter from *M*A*S*H here): "Horse hockey!" Even if municipal Wi-Fi hot spots were competitive with services from the phone or cable company (and we're not sure we even concede that point), they are not unfairly competitive. In fact, these municipal services might be the only competitor that exists in many towns — and we believe, like the good capitalists we are (Danny went to business school, and Pat majored in economics, so we've got our capitalist street cred going here), that a little competition might be just the shot in the arm the incumbents need.
So what we're saying is this: If you agree with us, and you're feeling like entering into the political process, please do! If your state has such legislation on the docket, write a letter, send a fax, shoot off an e-mail. Make your voice heard. "We want our Wi-Fi and we're not going to take it any more!"
There, that felt good to say. As the bloggers often put it: </rant>.
Ultimately, we think that hot spots will both compete and cooperate with mobile wireless services. But even though Wi-Fi isn’t going to “win” over 3G, it is going to have (and is already having) a significant, disruptive, effect on the market.
Finding Hot Spots