WISP ROI for Wireless Access via 802.11

WISP ROI for Wireless Access via 802.11
A strong motivation for the deployment of 802.11 access could come from incumbent ISPs. Most ISPs
have long been dependent on cooperation from incumbent telephone companies to deliver their services
to their subscribers. Most telephone companies offer a competing ISP service. ISPs could free
themselves of that dependency by deploying their own wireless access infrastructure. An ISP moving into
this market space could endear itself with the small business community by offering a dial-a-bandwidth
service in competition with the local telephone company. Bandwidth is usually sold by telephone
companies in denominations of T1 (1.54 Mbps) and the rates range from $300 to $500 depending on the
market and up to $10,000 per month depending on the distance. If an enterprise requires more than 1.54
Mbps, it is forced to buy another full 1.54 Mbps from its service provider at the going rate ($1,000 per
month in many cases). Plans where the business is charged by the megabit or gigabit are also available.
The company will also have to pay a monthly service fee to an ISP to connect to the Internet if that is not
included in its bandwidth cost. Table 8-6 presents a comparison of these costs.
Table 8-6: Cost comparison of services provided by a telephone company versus services available via a
WISP
Component
Regional Bell Operating
Company (RBOC) WISP
Data 1.54 Mbps at $500 a month
(includes Internet access)
1.54 Mbps, less than $100 a
month.
Local phone service $50 per line a month No cost for interoffice calls on the
WLAN to other IP addresses; calls
to PSTN numbers are 3 cents per
minute.
Long distance 3 to 7 cents per minute for all calls Free interoffice calls on the WAN;
other calls are 3 cents per minute.
Offering Vo802.11 telephony services could also serve to distinguish the WISP from its competition and
reduce churn. In addition, system integration services for the installation of WLAN equipment could be
another source of revenue for the WISP.
Viral Growth of 802.11 Networks: Community Networks and the Mom 'n
Pop WISP
Community Networks as an Industry Much has been written in the media about activists who are building
community wireless networks. Wi-Fi may enable the creation of a new ISP industry that does not depend
on local connections controlled by incumbent carriers such as the ILECs in the United States or the
government Post, Telegraph, and Telephones (PTTs) elsewhere.
The scenario for community networks as an industry is likely to play out as it did for the mom 'n pop ISPs
of the early Internet age (mid-1990s). However, just as small ISPs served as a goad for major carriers to
provide Internet service, the grassroots wireless operators will do the same for wireless broadband. The
grassroots operators will also likely serve as fertile technology and application incubators-their operators
and constituents are just the kind of tech-savvy enthusiasts that produce the best and brightest ideas.
One outcome of the community wireless movement will be increased wireless broadband for less-wealthy
areas and other forms of public service. If this happens, some of the promise of telecommunications as a
democratizing force may be fulfilled. Particularly of interest will be the fate of the grassroots movement
outside the United States, where microeconomic, community-owned approaches may be the best option
to provide services to the population base. Strong precedents have been made for this tactic, including
cellular build-out in certain markets. Interestingly, many sociopolitical overtones accompany this
movement-in a way, this kind of movement is akin to the growth of broadcasting in its early years and
implies the same sort of increased freedom of information. Over the next few years, some interesting
stories will likely emerge from the community wireless movement.
Table 8-7: Potential cost savings in household telecommunications costs using 802.11 WISP versus
conventional service providers
Component Conventional WISP
Local phone service (two lines) $50 $50 (assuming use of a cell
phone)
Long distance $100 ($.07 a minute) $0 (assuming all calls are VoIP)
Video (cable versus video on
demand)
$50 $0
Internet $25 $0
Broadband service (DSL or cable) $40 $45
Totals $265 $95
Timing Factors The community wireless movement has already shown real growth worldwide, with many
organizations and individuals seeking to provide blanket coverage over a wide area or community.
Projects have sprung up in Aspen, New York City, London, and many other locations. Another interesting
factor is municipal and state support for Wi-Fi build-out as a source of broadband connectivity for areas
not covered by traditional service providers. One challenge that will impede growth of the community
wireless movement will be economics; until issues of who will pay are worked out, the business model
will not be supportable. This is comparable to the early days of Internet connectivity, where early ISPs
had to find ways to bill customers for service.[

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