MAYBE GLENN WAS RIGHT...

by Virginia Postrel  •  Aug 25, 2003 at 2:24 pm

http://www.dynamist.com/393/maybe-glenn-was-right

about Wi-Fi, and I don't say that just because t-Mobile has been less than reliable this morning.

Reader Buzz Bruggeman comments:

The fully loaded cost of offering free Wi-Fi access is less than $6/day. Operating a billable hotspot costs over $30/day. Half this cost comes from building or altering billing systems, plus the endless associated customer care. The millions of dollars already spent on systems to charge Wi-Fi users by the megabyte, minute, etc., will never be recuperated. Next year, authentication should become cheap enough to be part of a profitable Wi-Fi offering, but for the foreseeable future, authorization and accounting remain dangerous distractions.

Come to think of it, I have had to call t-Mobile's customer service number not once but twice in the month or so I've been using the service. Providing that sort of service, which makes up for various bugs in your system, is expensive. (It's also why Amazon takes a bigger cut from Tip Jar contributions than PayPal does.)

Buzz also sends a link to this discussion of Wi-Fi business models. Like Paul Boutin's Wired article, it mentions that Schlotzky's is installing Wi-Fi. Adding to Paul's piece, reader George Columbo notes that "Panera Bread is one chain that is implementing the approach suggested in this piece and I believe they're doing it somewhat successfully." (Here's an industry item, with comments on Panera's service.)

Panera and Schlotzky's are both examples of the fastest growing segment of the restaurant industry: "fast casual," where you don't get waiter service but you do get good, fresh food in an aesthetic environment. (Schlotzky's is currently revamping its stores to bring the environment in line with the food.) Fast casual places make the food fast--good if you're hungry or just have a short break--but, unlike the traditional McDonald's approach, they charge enough to allow those customers who want to to linger. My favorite example is the Texas chain Cafe Express--highly recommended. For reasons that are hard to articulate, Wi-Fi service fits the "fast casual" atmosphere. Somehow it seems so obvious that technology, communication, free-agent employment, and aesthetics go together.

Correction/update: Buzz points out that the quote above, while it was in his email, was from the article he cited.