Wired On Friday/Mike Butcher: Walk in to the Progress pub in Tuffnell Park, North London and you won't find horse brasses on the walls. It's not just pints they're offering here, but plasma screens linked to a wireless network.
If the well-named Progress is anything to go by, the wireless internet is poised to take off in all sorts of directions.
Progress owner Conrad Palmer rigged up the wireless broadband network inside the pub using a £250 sterling (€361) Meshbox consisting of a Wi-Fi and Bluetooth access point, a Linux server, a Web browser and instant message software.
Not only can passing business people pop in to check their email on a laptop over a quick pint but drinkers can snap each other with camera phones and send the results to big screens positioned around the pub. The bar is also planning to use the screens to let customers know about upcoming events and may send digital vouchers to regulars for discounts.
Although unusual at the moment, the Progress is the latest indication that the wireless Net is leaving offices and homes and heading out onto the street.
Wireless LAN networking for PCs has been around for many years, but it is its spread towards the homes, cafés, shops, hotels, train stations and airports which has created the sort of buzz which used to surround the launch of a new dotcom business. The so-called Wi-Fi boom is currently in full flight, and it all sounds terribly familiar: start-ups hoping to cash in, bizarre business models, all the bubble's old favourites.
Research firm Gartner Dataquest estimates that 15 million Wi-Fi adaptors for PCs were sold worldwide last year, along with 4.4 million access points, known as "hot spots".
Public hot spots - owned by enthusiasts and public bodies - currently outnumber privately owned ones, but the start-ups are catching up. Some 70,000 will appear this year globally, says Gartner. In Europe, that figure will hit 20,000 by 2007, according to telecoms consultancy BWCS. It says the number of sites with active Wi-Fi hot-spots will grow more than tenfold over the next five years. And the money is arriving. Private equity firms are pouring money into Wi-Fi firms - $1.5 billion (€1.3 billion) according to one estimate. Consultants Forrester Research has likened it to a second dotcom boom, with all the ensuing dangers.
But in the US, where much of the hype has originated, the predicted hordes of travelling business people and internet junkies are failing to respond to the "build it and they will come" mantra. Wi-Fi access at Starbucks cafés - a long-time proponent - is attracting less than two people per day per hot spot. Quite how the Wi-Fi networks are going to recoup the cost of investment on the profit of one or two cappuccinos - made to last an hour each no doubt - remains a mystery.
The cost of access is one stumbling block. Prices for surfing from a hot spot in Europe can be as much as €130 a month for the subscription to a wireless provider. And Wi-Fi users are a casual bunch. Travelling business people come and go, but are usually using the hotel or conference network rather than the roadside petrol station or street café.
In theory, it is the owners of the hottest hot spots, the hotels and airport lounges rather than the cafés that are most likely to benefit. But even then, the start-ups look likely to struggle.
Forrester predicts there will be 53 million Wi-Fi enabled laptops and personal digital assistants (PDAs) in Europe by 2008, of which just 7.7 million users will be prepared to pay to use hot spots. Some start-ups, like Broadscape in London, are marketing Wi-Fi free as a way of selling more cappuccinos in London's cafés, banking that pubs and cafés, unlike the Progress, won't work out how to do it on the cheap.
Forrester is not alone in its scepticism. Market analysts IDC thinks the big telcos will simply swallow up the Wi-Fi start-ups in a repeat of the dotcom era, because, unlike start-ups, they have other revenues to fall back on. European Wi-Fi players like eWave, Wifix, WiFiSpot and Visacom have appeared, replacing HubHop, Aervik and Megabeam - acquired by bigger firms in the past few weeks.
Futhermore, concerned that wireless broadband Internet access could eat into their expensively acquired 3G business and communications revenues, big telcos are moving to counter the Wi-Fi start-ups.
O2 is just one European mobile provider planning to roll out about 1,000 wireless LANs across Europe, following successful trials in Ireland and Germany. Its old owner, BT, is even more ambitious - it's planning 4,000 by next summer.
Wi-Fi looks unlikely to turn out to be a wireless pot of gold. Analysts estimated the Wi-Fi market will be worth $2.5 billion in 2007, but IDC thinks it will be just over half that - $1.4 billion.
Contrast that with estimates for global mobile phone subscriber revenue. Market researchers the Yankee Group sees revenue growing from €335 billion in 2002 to €505 billion in 2007, making mobile phone services worth as much as worldwide crude oil production.
But put aside Wi-Fi's patchy coverage, expense and the fact that it requires a PC. The Wi-Fi start-ups also have another, older, enemy in the form of the geeks who simply buy the gear and set up their own "nodes", like the Progress pub.
The British-based Consume.net is one such co-operative, which allows private individuals to register their Wi-Fi node on an online map. Simply dial up the site and see if someone is offering some free Net access nearby.
Last year, a new craze dubbed "warchalking" emerged, with enthusiasts using chalk signs to let passers-by know where free access was available. Faced with a €130 charge at the café and access to the free Wi-Fi emanating from the flat - sign-posted in chalk - above the café, I know which I'd choose.
The policy debate - at least in Britain - is shifting towards the Wi-Fi enthusiasts' side. At a debate last week, the influential Work Foundation called on the British Radio Communications Agency to review its approach to spectrum licensing. It suggested a system of Open Spectrum should be investigated as an alternative to the expensive spectrum auctions of the past which favour companies over the free exchange of communication online.
Fortunes may well be made or lost in the Wi-Fi battles to come, but the internet's spread into the airwaves looks set to continue. It's nice to know that one of the places it started in was a pub.
Mike Butcher edits mbites.com
