Citing low usage levels, Verizon Communications plans to decommission the 380 free Wi-Fi hot spots in New York City that it had turned on for its DSL customers two years ago.
Fewer than half the hot spots were generating more than 80% of the traffic. "Usage didn't live up to our expectations," a Verizon spokeswoman said. "Customers didn't take advantage of it."
Verizon will instead steer mobile business customers to its cellular EV-DO BroadbandAccess service, which costs US$80 per month. All hot spots will be shut down in two months.
Verizon, which initially planned to operate 1,000 hot spots in New York by the end of 2003, said its plans have nothing to do with moves by Philadelphia and other municipalities to turn on their own Wi-Fi services for residents and businesses. "It's a business decision based on the network not having lived up to our usage expectations," the spokeswoman said.
The Philadelphia city government plans to launch low-cost citywide Wi-Fi access in June. Verizon initially fought the city's efforts, but the two sides eventually came to an agreement allowing the city to move ahead.
With speeds of up to 54Mbit/sec. within a 300-foot radius, Wi-Fi is considered by some to be an attractive offering for mobile business users in hotels, airports, restaurants and on busy street corners. The business model for Wi-Fi hot spots has been elusive, however, since potential users may be turned off by the pricing structure for access as well as by spotty coverage and limited roaming capability.
Wi-Fi pioneer Cometa shut down last year after failing to garner support from carriers to fund its hot spot rollout. But some carriers continue to forge ahead with expansive Wi-Fi coverage. Sprint, for example, recently announced that it added 5,000 hot spots over the past month, bringing the total it operates to 19,000. The carrier plans to have 25,000 hot spots for its Sprint PCS customers by the end of the year.
Also, SBC Communications last week unveiled a mobile VPN service for business customers that allows them to access a corporate VPN from 7,000 SBC hot spots or from a Cingular Wireless cellular service.
Meanwhile, AT&T said it has just over 9,000 Wi-Fi hot spots, while MCI has just over 5,000.