Wifi + Telcos

I’ve been meaning to post this for a while. I was speaking to a friend of mine who is working on creating a community-based wifi network. He mentioned something to me that I found a bit alarming. Apparently when a provider of wireless services (of any type, which seems to include wifi) extends their network beyond a certain size, they need to register as a telco. This means a significant expense for registration as well as covering regulation requirements etc.

This is obviously a huge disincentive for community-based and smaller service providers to enter the market. If we are to see widespread adoption of wifi this needs to change. I say this for two reasons.

Firstly, the current oligopoly of providers means that prices for wifi are currently grossly over-priced for the service provided. At around $12 per hour, this cost is significantly higher than the real cost of providing the service. Until we see significant competition in the space we are unlikely to see a reduction in these rates. (Prices for GPRS data on Australian networks is a case in point – at around $0.02 per kilobyte, these services are largely out of reach for most people except for cashed up corporations or larger organisations). If smaller operators (or perhaps local government) cannot enter the market with a significant offering (that is, a reasonable number of hotspots) then that competition is unlikely to appear.

Secondly, smaller communities that are not commercially viable for larger telcos either because of geographic dispersion (i.e. they’re in a country region) or demographic (the area is economically challenged) will not be able to establish their own network. Wifi is not an “essential” service by any stretch, but for communities wanting to support economic growth, or who can make use of wireless services for community benefit in non-traditional ways, this has the potential to be a huge barrier.

All in all I think it’s important that we find out a bit more about whether community-based networks can exist outside of this legislation or not. I think it would also be interesting to see if there’s some way that smaller operators can get active in the space to provide the price competition needed.