Wireless access slow to catch on here

By John Duchemin
Advertiser Staff Writer

Wireless Internet access is a reality. The technology exists. Millions of consumers have Internet-enabled laptops and cell phones that are getting cheaper by the month.

Tim Cooper of Mo'ili'ili surfs the Internet on his laptop computer via a wireless network at the Netstop Cafe. The café charges $4 per hour for the service; other places offer the service for free, while still others offer monthly subscriptions or daily fees. Eugene Tanner • The Honolulu Advertiser

Internet visionaries have long talked of a wireless nation, where cables virtually disappear and the World Wide Web is accessible on the freeway, in the airport, at the coffee shop, at school, in the park, on the beach, in the hotel.

In Hawai'i, tourism officials and wireless experts imagine a "wireless Waikiki" that would allow seamless Internet access for cell phones and laptops as visitors walk down Kalakaua Avenue, enter restaurants and shops, go to their rooms.

But publicly accessible wireless Internet — "wi-fi" in geek speak — is still hard to find. A few hotels offer it to paying customers; a few coffee shops sponsor free "hot spots"; some Internet cafés rent it out by the hour; the University of Hawai'i is slowly rolling out a network; and some schools have it.

Those represent a few small specks, however. Until several daunting technical and commercial challenges are met, the spread of wi-fi in Hawai'i will likely be slow, experts say.

"Lots of large companies with money and assets are deploying wireless networks, but the struggle is in finding a revenue model," said Mike Browning, founder and president of Honolulu wi-fi company Pacific DirectConnect. "The main question is: You can do this, but can you make money off of it?"

Wireless companies face the challenge of creating a market from scratch. Consumers have embraced the Internet as a source of news, e-mail, shopping and entertainment, but do they need to carry it with them everywhere? And if so, how much will they pay for it?

"That's a fundamental issue that needs to be cleared up," said Tareq Hoque, Hawai'i-based chief executive of Landmark Technologies, a newly funded company that makes wireless infrastructure components and has a clear incentive in seeing a wi-fi market emerge. "Who pays for wi-fi? How do you charge for it? There's several competing ideas, but unfortunately it's going to take some time and money to figure out which model works best.

"Until that gets resolved — and not just locally; this is a global issue — there will be difficulties mass-deploying the technology."

The challenge is evident in Honolulu, where providers are experimenting with wi-fi business models.

Some charge for use, either monthly subscription fees or daily or hourly access. Netstop Cafe in Mo'ili'ili charges $4 per hour to use wi-fi.

Among the few hotels to offer wireless, Hilton Hawaiian Village is the only one that charges. The service is available for meetings and conventions, such as the

Pacific Telecommunications Council, which was "100 percent wireless," according to Hilton spokesman George Hayward.

At other hotels, wi-fi is free but restricted to guests. UH and other schools restrict access to students, faculty and staff.

Other places offer wi-fi for free, such as Gourmet Express, which operates two eateries in the Kahala Mall food court.

Gourmet Express has let Pacific DirectConnect install a wireless "access point" — a two-way transmitter and receiver box that plugs into a phone line — at the Panini Grill sandwich stand. In exchange, Pacific DirectConnect will broadcast a Gourmet Express logo to any wi-fi users who log on at Kahala Mall.

The goal: Lure wi-fi users who are probably sitting a few feet away, said Lisa Bos, owner of Gourmet Express Inc.

Pacific DirectConnect's Browning believes free public wi-fi is the way to go. Businesses gain customers through on-site advertising, and the presence of a free hot spot will draw users as it becomes known. The Panini Grill hot spot went live only a few weeks ago and was not heavily advertised — and already there's a daily crowd of about 10 users who log on for about half an hour, Browning said.

"You'll see someone open up a laptop and notice they have Internet access," Browning said. "We haven't made any announcements; a lot of the notice is word-of-mouth."

How does Browning's company make money on it? That's the question that has befuddled wi-fi aficionados.

So far, Pacific DirectConnect derives revenue from its hotel clients — Halekulani, Hilton Hawaiian Village and Turtle Bay Resort — by charging for installation and service. But it's not getting a cent from the four hot spots it has installed in Kahala Mall, Cove Bar at Ala Moana Center, Honolulu Coffee at Tamarind Park, and Paradise Cafe in the Davies Pacific building.

Browning hopes to generate profit through online advertising — links to local media on users' welcome screens, for instance. The business model is unproven for wireless, but Browning thinks it makes more sense than charging a fee, especially for a service with an uncertain customer base.

"Again, it gets back to, what's that revenue model?" he said. "We're not convinced that pay-as-you-go will work."

As businesses try to tease profits from wi-fi, engineers are confronting some of the technical challenges that have impeded the technology's expansion.

Compared with wired Internet, wi-fi is slow and temperamental, though speeds have picked up. Initial technologies have been ill-suited to widespread indoor deployment, with signals deteriorating quickly when confronted by walls and other barriers, including furniture.

"One challenge is presenting value to people," said Magdy Iskander, director of the Hawai'i Center for Advanced Communications at the UH College of Engineering. "If wireless is not adding significant value, if it's a slow and unreliable transfer at low bandwidth, then why would people use it? The only reason it's become more popular now is the bandwidth has become wider. But that requires new technologies."

Another barrier to a widespread public wi-fi network is the difficulty of security and control. In an age of hackers, wireless providers are loathe to let just anyone on their networks. They fear being held accountable for damage caused by malicious users.

"People have become a lot more cautious than before," said David Lassner, manager of information technology services at UH, which offers outdoor wi-fi through 50 hot spots at the Manoa campus. "It used to be you could go to an airport, turn on your computer and get Internet access without anyone actually noticing it. That's rare these days. People who install wireless are much more aware of how not to inadvertently create a public hot spot."

Experts say the wi-fi realm undoubtedly will grow. New laptops increasingly come equipped with the latest wi-fi hardware and software, and new generations of mobile phones and hand-held computers are often wi-fi enabled. In cities such as San Francisco, thousands of hot spots have popped up.

But in Hawai'i, a wireless island is likely years away.

"Hawai'i isn't particularly far behind anywhere else, but we're not ahead, either," Iskander said. "We've got to get on the ball and develop a real business model for making this work."