N.J. Cable Operators Testing ‘Free’ Wi-Fi

Published April 1, 2009

Moving into an area where many city governments have failed, Comcast is testing a free wireless Internet service for its subscribers in parts of New Jersey, collaborating with a fellow cable operator.

Comcast is partnering with Cablevision Systems, which offers free wi-fi in its Connecticut market and in Long Island and Westchester, New York. Comcast will complete its wireless rollout in New Jersey by early 2010.

The collaboration is meant to extend the reach of each cable operator’s wi-fi by making it possible for a Comcast customer to access the company’s wi-fi in certain Cablevision markets and vice versa. Comcast will provide wi-fi access to its customers at select New Jersey train stations, the company recently announced.

Competition Improving Service

“This [arrangement] makes sense,” said Jeff Kagan, an independent telecom analyst based in Atlanta. “This is what AT&T is doing in offering their nationwide wi-fi connections in places like Starbucks and McDonald’s for free to existing customers in order to keep the customer in a very competitive marketplace. This has been very successful.

“We have seen government run wi-fi tests in a variety of cities, but they inevitably fail,” Kagan added. “It takes companies to compete with each other. Perhaps the government can have a role in the markets where companies don’t compete, but that should be the limit. Customers should get access. Companies should compete for it. In the few areas where this does not happen, then the government can step in. It would be better than nothing.”

Successes Could Halt Muni Wi-Fi

“This is logical,” agreed Scott Testa, who teaches marketing at St. Joseph’s University in Philadelphia. “The municipal wi-fi initiatives that were started by Earthlink are dead. Comcast is following a model that makes sense.”

Testa expects other providers, most notably Verizon, to enter markets soon and offer free wi-fi to customers who already have other services.

With the failures of municipal wi-fi in Philadelphia, Anaheim, New Orleans, Aurora, Illinois, and several other municipalities, Testa thinks other attempts will likely come to a halt.

Cities Are ‘Spooked’

“With the economy the way it is, it would be very difficult for a municipality to tell taxpayers and voters that they’re spending money on municipal wi-fi when people’s minds are on things like public safety, schools, road maintenance, and other things that are more important than universal Internet access,” Testa said.

“Municipalities are spooked,” Testa added. “They’ve seen what’s happened in other localities, and they want to prevent the same thing from happening to them. They’re more likely to go to the traditional cable model—at least that way they’re earning money from franchising fees.”

Testa recommended granting multiple wi-fi licenses to multiple providers, thus enabling municipalities to maximize their franchise fee potential.

Phil Britt ([email protected]) writes from South Holland, Illinois.