Too Cheap To Meter

The Internet Café is fast becoming a reality --- just not the way we expected.

Way back in 1997, Internet Cafés were the new hot thing. They offered decent coffee, acceptable pastries, a high-speed Internet connection and lots of desktop computers running Windows 95. The price: $5 to $15 per hour for computer time, with extra for the coffee and the food.

How times change. These days in the United States you’ll find few establishments still advertising themselves as Internet Cafés. On the other hand, there are lots of coffee shops and restaurants where you can get high speed Internet access. Even better, the Internet access is wireless --- and it’s free.

One restaurant where I’ve spent hours sipping coffee, eating lentil soup, and reading email is Mama Gaia’s Café in Central Square, Cambridge. Besides being the only community coffee shop whose web site had a photo of a military tank, an advertisement for Fair Trade Coffee, and a JavaScript-enabled “investor relations” button, Mama Gaia’s also has a DSL line and a little Wi-Fi wireless access point.

I’m not one of Mama Gaia’s investors, so I don’t have privy to the company’s finances. But it can’t be much: an Earthlink DSL connection in Cambridge costs just $50/month, or less than $2 a day. The total hardware investment for this setup is less than $450 --- and that’s before hardware rebates. If Mama Gaia sells just two extra cups of coffee a day because of their DSL connection, the circuit is turning them a profit.

Back in the 1950s, the nuclear power industry promised Americans electricity that would be “too cheap to meter.” Nuclear power never delivered on that promise, but the Internet industry has. For restaurants that want to provide wireless Internet service to their customers, the Internet really is too cheap to meter --- it would cost Mama Gaia significantly more to build an Internet billing infrastructure than they would ever recoup from their customers.

Another Cambridge establishment where I’ve had the joy of free wireless Internet access is Carberry’s Bakery & Coffee House. Carberry’s doesn’t have a wireless access point, but a nearby business does. It turns out that if you sit at just the right location inside the store, you can pick up that company’s Wi-Fi network and, from there, hop onto the Internet.

In recent months there has been a lot written about businesses that inadvertently allow their wireless connections to be eavesdropped and even covertly used. All too often, it seems, a business will set up a wireless access point without any security whatsoever and then plug it into their network behind its firewall. This practice is quite risky: it allows practically anyone nearby with a laptop and an $80 wireless card to have the full run of the company’s internal network. Recently, an FBI agent in Boston told me about a New England software development firm that ended up losing $10M in contracts when the company’s internal email was stolen and posted on a website. Apparently, the email had been stolen by an activist who was opposed to what the company was doing; that activist gained access to the company’s network through an unsecured wireless access point.

But granting wireless access doesn’t have to be dangerous proposition. As long as a company puts the wireless access point outside its firewall, would-be hackers coming in through the access point don’t pose any more of a threat than other hackers on the Internet who outside that same firewall. (Alas, the virtually anonymous access afforded by a public access point may pose a threat to other people on the Internet, but it the same threat posed by both US libraries and Eastern European cyber cafes that grant similar high-speed access.)

Because there are so many of these so-called wireless hotspots around town, I’m now in the practice of sliding my Wi-Fi card into my laptop anytime I’m working in a coffee shop for more than an hour. After all, you never know when there might be a nearby access point that’s willing to let you download a few megabits of information.

So I wasn’t terribly surprised last week when I discovered an excellent wireless signal in a Harvard Square Starbucks restaurant. More than a year ago, Starbucks announced its plans to offer high-speed wireless access. But I was surprised when I engaged my web browser: instead of accessing my email, I was presented with an invitation to type in my credit card number. Starbucks, the king of the $4 coffee, wanted me to pay for a service that should be too cheap to meter.

As it turns out, it’s not Starbucks but a company called T-Mobile Wireless Broadband that was trying to reach into my pockets. T-Mobile is actually a business unit of Deutsche Telekom, which purchased the bankrupt MobileStar Network in January of this year. (In the United States, Deutsche Telekom does business as VoiceStream.) T-Mobile Wireless now has 575 locations throughout the United States --- most of them Starbucks, but quite a few airports as well. The company doesn’t officially offer service in Cambridge yet, but the service that was there seemed to work. But the price didn’t.

For a service that Mama Gaia’s can offer for free, T-Mobile wanted me to pay $2.99 for 15 minutes of unlimited service, or $20 for 120 minutes --- not a significant savings. The company would also sell me “unlimited” local service for $29.99/month, or “unlimited” nation-wide service for $49.99/month. But there’s a catch: those unlimited services really aren’t --- the time is unlimited, but if you transfer more than 500 megabytes in a month, you’ll be charged 25 cents for each additional megabyte.

These prices are quite high. Earlier this year I put together a business plan for a similar restaurant-based wireless ISP venture. I gave up on the idea when my research showed that few people would be willing to pay $10/month for this kind of secondary Internet connection --- one that they could only use when sipping a latte and waiting for a friend.

Truth be told, even with that high price, I might still sign up for the 120-minute plan. I have a pretty strong Internet itch at time. But if I do sign up, I’ll try to be as frugal with my time as possible --- I’ll log in, download my email, and then disconnect. That will serve my needs, but ultimately it won’t be a good thing as far as T-Mobile is concerned.

Not surprisingly, Deutsche Telekom is making the same mistake with its other US-based high-speed wireless network: VoiceStream’s high-speed data network based on the GPRS mobile data standard. This service, which confusingly is called the T-Mobile Internet Service Plan, starts at $19.95 per month for up to 5 megabytes of data transferred, $5 for each additional megabyte. VoiceStream’s high-end service is $59.99 per month for up to 20 megabytes of information transferred, $4 for each additional megabyte.

Pricing like this will prevent high-speed wireless services from ever catching on with the American public. Today these high-speed wireless networks seems largely underused. Companies like Deutsche Telekom should be looking for ways to expand their customer base and the awareness of their product. They shouldn’t be looking for ways to charge as much as they can from today’s early adopters.

As for me, if I’m going to be in Central Square for more than a few minutes, I’ll probably walk past the Starbucks and spend my time --- and money --- at Mama Gaia’s.

You an find out more about the T-Mobile service at Starbucks by clicking into http://www.tmobilebroadband.com. For more information about the VoiceStream T-Mobile service, check http://www.voicestream.com/products/services/istream/rateplan.asp.

Mama Gaia’s website is at http://www.mamagaiascafe.com/.