Welcome to "lake Wi-Fi," as introduced by David Herr, chief technical officer of Jarvis Networks, a division of Montgomery, Texas-based Jarvis Entertainment. Over the past several months, Herr and his associates have been bringing 802.11 coverage to the 22,000-acre Lake Conroe outside of Houston. "We started adding some of the resorts and one of the beach clubs on the lake, and it just kind of blossomed from there," said Herr.
So far the wireless connectivity covers the entire south and southwest sides. That area includes a couple of beach clubs, a country club and various boating facilities. It also includes the Del Lago Resort, a hotel and conference center that already boasts it own internal wireless Internet access. Herr says his network now gives business guests the option of leaving the hotel to go poolside or shipside while remaining connected to their e-mail and other cyber-vitals.
"I like to spend some time with my family and with my friends, but at the same time my business relies on my having access to the Internet and e-mail and videoconferencing," he said. "There are a lot of people like that, people who want to be able to take some time away, but without being completely out of touch from everything."Maybe so, but it is the economic case that should really be turning heads here. While others have made the argument for 802.11 in resort settings, the idea has yet to take off, largely due to the lack of a viable business model. In this sense, Herr says his firm is bringing something quite new to the table. Jarvis is charging each user $8.95 per 24 hours of access. Thus far the system sees little usage on the weekdays and only 50 to 75 users on weekend days. Yet Herr suggests that this pace of usage already gives him a comfortable margin. How can this be? Largely, it is because Jarvis happens to operate an underground data center adjacent to the lake, which provides secure collocation and hosted data storage solutions. The firm is, in effect, siphoning off bandwidth from the center's one gigabyte pipeline in support of the Wi-Fi network. As a result, "our cost per megabit is much cheaper than, say, an ISP coming in and trying to build something from scratch," said Herr.
Analysts say the model has considerable merit. If the bandwidth is already paid for, "than any money you are making is good money," said Eddie Hold, a wireless analyst with research firm Current Analysis in Sterling, Va. "Since they already have the core of the infrastructure with the broadband pipes, they don't need to get a lot of traffic to make it compelling."
That is pretty much the way Herr has it figured. He said the actual 802.11 infrastructure has cost the firm only about $20,000 this far. As for billing mechanisms, he has contracted out that work to a local provider, NetNearU, which also handles the billing for Boingo users who choose to access the network. So the only real cost would be the bandwidth, which is available to Herr practically for free via the data center.
Intriguing though it may be, it is a financial model that is "probably not very easily duplicated," Herr noted, "because we have these other assets that most other people would not have. Not everybody is sitting on this much bandwidth that they can turn up and down when they need to."
Still, the success of this model will depend in the long run on consumers' willingness to pay anything at all for Wi-Fi access while in their boats and on the golf course.
Analysts say this remains a big unknown.
"In terms of leisure users, it is a pretty small market right now among those who are traveling with a laptop, wanting to have access, and willing to pay $5 or $10 for that," said Amy Cravens, an analyst at In-Stat/MDR. "If they are just downloading a few e-mails, I would image that the majority of leisure users would still just use dialup for that."
Ready to get your own Wireless ISP service off the ground? Join us at the 802.11 Planet Conference & Expo, June 25 - 27, 2003 at the World Trade Center Boston in Boston, MA. Get started with our two part panel entitled Practicum: Building a Successful Wireless ISP.