Subject: [NEXTEL-1] Cometa Networks

From: Marcel <[email-masked]>
Date: Fri, 13 Dec 2002 17:26:45 -0500

COMMENTARY
By Jane Black
DECEMBER 13, 2002

America as Wi-Fi Nation? Not So Fast

Startup Cometa Networks has bold plans to put 20,000 wireless "hot
spots" in 50 big cities. Too bad it might take 250,000 or more

Everyone loves wireless fidelity. Wi-Fi, the ultrafast, low-cost
broadband networks, lets computer users browse the Net or send
e-mail from a park, an airport -- just about anywhere -- no wires
required. Wi-Fi is sexy. Wi-Fi is liberating. Wi-Fi is the Next
Big Thing in the post-boom economy.

Small wonder that some of America's biggest companies want to get
in on the deal. On Dec. 5, AT&T (T ), IBM (IBM ), and three
venture-capital firms, including Intel Capital, announced that
they were backing a new Wi-Fi wholesaler, Cometa Networks. By
2004, Cometa plans to roll out a constellation of at least 20,000
wireless-access points, known as "hot spots."

In major cities, wireless users would never be further than a
five-minute walk from wireless connectivity. In the suburbs, road
warriors would be a mere five-minute drive from wireless nirvana.
The technology's advocates are cheering: With AT&T, IBM, and Intel
(INTC ) behind Wi-Fi, the technology appears poised to move beyond
its grassroots to the big time.

DOING THE MATH.  Cometa Networks, though, is no slam dunk. As
anyone who lived through the tech boom knows, a few big names
behind a new technology don't guarantee profit. And Cometa still
hasn't spelled out exactly how the business would work. It says
it'll set up the hot spots and sell bandwidth to cellular
companies and Internet service providers, who in turn would sell
Wi-Fi service to their customers.

However, Cometa gives no details about how and where it plans to
put the hot spots or how much the service would cost. In a recent
conference call, Cometa executives remained hazy about how the
network would be used, saying only that they were confident that
the country's 100 million Internet users would find new ways to
use their laptops once the network was rolled out.

Let's look at the plan. Cometa Chief Executive Larry Brilliant
says 20,000 hot spots strewn in shopping malls, hotels, and
restaurants will provide coverage in the 50-largest U.S. cities.
The company has previously been reluctant to put a figure on the
build-out cost but is now estimating it at $30 million.

SATURATING SEOUL.  Cometa, though, will need far more than 20,000
hot spots to provide truly ubiquitous coverage, says Anthony
Townsend, a research scientist at New York University's Taub Urban
Research Center and a founding member of grassroots Wi-Fi
coalition NYC Wireless. Wi-Fi signals aren't ultrapowerful. So
users must be within 850 yards of a hot spot to get connected.
According to Townsend's calculations, Cometa will need 250,000 hot
spots to "wire" America's 50-largest cities -- more than 10 times
the number Cometa has slated.

Townsend's figures pale in comparison to the density of hot spots
that are being rolled out internationally. South Korea Telecom is
installing 10,000 in Seoul alone. In Tokyo, NTT DoCoMo (DCM ), one
of seven local Wi-Fi providers, has installed 1,000 hot spots.
These rollouts are even more significant in light of the dense
population of Asian cities compared with sprawling U.S. commerce
centers such as Los Angeles or Dallas.

Installing even 20,000 hot spots around the U.S. won't be easy.
Cometa asserts the task will be straightforward, thanks to the
presence of AT&T's national network and the skill of IBM Global
Services. But setting up wireless-access points will require
cutting deals to gain access to thousands of privately owned
office buildings, airports, and restaurants. Also, many major
convention centers -- prime hot spot locations -- already have
exclusive contracts with other telecom providers.

LATE START.  Take Las Vegas-based telecom provider Smart City,
which has sewn up exclusive deals with convention centers in
cities from Anaheim to Washington, D.C. Meanwhile, early startups,
such as Wayport and Boingo, have beat Cometa to the punch at airpo
rts, a key location where business travelers often remain stranded
for hours at a time.

Cometa Chairman Ted Schell adds that his company has no plans to
draft "roaming" agreements with other providers who have already
locked up prime spots. The reason: Cometa is targeting business
users and must retain full control of its network in order to
guarantee quality of service.

Finally, there's the question of whether anyone can successfully
charge for Wi-Fi. Access points are cheap -- hooking up the
technology starts at around $200. These access points are so easy
to operate and maintain that some believe hotels, cafés,
bookstores, and airports will simply install them on their own.
Sound crazy? Manhattan's Bryant Park has had a free Wi-Fi network
in service since June. The park spends more per month on trash
bags than it does to run its Wi-Fi network, according to system
operators, who spend between two to five hours per month on
maintenance.

ALTERNATE PARADIGM.  In fact, some network experts think Wi-Fi's
diffusion may end up resembling the spread of the fax machine
rather than the development of a centralized communications
network. Wi-Fi, like the fax machine, is a product rather than a
service. The users will build the network by installing cheap
wireless-access points and buying wireless cards for their laptops
that allow them to log on to the airwaves. As with the fax, the
more people who set up access points, the more powerful the
network.

When fax machines were first introduced in the 1980s, several big
companies planned new fax-delivery services. In 1984, visionary
FedEx CEO Frederick Smith introduced a service called ZapMail that
he hoped would replace jet fuel with ink toner. The plan: FedEx
would buy the then-pricey fax machines and place them in every
FedEx office. Customers who wanted to send a fax would have FedEx
pick up their documents and bring them to a local office. Within
the hour, the documents would then be faxed to the FedEx office
closest to the recipient. FedEx would put the fax in an envelope
and hand-deliver the service.

At the time, it made sense. ZapMail began as a value-added service
that leveraged FedEx's core strength -- reliably delivering
information overnight. It also saved customers the trouble of
installing and maintaining expensive equipment. But ZapMail
ultimately failed as the price of fax machines plummeted. Rather
than pay someone else to send a fax, businesses just bought their
own machines. FedEx shuttered ZapMail only 12 months after the
launch -- and $190 million in losses.

"LAND GRAB."  ZapMail may prove a cautionary tale for Cometa.
Right now, Wi-Fi seems like a new, whiz-bang technology that
requires corporate oversight. But in time, business users and
individuals may not see the need to pay someone for Wi-Fi service.
After all, bandwidth is sold at a flat monthly rate. That means
there's no cost difference to a hotel, restaurant, or public park
if 1,000 or 100,000 people log on to their network.

"This is a corporate land grab. Ultimately, though, users may
realize they can make this work on their own," predicts Dewayne
Hendricks, CEO of the California-based Dandin Group, which
promotes wireless technology in remote areas. That would be good
news for Wi-Fi. But bad news for Cometa.

Black  ([email-masked]) covers technology for
BusinessWeek Online
Edited by Douglas Harbrecht

 http://www.businessweek.com/technology/content/dec2002/tc20021213_6091.htm

---

From: Marcel <[email-masked]>
Date: Fri, 13 Dec 2002 17:41:00 -0500

------- Original Message --------
   From: "Andrew Seybold" <[email-masked]>
Subject: RE: Cometa Network

It is nice to know that for once I am not alone in my thoughts about Wi-Fi in general and
Cometa specifically, it is encouraging to see others who share my viewpoint.

Best Regards,
Andy Seybold
Outlook 4Mobility
www.outlook4mobility.com

Marcel wrote:

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