The Web Over Hawkwood

What would happen if you could get your broadband Internet access for free? Thanks to a gutsy (maybe foolhardy) upstart, a Calgary suburb is about to find out

Mar 1, 2010  

by Heidi Staseson

Free connectivity remains a compelling concept, however. One only need point to Fredericton, N.B.’s Fred eZone network, which, since 2000, has been offering the city’s 80,000 residents free Internet access (funded in part by taxpayers). Google’s Mountain View mesh user base has increased 10% since the network opened in 2006. “It’s just outstanding to me that we have 19,000 unique users in the last month in a city where there’s 30,000 households. It shows what a large demand there is for this kind of network,” says Garcia.

Cities such as Luxembourg and Taipei have all seen success in recent years with their Muni-Fi networks, and San Francisco-based Meraki Networks filled the EarthLink-Google void in 2008 with the launch of its “Free the Net,” ad-hoc Wi-Fi network in select neighbourhoods. It’s a prime example of an emerging business model that focuses on a “start-small-build-grow” approach. People simply won’t pay for capital-intensive Wi-Fi operations. “The metro model of ‘Build it and they will come’ has proven time and time again not to be the right model,” says Sunnyvale, Calif.-based Ruckus Wireless marketing vice-president David Callisch. Building chunk by chunk is the way to go. “Instead of putting Wi-Fi nodes and infrastructure throughout a city, focus on the area where it might be difficult to get a DSL line or a fixed broadband connection into a property,” Callisch explains.

So what makes Naeco unique? Dubreuil points to its six key marketing components, or value-added features, tailored to the Hawkwood community. These include banner advertising opportunities – sans pop-up ads – on the Naeco home page (gonaeco.com); a monthly community e-newsletter with events and updates to all registrants; event opportunities whereby an additional $50 a month will give those home-page advertisers a presence at all four community events; and a portion of the locally generated revenue going back to the community for good causes such as junior hockey league jerseys.

Critics argue that business models such as Naeco’s should be regarded as a supplement to the incumbents, not an alternative. The demand for broadband connectivity is only increasing, though, as evinced by the explosion of hand-held computing devices. Justified or not, there’s a growing expectation among early adopters that they should be able to get Wi-Fi connectivity just about anywhere, allows Callisch.

With that comes the growing hot-spot model, where users can roam from home to the nearest park bench or café, either through private, paid-for subscription or via their current ISP in the form of a subsidized Wi-Fi bundle. Hot spots are everywhere from Starbucks to McDonald’s to the Calgary International Airport. An Edmonton business student launched a free Wi-Fi project in 2008, operating in venues throughout the Old Strathcona district, with hopes of further expansion. And Brazilian-based Wi-Fi marketing company Vex Corp. announced last summer it would be unveiling 5,000 ad-sponsored, free-service Wi-Fi hot spots throughout hotels, franchises and airports across Canada by the end of 2010.

But make no mistake, mesh still has legs. In December, the Canadian government announced a $9.7-million investment in a $32.3-million research and development project for Kanata, Ont.-based BelAir Networks Inc., to develop advanced wireless networking technologies to improve the security of defence-related communications through the Strategic Aerospace and Defence Initiative (SADI), toward which BelAir will “develop and introduce a new set of hardware and software capabilities for its wireless mesh networking product line.”

Naeco, in its early days, is clearly suffering growing pains. The biggest one involves poor or non-existent signals in certain Hawkwood pockets. Resident Trevor Hughes, who describes himself as a satisfied Shaw customer, tried to access Naeco’s free service but was met with dead air. “[Naeco] recommended that if I wanted the signal I would have to purchase a booster [device] from them,” Hughes explains. “I wasn’t interested in doing any work so I didn’t pursue that.”

“The free [service] is there; it just might be a weak signal,” Dubreuil concurs, noting the necessity for the Customer Premise Equipment [CPE] add-on, an approximately $100 device that makes it easier to access networks inside buildings where the signals might not be reachable.

That redefines “free” in the view of Telus’s Neale. “The assumption is that people will sample the free services and they’ll develop some form of dependency upon them, or they’ll see their value and upgrade them to a higher order of service,” he says. “The challenge quite often is that the basic rate of service is of such a low level that in fact nobody is stimulated to pay to get the better service.”

At the time of our interview, Dubreuil is still ironing out the kinks as to how that CPE unit will be distributed and at what, if any, cost to the customer. But, to be fair, such is the fate of any startup. “We had lots of complaints in the first year or two. We still get complaints. It’s the nature of a wireless network. How many times does your cellphone drop a connection?” offers Google’s Garcia.

One Friday morning in mid-December, Hawkwood resident Diane Heaton was alarmed to find her Telus Internet had crashed. Ironically, it was just after she had upgraded her service to six MBps at a lower cost. Heaton’s husband suggested “we try that new wireless thing.” Heaton had Naeco access through the weekend though she says the connection was “probably five times slower than normal.” As a light user, she was still able to go to all her usual web haunts.

“You’re thinking, ‘Well, this is free,’ so you’re willing to put up with slow. I had no other option. That’s the only reason I tried it,” she says, conceding that even though Naeco saved her that weekend, she probably would only use it as a backup.

Still it’s a start. Dubreuil says he’s happy for Hawkwood residents to sign up for Naeco’s free service if only as a supplement to their main provider. (The company claims 685 accounts as of Feb. 1, representing 18% of area households.) The key is providing competition in a relatively uncompetitive market. “If you’re in this community, you’re either Shaw or Telus. There’s Nucleus but all they would do is pick up a line from them and resell it to you,” he says.

Speaking of competition, what’s to stop other entrants moving in and copying Naeco’s model? Here Dubreuil shows a weary confidence born of experience. “It’s not really a secret recipe but if anybody else wanted to do it, it would take a lot longer than how fast we could do the next one.”

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