March 16, 2009, 4:16 PM — Last December, AT&T finalized its quarter-billion-dollar acquisition of Wayport, culminating a Wi-Fi services partnership begun in 2003.
It was a dramatic move: a wireless cellular carrier with licensed spectrum actively, even aggressively, embracing unlicensed wireless LAN for its subscribers, who can use Wi-Fi enabled notebooks, dual-mode cellphones, and VoIP without touching the cellular network at all.
AT&T gives its 15 million wired broadband customers free access to these Wi-Fi services. It's continuing to expand public hot-spot services through a variety of venues, the best known being Starbucks, which has deployed the service in some 7,000 stores nationwide. And the carrier is targeting business users in a big way.
The man in charge of the Wi-Fi service is a Missouri farm boy, Greg Williams, who carries the rather awkward title of vice president, revenue and Wayport integration. He joined Austin, Texas-based Wayport as COO in 2003, helping to grow the number of Wi-Fi locations from 700 to 14,000 in 36 countries.
He's not a stranger to carrier culture: he spent 28 years with AT&T and its subsidiaries, for example as president of SBC IP Communication, and even earlier as CEO of Prodigy Communications.
He's an iPhone user. In his sparetime, he's building a home on a lake near Austin. Like another, better known Texan, he relaxes with one of his three chainsaws. "I feel like George Bush," he says. "It's good thing to clear land."
Most people hear "Wayport" and think "Wi-Fi." But that was only part of the focus, right?
We tried for years to make people understand that we were way more than Wi-Fi. A typical Wayport installation included secured transport, and installing our device at the site. It was a Linux box with lots functions: routing, content caching, web server, policy based routing, QoS, VPN termination, access control and so on.
That infrastructure runs front-of-the-house and back-of-the-house managed services. And that [fact] was key to why ATT had an interest in the company.
As part of all that, you also could provide public Wi-Fi access. That stayed with us.
What was the role of the Linux box?
We maintained ownership of the box, as our delivery mechanism. It allowed us to put sophisticated stuff out there to do bandwidth shaping, blocking viruses at the edge, isolating infected customers while protecting the rest of the network, serve up different pages and user experiences, depending on the SSID you selected. In fact, we were the original developers of the multiple SSID [Wi-Fi] networks: we had the patents for this.
How did the deal with AT&T come about?
Back in 2003, when AT&T was interested in the Wi-Fi business, they looked for partners. They weren't sure if this [Wi-Fi service] was real or not, and they wanted a partner. They chose us to develop [together] the AT&T Wi-Fi service.
What was the synergy between the two companies?
We built some big deployments and some pretty complicated solutions, such as the Starbucks network. We were a managed services software house. And AT&T manages transport and services, and a subscriber base. Plus you can put public and private services on the same transport. So you can leverage this [same infrastructure] and use it to push enterprise and other services downstream.
And you saw user demand for Wi-Fi access?
We saw explosive growth in Wi-Fi devices, including a flood of "browserless" devices, such as digital cameras and gaming consoles [or Eye-Fi's Wi-Fi SD card]. We very early figured out how to let them connect automatically [to our network] and to track and manage them.
How does AT&T view Wi-Fi in relationship to traditional telco services?
We view Wi-Fi as very complementary to a person who's mobile, between work and home.
For example, we distribute thousands of wireless devices that we sell as part of our [wireline] DSL residential customer base. In the enterprise, I walk around with my laptop all day long in my office on my secure network. When I'm on the road, I can enter the 3G network via our LaptopConnect cards.
But Wi-Fi can be pretty effective in offloading [cellular] networks. In a hotel, we can provide transport, managed services, VPN, VoIP, and public access to endusers. Then we layer on top of that the ability for dual-mode smartphones to also use this network, to take traffic that's very concentrated and 'get it into the ground' as soon as you can.
You can think of Wi-Fi as a giant offload point for wireless data traffic. Look at the growth in smartphones and data traffic, and it's pretty clear that Wi-Fi can be a real plus to AT&T.
What trends are you seeing in Wi-Fi traffic and usage?
I'm not sure how much of that we can disclose. We do track distinct users, their usage, type of device, session times, locations, how much traffic they generate in that session. We're using all of that data to put some real intelligence in [the network] where it's most important, including where to build these networks.
Our deal with Apple for the iPhone enabled users to gain access to our Wi-Fi service. Right now, that requires action by the enduser. But in the future, we can do this automatically, to give the user the best user experience and the best network performance.
We've seen explosive growth of smartphone use on our Wi-Fi network since we enabled it. We want to grow the transactions on it.
How can you do that?
For one thing, a Wi-Fi network gives you the ability to create local content. I've been involved in this a lot, as the former chairman of the WAP Forum. For example, you walk into a store, with which you have a loyalty card relationship. The Wi-Fi network "sees" you, if you have signed up, and we can associate [with you] data, features, and promotions. This is hard to do in a macro network, but I can do it with the localized Wi-Fi network and something like a McDonalds or Starbucks card. All this becomes possible.
Have their been any shifts in Wayport deployment costs of dynamics, now that you're part of AT&T?
Wayport was a standalone private company, and we priced our services to AT&T, who in turn priced them to endusers. Obviously, there's some ability there to look at cost efficiencies, and to offer customer a more compelling value.
Second, AT&T has a vast capability on how to deploy infrastructure. At Wayport, we deployed our own, but secured our transport from various vendors. Now AT&T owns this part of it.
Third, AT&T has a large customer base: 120 million wireline customers, for example. By bundling Wi-Fi with your [existing] base, you can create more value. And you can see benefits: you own those networks and don't have to pay out roaming fees to other partners.
Fourth: AT&T had relationships with a lot of venues, but had no way to bring them Wayport-like Wi-Fi services. Even under the present [bad] economy, we can see huge opportunities to work with these venues to create services that involve Wi-Fi and smartphones and devices.
What does AT&T offer business users in terms of Wi-Fi service?
We can bolt on Wi-Fi [to business laptops] with our LaptopConnect products. If you buy our DSLservice, you get access to all our owned or operate Wi-Fi locations, nearly 20,000 in the U.S. An if you want extended roaming Wi-Fi access, we have a premium service to let you roam to our partners, for example at an airport.
What kind of uptake are you seeing from business users?
We enabled LaptopConnect customers in mid-2008. I would say the take rate has been pretty remarkable. We'll have integrated Wayport products with all AT&T offerings to create an integrated experience across our [Wi-Fi] footprint.
The focus is on value to the customer not data fees. By integrating this into our LaptopConnect client, we create a consistent customer experience. We're very, very pleased with the growth rate.
Have you run into the attitude that "these Wi-Fi guys don't belong here?"
We step across both lines [of business] -- consumer wireless and the business side. AT&T made that leap a long time ago.
The idea is to skate to where the puck is going to be. It's clear that Wi-Fi is going to be with us for a long, long time. Billions of devices will be available with Wi-Fi. For example, it wasn't until roaming become a universal standard that cellular really took off. Wi-Fi has become a universal technology that lets you bridge things: the economics are right, the technology is right, and there are practical applications at home and for businesses on the road.