Could Hotspot 2.0 present monetary opportunities for the enterprise?

Hotspot 2.0 could allow enterprises to turn a profit from leftover wireless LAN capacity by wholesaling their available Wi-Fi to carriers.

Hotspot 2.0, the emerging standard for public access Wi-Fi developed by the Wi-Fi Alliance and the Wireless Broadband Association, could present a unique opportunity for enterprises and carriers to work together. Users could benefit from uninterrupted connectivity, while businesses could potentially turn a profit from leftover wireless LAN capacity.

Among other benefits, Hotspot 2.0 (HS 2.0) holds the promise of seamless roaming and automated authentication for users between Wi-Fi and cellular networks. The standard will also take many administrative tasks off carriers' plates. But while HS 2.0 has been touted primarily by equipment and service providers, enterprise IT administrators are starting to become interested in what the initiative could mean for their businesses.

Monetary gains with Hotspot 2.0?

Wireless hotspots within businesses have been islands of connectivity up until now. Mobile carriers lose control over their subscribers once users jump onto a Wi-Fi hotspot. HS 2.0 will allow carriers to offer Wi-Fi services, even in places where they might not have infrastructure, and that's where the opportunity for enterprises comes in, said David Callisch, vice president of corporate marketing for Ruckus Wireless, a Sunnyvale, Calif.-based Wi-Fi provider.

"Since operators want the Wi-Fi network access, the real opportunity will emerge for any enterprise or venue owner to wholesale their existing wireless LAN capacity to operators [and charge] them recurring fees for that access," a Ruckus blog post detailed.

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Any operator of a Wi-Fi network -- such as a business -- has the power to offer connectivity to its network, Callisch said. "AT&T or Sprint might want to allow their users to go into a hotel and connect via their [cellular] credentials to that network, but the carrier doesn't own that network," he said. "The hotel can enable Hotspot 2.0 on their access points and make agreements with carriers to offer wireless capacity to that carrier's subscribers."

While it is too early to see if businesses will be interested in wholesaling wireless LAN capacity, the opportunity provided by HS 2.0 could be profitable, Callisch said. "A lot of enterprise networks today remain underutilized, and this gives businesses a way to make money with that idle capacity."

In addition to monetizing the network, the seamless handoff between cellular and Wi-Fi networks could compel users to get online, he said, giving businesses the ability to offer consumers deals and discounts as they track their Internet sessions.

Enterprises aren't the only ones that would need to be comfortable with a shared Wi-Fi arrangement, said Michael Finneran, principal at dBrn Associates, a networking consulting firm.

"Probably the biggest thing going against the idea is that the carriers … would not be comfortable trusting their customers' satisfaction to a network they didn't control," Finneran said.

Wi-Fi access: Who do enterprises want on their networks?

Selling off parts of the enterprise wireless LAN is not without IT concerns, and it won't be appropriate for every enterprise.

Large public venues -- such as stadiums and hotels -- and public-facing facilities, including retail shops, might be interested in wholesaling their leftover capacity to a carrier, as opposed to a typical office building with users who are employees. However, the arrangement would likely only work if the venue has deployed a distributed antenna system and had an existing business relationship with the carrier, dBrn Associates' Finneran said.

Making room for carrier customers could dramatically increase the number of concurrent users. More users contending for the network could mean more delays, which could translate to a need for higher-capacity access points.

Isolation and firewalling would also have to be put in place to ensure separation between user groups. "You have to be extremely careful when opening the enterprise network to anyone else -- including a carrier," said Craig Mathias, principal at the Ashland, Mass.-based Farpoint Group advisory firm.

"[HS 2.0] is one of the enabling technologies that make wholesaling additional capacity a possibility … but there is no necessary connection between HS 2.0 and wholesaling," he said. "The standard isn't sufficient in and of itself to make that arrangement work."

That said, carriers are running out of data capacity on their networks and won't have enough spectrum to meet the demand. Wi-Fi networks could help carriers meet that need, Mathias said. "That might be through enterprise Wi-Fi or other agreements with Wi-Fi network providers," he said.

"Eventually we'd like Wi-Fi and cellular networks everywhere to be connected, and the handoffs in both directions should be completely transparent and without any user interaction,” Mathias said.

Let us know what you think about the story; email Gina Narcisi, news writer, and follow @GeeNarcisi on Twitter.

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