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June 23, 2004

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Palo Alto Online

Publication Date: Wednesday, June 23, 2004

Free or fee? Free or fee? (June 23, 2004)

Downtown businesses jump on the WiFi bandwagon, but will it pay off?

by Cross Missakian

If you're strolling down University Avenue and suddenly need to send an e-mail, buy a rug from a vendor in Persia, or research the long-gone orchards of Silicon Valley, fear not -- in downtown Palo Alto wireless Internet access abounds.

Once the province of techies out for a thrill, wireless Internet connections have become ubiquitous. Businesses throughout Palo Alto are trumpeting such access to attract laptop-wielding customers seeking a cup of coffee or a quiet place to work.

But deciding where to go for your WiFi -- and whether you'd rather pay for a monthly account or hope for the kindness of others-- gets a bit tricky.

In May, Sunnyvale-based AnchorFree Wireless launched its first "hot zone." For $4.99 a month, anyone with a wireless-enabled laptop can get online via a network that runs along University, extending roughly from Cowper to Alma streets.

AnchorFree President David Gorodyansky said his company is offering a unique combination of price and mobility.

"Obviously, there are places that have it for free, but we offer it for such an inexpensive price, and we offer a whole downtown. We're offering people freedom," he said.

Others say paid services offer them a guarantee that Internet connections can be found in a variety of places.

Sunnyvale resident Chris Insinger pays $29 a month for T-Mobile's WiFi service, which is accessible from thousands of "hot spots" in 33 different states, including about 10 locations in Palo Alto. Insinger thinks the price is too high, but local solutions don't work for him.

"If you need access nationwide, there is no alternative," he said.

However, as many ambitious entrepreneurs have discovered in the Internet era, it may be to compete with "free."

Nancy Farid-Coupal set up a free WiFi network in her recently opened Coupa Café on Ramona Street. Surf and Sip and other WiFi providers approached her about setting up a fee-based network, but Farid-Coupal said it didn't feel right.

"Our concept was a place where people could relax, feel good, and enjoy themselves. The free Internet helps send that friendly message."

She said most customers are sensitive to her business, and will buy something if they've been sitting too long.

The proliferation of such free hot spots, provided by restaurants, like Coupa, retailers and individuals has already led several nationwide WiFi companies to shut down, and has skeptics wondering if wireless Internet connections will ever be profitable.

"This is the Silicon Valley, why aren't they all free?" asked Hugh Morrow, a resident of Australia who travels to Palo Alto on business. When downtown, Morrow gets online from the courtyard of Borders Books, using the WiFi provided by the Apple Store across the street.

He's generally opposed to paying WiFi, but said he might consider $5 a month.

Despite the availability of free options, Gorodyansky said business has been good, although he would not say how many customers AnchorFree has signed up. He hopes business will increase even more once the company expands the Palo Alto-focused portal site, which will provide information on local businesses and entertainment.

How the wireless game plays out in Palo Alto and nationwide remains to be seen. In the meantime, if WiFi is too confusing, just stop by Q-Cup on University. As long as you sit at the table near the cashier, they'll happily throw a DSL cord over the counter and let you plug in the old-fashioned way -- for free.

Editorial intern Cross Missakian can be e-mailed at [email protected]

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