WISP outlook dark, guru Andy Seybold says

Wireless veteran and straight-shooter Andy Seybold last week presented his no-nonsense take on the state of the industry to the Wireless Communications Alliance, a Silicon Valley group that meets monthly to discuss industry goings-on.

Seybold predicted that in two to three years, wireless ISPs (WISP) “will go out of business in droves, helped along by the WiMAX threat and [continued] 3G network rollouts.”

The hands-on wireless consultant (he owns his own radio tower), who heads the Andrew Seybold Group consulting firm, published a report last year severely questioning the business models of hot spot providers making Wi-Fi services their sole business. At the time, he had asked to see a business model from WISP Cometa Networks, but didn’t get one. Cometa closed its doors in May 2004, after 17 months in business.

“Wi-Fi will end up where it was originally intended: in the last 100 feet,” Seybold predicted. “No single network will be all things to all people.” 

Amen to that. Marketing folks, please make a note.

Seybold observed that many establishments have caught on that telecom has become an amenity that might get hidden in the cost of a hotel room or a cup of coffee. But others have not. Near where he lives in Southern California, for example, coffee shops adjoining Starbucks offer free Internet access as long as you purchase something, he said.

“So people sit at Starbucks [piggybacking on] the free Internet service next door rather than paying for the T-Mobile Wi-Fi service [which Starbucks offers for a fee]. If T-Mobile ends up making money on Wi-Fi, it will be because of Wi-Fi-WAN [3G] integration.”

Other things on Seybold’s mind:

* He opposes the FCC giving more spectrum to Wi-Fi and believes spectrum should go to WiMAX instead.

* Rather than the WiMAX Forum attempting to harmonize spectrum around the world – an endeavor he considers nearly impossible – he suggests the WiMAX Forum Regulatory Working Group (RWG) ask the FCC for 700 MHz of existing TV spectrum. “More cell sites are required at higher frequencies,” he explained. The RWG is currently focused on harmonizing the 2.5 GHz, 3.5 GHz and 5 GHz bands.

* He predicted that bidders on future spectrum could be non-traditional players, including AOL, Intel and Microsoft.