By Colin C. Haley

May 20, 2003

Following Verizon’s lead, broadband provider SBC will build a wireless Internet network to offer its DSL subscribers the sought-after service.

“We’re pursuing plans in the public hotspot arena, we know it’s a very, very important market for us,” SBC spokesman Michael Coe said. “Our broadband users want to replicate the experience they have at home and at work when they’re on the road.”

SBC, which, like Verizon will use pay phones sites as hotspots, hasn’t decided whether to charge for the service or offer it free to customers. Some Korean providers bill users $8 per month for the service, Coe said.

The first market for SBC’s Wi-Fi network is still being discussed as well, though it must be a large city to make economic sense. The San Antonio, Texas-based company serves 13 states in the Midwest and West.

Currently, SBC offers hotspots for enterprise (using Cisco gear) and home customers (using 2Wire gear). Last week, it called for bids for public hotspot equipment. Cisco, as well as Proxim and Symbol, are expected to be among those vying for the business.

Verizon, which last week said it would deploy 1,000 hotspots in New York by year’s end, estimated that each one would cost about $5,000.

The purpose of Wi-Fi incentive is two-fold: to attract the 50 percent of U.S. Internet users who have not made the jump to high-speed access; and to keep current subscribers from defecting to Comcast which delivers broadband through cable.

Another part of the regional telecom’s strategy, aimed especially at late broadband converts, is dropping the price of DSL service.

On Monday, Comcast said it could provide Wi-Fi access using it coaxial cable and cable headends for hotspots but will wait to gauge the success of Verizon’s initiatve before proceeding.