TIA 2011: Verizon to offload 3G/4G data through free Wi-Fi hotspots

This story is part of Connected Planet's coverage of TIA 2011: Inside the Network, in Dallas, May 17-20. Read all the stories this week at TIA2011Connected.com.

DALLAS – Verizon Wireless (NYSE:VZ, NYSE:VOD) plans to start using Wi-Fi for 3G and 4G mobile data offload in high-traffic locations such as hotels, stadiums and college campuses, Verizon Communications (NYSE:VZ) chief technology officer Tony Melone revealed at his keynote address at TIA 2011 today.

Melone made only a small mention of the Wi-Fi strategy during his speech, which covered topics ranging from the coming proliferation of cloud computing services to push the limits of residential broadband bandwidth (CP: To Verizon CTO Melone, it’s all one network). He noted that Verizon Wireless would soon “be implementing Wi-Fi strategically” to support its wireless data customers.

After the keynote a Verizon spokesman confirmed that VZW and its parent company would give 3G and long-term evolution (LTE) data customers free access to Wi-Fi hotspots in locations with high smartphone and mobile broadband traffic and gave hotels, stadiums and college campuses as examples. The spokesman, however, declined to go into any details about the scale or precise markets in which the hotspots will be launched, saying the program was still in development.

Verizon Communications already offers a free Wi-Fi program for its residential broadband customers. FiOS subscribers and DSL customers with a 3 Mb/s connection or greater can access hotspots run by Verizon partners in 5824 locations, including hotels, cafes and airports well outside of Verizon’s traditional local exchange territory. Chances are VZW will extend that program to its wireless customers, allowing smartphones, embedded laptops and mobile broadband modems to automatically authenticate and connect to those hotspots when they come in range.

Other operators have begun making extensive use of hotspots as traffic on their 3G and mobile broadband networks has surged. AT&T (NYSE:T) is perhaps the most aggressive, managing a 24,000-hotspot networks to which all of its mobile data customers get free access. But AT&T has also moved beyond the typical coffee shop/airport Wi-Fi deployments to launch what it calls hotzones, dense clusters or high-power outdoor hotspots in heavily trafficked urban areas. AT&T has used those hotzones to cover whole entertainment and nightlife districts such as Austin’s Sixth Street, Chicago’s Wrigleyville and New York’s Times Square as well as shopping hubs like San Francisco’s Embarcadero.

Since AT&T extended free hotspot access to its smartphone and mobile broadband customers two years ago its total Wi-Fi sessions jumped from 20,000 in 2008 to 85,000 in 2009. Last year, the hotspot network supported 107 million sessions in just the first nine months of the year. AT&T doesn’t break out how many of those connections came from mobile devices or reveal the total volume of data supported on those connections, but AT&T said that the majority of that traffic was from smartphones. (CP: As mobile data demand spikes, can Wi-Fi come to 3G’s rescue?).

“The driver for all of that growth is the proliferation of Wi-Fi handsets,” AT&T Wi-Fi services assistant vice president Dennis Whiteside said in an interview last year. “We’re seeing a wholesale change in customer behavior. Wi-Fi traffic is switching away from the laptop and moving to the smartphone.”

Verizon Wireless, however, has traditionally kept Wi-Fi at arm’s length, relying on its much more extensive 3G network to handle the mobile data heavy lifting. The upcoming launch of the Wi-Fi program may indicate that ever increasing number of smartphones on its 3G network may be taking its toll. In the first two months of launch, VZW sold 2.3 million iPhones (CP: Verizon rides iPhone boom too) the same devices responsible for the data network problems AT&T has experienced for the last two years. But Verizon may also have an eye on saving a few bucks, given the low up-front costs of launching hotspots. It could be using the hotspots to expand network capacity in a few strategic locations well ahead of any congestion problems, thus avoiding the need to deploy more 3G and LTE cells and carriers as certain parts of the network become overloaded. Its 4G LTE network has plenty of capacity as its relatively unloaded, but the vast majority of its smartphone users are still on the 3G network.

At a press conference after the keynote, Melone addressed the topic further. Verizon isn’t looking to spare the 3G or LTE network, he said, so much as it is fixing specific problem coverage areas of the network. A stadium where there thousands of people packed into a confined area is a very difficult place to offer capacity using traditional cellular architectures. Those high density areas were never a problem for the voice or small-bore data services like e-mail, but 3G multimedia requires much more bandwidth, particularly on the uplink—thousands of people trying to upload photos simultaneously at a concert or sporting event. “We just can’t get our capacity in there,” Melone said.

Melone said he Verizon has no plans to use Wi-Fi to augment its network capacity as its competitors are doing. “In my mind it’s much better to invest in your 3G or 4G network,” Melone said.

Indeed, during his keynote, Melone also said that Verizon Wireless would expand its LTE network beyond the confines of its 3G network, which already covers nearly 100% of its voice footprint. Verizon is already working with rural operators to extend its LTE network through spectrum leasing and roaming agreements, which will add another 2 million pops of coverage to the 4G network (CP: Verizon now as 7 rural LTE partners). But the Verizon spokesman confirmed that VZW will expand its own LTE network into some of the few areas where it offers 2G, but no 3G coverage. For instance, VZW has targeted markets in West Virginia where it has no EV-DO network for the LTE service.

Melone also focused heavily on Verizon Communications home broadband efforts in his speech. Verizon has tested FiOS speeds of a 1 Gb/s over its current network, nearly seven times the speed of its current 150 Mb/s connections, but it plans to push the envelope even more.

“Our engineers have successfully tested 1 gigabit speeds on the same FiOS architecture we use to provide service today,” Melone said. “In fact, we’ve even tested a 10 gigabit connection over our fiber network using XG-PON2 technology, which is capable of downloading that same HD movie in only four seconds.”