Wi-Fi's Jolt Back to Reality

There's nothing more ominous than the first hiccup. You freeze, gripped by the dread of a prolonged attack that could last hours, days — even years. (According to Guinness, an American pig farmer's hiccups persisted from 1922 to 1987.) The fear of the unknown is almost as bad as the hiccups themselves: Once they start, you have no idea when they will end.

With the demise last month of hot spot operator Joltage, the Wi-Fi juggernaut suffered its first real hiccup. Joltage wasn't the first hot spot provider to go out of business, nor will it be the last. But it's high profile. Joltage founder Andrew Weinreich had already earned millions with his now-defunct online service Sixdegrees.com — and like another erstwhile dotcom mogul, Boingo Wireless founder Sky Dayton, Weinreich's name and pedigree brought the idea of commercial hot spot aggregation instant credibility.

What set Weinreich's idea apart was his franchise model: Anyone who wanted to set up a commercial Wi-Fi hot spot could buy the network equipment from Joltage, which would handle all the billing and offer hot spot owners a 50/50 split on resulting revenues. An interesting approach, but too much, too soon: In an e-mail announcing Joltage's shutdown, Weinreich wrote, “It will take substantially longer than expected for the significant numbers of users we anticipated on such a network to materialize.”

So is Joltage's failure the start of a prolonged period of suffering, or just a blip on the radar? I'm betting the latter. When Joltage first surfaced, Wi-Fi was embryonic and the company's business model made as much sense as anyone's. It's still evolving, but it's increasingly clear that with the emergence of so many free Wi-Fi community networks, there will never be that many people willing to fork over the amount of cash to commercial hot spot providers necessary for a model like Joltage's to survive.

Wi-Fi will face similar struggles in the months and years to come. But just like that pig farmer's hiccups, it's not going away anytime soon. So breathe deeply into a paper bag and relax. Everything's going to be all right.