Bifurcated WiFi

Google has announced ambitious plans to blanket San Francisco with a free 300K WiFi service, according to Om Malik. While being particularly interesting to the press because it is Google, one of the interesting aspects of this deal that is being lost in the noise is the idea of creating a free service at 300K, and a higher level of service that can be accessed for a fee. Om writes:

When asked if this puts the company in direct conflict with incumbents like SBC and Comcast, Sacca replied, “I think a few months ago, we might have thought that, but we have talked to them and it seems the thinking is evolving amongst other last mile providers.”

Perhaps what Google has convinced SBC and Comcast of is that there will be zero margin in providing low speed (300K) access, but that each will have a chance to be able to offer high speed access... Om writes "As part of its proposal, the company says it will be offering wholesale access to other service providers..."

The idea of two levels of service is a good one for consumers, but incumbents should watch out for the open source phenomenon. Free open source products are often introduced into categories with limited feature sets or limited scalability and reliability. But over time many such products have added features, improved performance, and now threaten their commercial counterparts.