The more-immediate problem for public Wi-Fi businesses, though, was the business plan itself. It proved tough to entice enough users to pay for such "out and about" connections.
What ultimately happened was that public Wi-Fi access became, in part, a niche service for traveling workers and in part a retention tool for major cable and telco broadband providers.
In its latter configuration, fixed broadband customers got "no extra charge" Wi-Fi hotspot access as an amenity for being a customer. The indirect business model was enhanced customer retention.
These days, another evolution is occurring. In addition to helping service providers retain their existing customers, public Wi-Fi now is becoming a way to defray mobile network investment, shift huge amounts of traffic to the landline network and create more-affordable ways to support bandwidth-intensive services such as video.
To some extent, Wi-Fi hotspot availability also creates a platform for service creation, in particular services mobile operators want to support, but not too much. Mobile VoIP is one example.
AT&T, for example, allows mobile VoIP on the iPhone, but only from hot spots.
Verizon Wireless, on the other hand, takes the opposite approach and only enables use of its embedded Skype application on the wireless network, not Wi-Fi.
Either way, public Wi-Fi allows creation of services in a way that competes less directly with mobile voice, for example.
The point is that the public Wi-Fi business model is changing, again. Where one might have argued that the business model was "fixed broadband customer retention and acquisition," the additional, and possibly more-important model, is as a major wireless access method and service platform.
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