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Verizon Plans to 'Wi-Fi' Pay Phones
By Ryan Naraine
May 12, 2003
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=18936086

Just weeks after slashing its monthly DSL fee, Verizon plans to build Wi-Fi (define) "hotspot" (define) extensions of its broadband service in New York, using existing pay phones as the distribution vehicle.

A spokesperson for Verizon (Quote, Company Info) said the company would upgrade more than 200,000 pay phones in Manhattan to create 802.11b-compliant network nodes for its high-speed subscribers. The move is yet another carrot to lure customers in the burgeoning marketplace for offering wireless Internet access via Wi-Fi.

The spokesperson declined to provide details of the Wi-Fi plans, which surfaced at a Stevens Institute of Technology conference over the weekend where Verizon President Lawrence Babbio said the Wi-Fi service will be offered as a free add-on for its broadband subscribers.

A press conference is scheduled for later this week or early next week to make an announcement, the spokesperson told internetnews.com.

According to published reports, Babbio said it would be near impossible to charge for access to the Wi-Fi nodes because of the absence of electric power supply to pay phones in the New York metropolitan area.

The company is reportedly mulling different business models around Wi-Fi, including a plan to charge mobile phone subscribers a fee to access the wireless connection.

The availablity of 802.11b service on pay phones is also seen as attempt by Verizon to salvage revenue from a pay phone infrastructure that has been overshadowed by cell phone usage.

Because Verizon is locked into multi-year rentals on the space for pay phones, industry watchers believe it's a smart investment to upgrade them to act as Wi-Fi nodes.

Verizon's Wi-Fi service in New York would be competing with several public "hotspots" that offer free high-speed wireless connectivity. Earlier this month, New York City's Downtown Alliance launched three public hotspots at locations in Manhattan and four more are expected to go live later this month.

The hotspots have been set up at City Hall Park, Bowling Green Park, Rector Park and nodes are planned for Liberty Plaza Park, Vietnam Veteran's Memorial Part at 55 Water Street and at South Street Seaport. A Wi-Fi hotspot is already up and running at Bryant Park on 42nd Street but the addition of nodes to cell phones would expand on the coverage throughout the city.

The Wi-Fi plans follow moves by Verizon to cut its monthly DSL fee $10 to $34.95, a move that many expect competitors to mirror in coming months. The new rate, which is being offered to new customers as part of a promotion that includes Microsoft's MSN 8 software, is expected to be extended to existing subscribers sometime next month.

Separately, Verizon announced unlimited usage and fixed fee packages for small businesses in New York and Massachusetts. The Verizon Freedom for Business calling package promises to free business in the two states from per-minute usage charges and introducing unlimited usage for a fixed monthly fee.

The package, which includes DSL and Verizon Wireless services would cover unlimited, direct-dialed local, regional and domestic long-distance calls.

Designed for small businesses with two to 10 lines, the company said the package would eliminate per-minute usage fees associated with business calls.

http://www.atnewyork.com/news/article.php/2204901