Operating today in 15 U.S. airports, AWG typically provides two tiers of service: a basic, limited Wi-Fi connection, which anyone can access for free if they watch a video or view a website, and a premium paid service for customers who want a higher-quality connection. It’s an approach that Boingo and other hotspot aggregators have also adopted.

JiWire has built its business model on the principle that ads are more valuable if they’re tailored to their location. Where a consumer accesses Wi-Fi is not only useful for serving up ads for nearby restaurants or stores, it can also provide insights about the consumer making the connection. For instance, people who use Wi-Fi at airports tend to be more affluent travelers, which would make them ideal targets for hotel or airline ads.

Airport image courtesy of Flickr user Michal Osmenda

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WeFi has developed software for the handset and network that detects, measures and tracks the signal strength and capacity of millions of deployed hotspots mobile cell sites around the world. The company’s WeANDSF (the acronym is for Access Network Discovery and Selection Function, a mobile industry standard designed to merge Wi-Fi into cellular networks) platform then crunches all of that data selecting the optimal network connection for any given device at any given location and time.

WeFi sells the technology primarily to mobile operators, which use it to offload traffic from their 3G mobile networks to cheaper Wi-Fi connections, but VP of marketing David Fishman said that cable operators have gotten more interested in providing wireless data services. They may not run mobile networks, but cable providers want to encourage their customers to access their broadband connections and video programming outside of the home, making those services that much stickier, Fishman said. Given that the cable companies’ early attempts to launch their own mobile broadband networks failed, Wi-Fi presents itself as a cheap and plentiful alternative.

Time Warner has already launched extensive outdoor Wi-Fi networks in some of its key cable markets, and it has partnered with Comcast, Cablevision, Cox Communications and Bright House Networks to create a 50,000-hotspot joint roaming network. WeFi used its WeANDSF technology to help Time Warner plan its portion network, but it also mined the unlicensed airwaves to find open and reliable hotspots Time Warner can tap for free.

Fishman wouldn’t reveal how many open hotspots it’s adding to Time Warner’s footprint, saying only there were a potential 10 million hotspots in the U.S. that could eventually be included. He stressed that these aren’t residential access point left without password protection, but free hotspots intended to be accessed by the public offered by governments and businesses like Starbucks. WeFi competitor Devicescape already tracks 7.8 million of these hotspots in the U.S., and is adding more to its databases each day.

Time Warner customers don’t have to do anything to access these hotspots. In fact, some of them probably already are. WeFi’s client is already embedded in some of Time Warner’s Wi-F Finder apps, which allows smartphones and tablets to find and automatically connect to the virtual network, Fishman said, and TWC plans to implement it in all of its apps in the future.

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Boingo and Google didn’t name the specific malls, saying only that at least four of them would be in San Francisco, Los Angeles, Tampa and Seattle. Google Offers will sponsor the service, meaning customers connecting to the hotspots with a smartphone, tablet or PC will encounter a welcome screen encouraging them to sign up for Google’s daily deal service. Regardless of whether customers sign up for the service or skip past the screen, they’ll get free, unrestricted access.

In New York, Google and Boingo have offered the promotion in six subway stations and 200 hotzones throughout Manhattan on a trial basis until Sept. 7. The two are also working together to offer discounted Wi-Fi access in sixteen airports. Google Offers will be selling a half-off 24-hour pass for Boingo’s global footprint, which customers can buy when they log into any of the airport networks.

Wi-Fi is already freely available from many restaurants, cafes, shops and other business that use the lure of free Internet to attract and retain customers (Boingo just signed a deal with the Wendy’s fast food chain to manage its free network), but at high-traffic locations with captive customers – airports, hotels, conference centers, etc. – paid Wi-Fi is still a big revenue generator.

A growing number of locales are trying to change up that business model, shifting the costs from consumers to advertisers. Boingo just bought Cloud Nine Media, a sponsored Wi-Fi deal broker. Another player in the public Wi-Fi space Advanced Wireless Group is starting to challenge Boingo’s dominance in U.S. airports, offering a multi-tiered Wi-Fi subscriptions ranging from free ad-supported access to paid prioritized access. It’s already cut deals with 15 U.S. airports.

In New York, the city is working with Van Wagner Communications to turn payphones into Wi-Fi hotspots that require users to visit the city’s tourism website to get access but could feature advertising in the future. Even AT&T is getting into the act, offering free video-ad supported access at Dallas Fort Worth International Airport.

Featured image source: flickr user kevinspencer; Wi-Fi image courtesy of Flickr user suttonhoo

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You may have already seen some of Cloud Nine’s works in a few major airports. When logging into a hotspot, instead of getting the usual registration and payment screen, a terms-of-use page pops up offering to show you a video or ads in exchange for 30 minutes or more of free Wi-Fi access. AT&T is launching a similar service at Dallas-Fort Worth International Airport this September.

Boingo had been testing the sponsored Wi-Fi model working with Google Offers to provide ad-supported Wi-Fi in New York City subways and with American Express to do the same at a handful or airports. According to Christian Gunning, Boingo VP of corporate communications, sponsored Wi-Fi has been in increasing demand especially as Boingo expands beyond airports and convention centers into more consumer-centric locations such as malls, restaurants and stadiums where the expectations are much higher that Wi-Fi should be gratis. Gunning said in an email interview:

“… [W]e’ve historically outsourced this capability. As our consumer segment growth continued (and along with it the need for more sponsored access), it became evident that having this capability in-house would be beneficial.  Cloud Nine Media has built a strong business specializing in the delivery of sponsored Wi-Fi. They have a proprietary sponsorship platform that gives us the ability to deliver these sponsorships ourselves, as well as generate valuable data for sponsors. Bringing advertising/sponsorship expertise in-house puts us in a much stronger position to fulfill corporate goals.”

Boingo runs a global hotspot of network of 500,000 hotspots, though don’t expect every hotspot it owns or manages to suddenly stop taking credit cards. Many of its restaurant and café venue partners already offer Wi-Fi free to the public as a means of attracting customers – Boingo just signed a deal with Wendy’s to connect thousands of fast food restaurants. But the biggest part of Boingo’s business comes from subscriptions, which allows laptop, smartphone and mobile device customers to instantly connect to its global hotspot network for a monthly fee.

It’s likely Boingo will run the “free” service and the subscription service in parallel, generating revenue from non-subscribers through advertising while charging its customers monthly fees to access the same hotspot. The benefit of the subscription model, though, is that it treats all of Boingo’s disparate hotspots as a single network. Subscribers with the proper software on their devices not only bypass advertising, they don’t have register at every hotspot they encounter.

Terms of the deal weren’t disclosed, though Boingo may be more forthcoming on the financial details at its earnings call scheduled Wednesday afternoon.

Airport image courtesy of Flickr user Michal Osmenda; Wi-Fi image courtesy of Flickr user suttonhoo

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Starting in September, any of DFW’s 57 million annual passengers will be able to access AT&T’s Wi-Fi hotspot network free of change in the airport’s five terminals, but they’ll have to watch a 30-second video ad for every 40 minutes of web surfing they do. Not a bad trade, considering a one-off session at a U.S. airport these days can cost as much as $10.

AT&T hasn’t yet specified whether the free service will be available to smartphones and tablets as well as laptops. An AT&T spokesman said the company is still working on the details. The decision, however, will likely depend on whether those non-PC devices can render the video ads AT&T will proffer.

So far the trial is confined solely to DFW and required special permission from the airport’s board of directors to implement. AT&T made it worth their while: It’s expanding its hotspot coverage and capacity to more areas of the terminals, as well as blanketing parking garages and other parts of the grounds. AT&T is likely assuming it will get a lot of takers for the service, and it’s probably right.

These days, it’s not too hard to find free Wi-Fi in many urban locations, given the number of businesses and residents that open their networks to the world. But airports, conference centers and hotels are major exceptions, and those venues take advantage of their captive audiences by charging exceptional rates. If AT&T expands this pilot to other parts of its 30,000-strong hotspot network, then it could have a game-changing business model on its hands.

AT&T currently sells Wi-Fi access for $20 a month nationwide and offers session-based access for $4 a pop. It’s doubtful AT&T is charging advertisers $4 to show a few 30-second videos, but by making the service free to use, AT&T could also attract a lot more users to its network, giving those advertisers fistfuls of impressions.

There could be a dark side to this little experiment as well. While there’s little downside for the innumerable non-AT&T customers that would otherwise be forced to pay for Wi-Fi access at DFW, AT&T has millions of smartphone and home broadband customers who already get free access to Ma Bell’s hotspots. The AT&T spokesman said AT&T hasn’t yet decided whether that no-strings-attached access for current broadband customers will continue in the confines of DFW.

One of the main reasons AT&T has pursued Wi-Fi is its usefulness as an offload technology, sparing its cellular networks from data overload. This experiment may signify that AT&T is looking for a way to monetize that Wi-Fi traffic.

Airport image courtesy of Flickr user Michal Osmenda

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