BBH Report Home Page
November 16, 2003 Provided by System Dynamics Inc.

"Share Your Broadband" -- An Interview with MyZones WiFi Broadband

About a month ago, we received a fascinating press release from the UK announcing a partnership between Bulldog Communications, MyZones WiFi Broadband and Netgear. Together they are offering Bulldog DSL customers the opportunity to use Wi-Fi to share access to a broadband line and split the costs. Subscribers also receive free access to a network of public access hot spots.

  • Bulldog is an alternative DSL provider, offering a wide variety of DSL services to consumers and businesses over unbundled lines in Central and Western London, and nationwide consumer ADSL broadband services based on BT Wholesale's offerings.
  • MyZones provides an integrated Wi-Fi Broadband service.
  • Netgear provides the ADSL modem, wireless access point, and USB adapter for a PC.
  • The combined offering, including Bulldog's 1 Mbps ADSL service, the MyZones service and Netgear equipment is being offered with special year-end promotion pricing.

We talked on the phone with Clive Mayhew-Begg, CEO of MyZones, to learn more about their plans. Clive has a long history with Internet services including one stint as VP of CDNOW and another as Managing Director of Netscape Asia.

We asked Clive where the idea for MyZones came from. He said he'd been to a Wi-Fi Planet conference where "I sat next to the cable guys. They were talking about changing their 'all you can eat' plans because their customers were all using Wi-Fi and filling up their pipes. That sounded like an opportunity for a new business. MyZones was funded in December, launched in May, and went commercial in September. We've just announced the deal with Bulldog and we're working on other deals."

As we discussed MyZones with Clive, we better understood that what distinguishes it from other Wi-Fi services is that MyZones is using IEEE 802.1x to manage the authentication of home Wi-Fi networks. This idea of network authentication of home Wi-Fi users is vastly different from the common home Wi-Fi model where users are not controlled. Indeed, we suspect the vast majority of home Wi-Fi networks are completely unsecured, since nearly all Wi-Fi equipment -- wireless access points and cable/DSL routers -- defaults to having WEP disabled.

This networked user authentication permits MyZones to implement a growing suite of services. The current offering includes

  • HomeZone - "connects your wireless home in a secure and managed way"
  • SharedZone - share "your broadband connection/costs with your friends, family and local community"
  • Public Zone - "free broadband access within the MyZones Wi-Fi community"

MyZones users can opt in to the Public Zone to share their broadband connections as public hot spots accessible to other MyZones members.

We asked Clive why a broadband service provider would allow users to share a broadband connection. We wondered even more, what on earth would cause them to encourage users to share the costs. Most US providers specifically exclude sharing in their service agreements and threaten to disconnect service when they detect sharing. He said "That's because they're not selling Wi-Fi as a service." In the UK's highly-competitive DSL market, Bulldog is differentiating itself from other DSL providers by leveraging Wi-Fi and bundling it with their higher-tier 1 Mbps service (their standard ADSL service is 512 Mbps). As users share, they might well upgrade to yet higher tiers with more revenue to Bulldog.

Clive told us that MyZones' next offering might be to couple voice services with Wi-Fi, using a "Wi-Fi phone" to provide flat-rate phone service in any of the MyZones locations.

We found the concept of network-authenticated Wi-Fi services to be very compelling, and expect we'll see other operators (more likely the insurgents than the incumbents) offering similar services in the future.

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