BRUSSELS (WiMAX Day). In July of this year, the European Commission (EC) in Brussels approved the use of 5 GHz spectrum for license-free use in the 25 member states of the European Union with wireless networks, principally Wi-Fi. At the time, Viviane Reding, Information Society and Media Commissioner, commented that “Broadband is key to our competitiveness, and the challenge of closing this gap must be addressed urgently.”

Since July, Wi-Fi hotspots have sprouted around Europe, and many local government-sponsored initiatives have begun to offer free Wi-Fi in cities. In the last month, the EU has received appeals from WiMAX and telco operators in Europe that contend that the use of free Wi-Fi is anti-competitive.

Czech Mate
Nowhere is the free Wi-Fi debate greater than in Prague, where the city administration intends to cover the entire city with free Wi-Fi access to nearly 1 million people. To achieve this, the Information Technology Ministry in Prague obtained a subsidy from EU Structural Funds of CZK 37.3 million (€ 1.3 million Euro).

When free Wi-Fi hotspots began to emerge this summer, numerous operators appealed to the city administration to stop free Wi-Fi because it interfered with their business of commercial broadband access. The most vocal opponent of free Wi-Fi in Prague is Czech Radiokom who operate a WiMAX network using 3.5 GHz spectrum, and have some 10,000 subscribers on an installed network of 18 base stations.

With no response from city administrators, Czech Radiokom, along with other local telcos, filed complaints to the Anti-Monopoly Office (UOHS) in Prague, and the European Commission in Brussels. The UOHS ruled in August that under Czech law, free Wi-Fi did not violate fair market conditions. However the UOHS issued a recommendation to the Regional Development Ministry to stop subsidizing free Internet in Prague with European Union funds. The Anti-Monopoly committee of the EC in Brussels will address the issue of free Wi-Fi next week.

At the centre of the debate in Brussels is that projects such as free Wi-Fi constitutes illegal government support that is anti-competitive and detrimental to companies that supply the same service on a commercial basis. If the committee in Brussels supports the claim of operators in Prague, it will force the city to stop free Wi-Fi. There are precedents for this already in Europe. The city of Barcelona in Spain offered free Wi-Fi two years ago, until the Spanish Telecommunications Commission (CMT) stopped the service.

Free today, WiMAX tomorrow
Other cities in Europe have been offering free Wi-Fi, but on a lower scale. The city of Norfolk in England has a municipal Wi-Fi network open to all citizens, but only at 256 Kbps. Rumours abound that in the future Pipex will soon connect into this network and supply customers who want a high-speed upgrade can subscribe to their WiMAX network.

In Belgium, as students returned to university this week at VUB and ULB in Brussels, they found they had free Wi-Fi access. The network is the brainchild of Guy Vanhengel, Minister of Brussels, and uses a WiMAX backhaul to provide connectivity across the campus. The security in the network was carefully planned with operators such as Clearwire in Belgium to ensure that it was available only for university students.

While the consensus is clear that free Wi-Fi must go, many believe this will happen naturally. Dave Hagan, President of Wi-Fi operator Boingo stated recently that “I believe the market for free Wi-Fi will eventually go the way of the market for free dial-up Internet access. There are no free ISPs today because people value location, access, technical support and dependability.” The same may very well be said of Wi-Fi networks in general. In countries such as France and Sweden, Wi-Fi access points are already being replaced with WiMAX access as customers demand better security and access speed.

Although the whole Wi-Fi argument may be a moot point as far as the growth of WiMAX is concerned in the long-term. According to John Munnery at Max Telecom in Bulgaria, “The WiMAX high ground is the “personal broadband” approach – one subscription that works for the office, for home and on the move. Public Wi-Fi competes realistically only with the last – and probably with a substantial quality gap.”