Downtown Toronto Hydro Wifi Grid

With an hour to kill yesterday morning, I was able to sample the brand new free wifi network saturating Toronto's downtown core.

Toronto Hydro (our primary electricity utility) has invested $2 million in mounting wireless hot-spots on the top of street lamps throughout the city centre, covering six square kilometres of Toronto's busiest business area. The service went live yesterday; just as I happened to be out and about downtown, with my laptop handy and some online research I needed to do.

Overall, the service seems pretty darn groovy - from my very limited test. Not nearly as fast as the connection I can get sitting at the bottom of my garden, 140 feet away from my own $75 wireless router - but nonetheless impressive, considering the much bigger infrastructure spread they're aiming to provide.

The network is free for the first six months, with a plan to start charging $29 a month , and different rates for hourly or daily access, from March 6, 2007.

Connecting to the grid was a little flaky at first, but once I moved from the back corner of the Starbucks at King and Yonge Streets, to park myself closer to the window, I was able to get on and stay on without any pain. Registering requires you to enter a cellphone number, to which the service will send a little text message with an auto-generated user name and password. Simple, relatively secure, and almost painless.

One thought that struck home as I enjoyed Hydro's "One Zone" connection, was the impact this will have on all the existing wireless hotspot players competing for traffic and dollars in the Toronto area. From my seat in Starbucks alone, I was able to see three other pay-access hotspots, including the Bell-provided signal co-branded by Starbucks themselves.

With ubiquitous, single-provider, affordable access right across the city centre - why would anyone want to sign up with one of the many other providers any more? I wonder what this will do to the smaller players in the space, and the relationships many of the coffee shop chains have with wifi providers. An immediate revenue drop seems inevitable - at least until March of next year.

Along our local stretch of Queen Street in the Toronto Beach neighbourhood, there used to be a handful of coffee shops providing free wifi connections as enticement to customers. The theory (which absolutely worked, in my case) was that punters who chose to camp out in the corner for an hour or two to get some work done away from the office, would be guilted into purchasing over-priced carbs and caffeine, in order to enjoy the free Net connection without shame.

Sadly, all of these locations have either closed down or flipped to a pay-for-access model; making it far less likely that I'd choose to escape my home office for a good coffee and some combined writing/surfing/people-watching time. Why should I cough up for a $7 latte and $20 wireless in your place, when I can brew a half-decent bucket of java and get a faster, cheaper connection in my own basement?

On that note, the only thing that chafes a little about the Hydro's wifi service is their plan to start billing for access early next year. Frankly, they could have just buried an extra buck or two a month in their existing electricity bill, kept the wifi free, and won much, much more support.

Tyler Hamilton's article in The Toronto Star quotes Brian Sharwood, analyst with the Seaboard Group, as saying that "Toronto Hydro has likely left a little wiggle room with pricing in case it gets into a price war with Rogers, Bell and Telus."

But why entertain the notion of a price war at all? If Hydro had approached their billing differently, they wouldn't have to concern themselves so much with the possibility of competition. Wrap the cost into our standard utility bills and keep the service fast and free forever: you'd own the market in no time.

Maybe there are laws that prevent them from competing so aggressively, which is a shame. We're at the point where the always-on Internet connection really ought to be provided at the same infrastructural level as any other utility. I don't expect to get it for free, but why slavishly follow the billing model established by your competitors?

Toronto Hydro already bills more than 676,000 customers in the Toronto area. Adding a single measly quarter to each monthly bill they issue would put $169,000 a month on their topline - just over $2 million a year. They'd recoup their investment in no time, utterly delight their Net-connected customers, and be hailed as a true leader in their field.

Heck - even bump it to 50 cents a month, and give the uninterested electricity customers the chance to opt out. Even if they only got 20 per cent of their client base to opt in, they'd still cover their infrastructure cost in two and a half years.

I'm sure they probably went through many rounds of discussion on pricing models prior to launch and, as I said, it's quite possible there are fair competition laws that would prevent them from working the deal this way. Seems a shame.

Still - happy to have the system in place, and more than happy to report that it's working passably well on its first couple of days.