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Has the rainbow landed?

By Scott Bradner

A few months ago I wrote about Project Rainbow (The bits at the end of the rainbow, nww July 29) and now the rainbow is trying to land renamed as Cometa Networks. This is Project Rainbow without two of the would-be major players and it aims to bring up a nation-wide 802.11-based wholesale "hotspot" network starting in 2003. Their target is to have a wireless base station within a 5 minute walk in major urban areas and within a 5 minute drive in rural areas. Users would be able to use the network of base stations to access their normal Internet service providers and mail systems. Good stuff if they can figure out how to make money at it.

The three main players in Cometa (http://www.cometanetworks.com/) are AT&T, IBM and Intel. AT&T will provide the data network to interconnect the base stations, IBM will provide the installations and support systems and Intel Capital, along with two venture capital firms, will provide the funding.

The two Project Rainbow players missing from the Cometa roster are Verizon and Cingular, two big cellular phone companies,. This is the specific sector that may be the most impacted by the rollout of 802.11-based services, since the cellular industry has been betting very big bucks on third-generation (3G) cellular technology and spectrum licenses. Competition from 802.11-based networks, which do not have to pay for the use of spectrum will not be fun. In fact the entire cost of the deployment of the 20,000 base stations Cometa Networks is planning is less than the cost of a single spectrum license. Verizon is hedging its bets and experimenting with its own 802.11-based service in the Boston area.

Cometa may not be an ideal name, it sounds somewhat like a communicable disease and Google comes up with 138,000 hits including a French report on UFOs and defense (http://www.cufos.org/cometa.html), and they are diving into waters where there are already quite a few swimmers. Companies like Earthlink connected Boingo Wireless and HereIAre Communications have been deploying base stations and offering services for a while. Particularly nice is Earthlink's setup which lists open free private base stations along with the Boingo ones on its web site.

Cometa does have the big-name backers that may be the key to success but success will only happen if they can get the right locations for the base stations and if they price the service such that people will be willing to pay for it. Cometa is assuming that they will be able to work out agreements to place equipment in major hotel and retail chains, universities and real estate firms. I hope these folks do not want too much money for the use of their property.

The biggest problem with these types of services has been the inflated expectations of the service providers of the willingness of people to pay big bucks for it. Unless you live on the road it will be hard for most people to justify more than a few 10s of dollars per month. It will be interesting to see if Cometa can figure out a business model where a few 10s of dollars per month per customer will make a profit.

disclaimer: Harvard does not often talk in terms of "a few 10s of dollars per month" so the above must be my own opinion