McDonald’s Corp. will soon start offering free wireless Internet access at its U.S. restaurants according to a recent report in the Wall Street Journal. Starting in mid-January, McDonald’s will lift the $2.95 fee that it had charged customers for two hours of Wi-Fi Internet access, available at about 11,000 of its 14,000 domestic locations, McDonald’s USA Chief Information Officer David Grooms said in an interview.
The free access is a partnership with AT&T (T), which provides McDonald’s stores with wireless Internet. Free Wi-Fi is part of the fast-food chain’s transformation from its hamburger roots into a hang-out destination. Over at Mashable.com they speculate that McDonald’s plans to start selling frappes and smoothies in mid-2010 as another part of the transformation.
Mashable.com writes that at&t purchased the Texas-based Wi-Fi hotspot operator Wayport in 2008 for $275 million in cash. The privately held company administered over 80,000 Wi-Fi hotspots all over the world for airports and large organizations like Wyndham, Four Seasons, and McDonald’s restaurants nationwide.
Stacey Higgenbotham over at GigaOm wrote in 2008 that at&t made this deal to off-load the mobile data network, “allows AT&T to provide its customers with more places to do their bandwidth-sucking applications. Already, AT&T is willing to let iPhone and BlackBerry users access its Wi-Fi hotspots free at Starbucks. It also means AT&T can hold out a bit longer before deploying its 4G LTE network, which is designed for data.”
This is nothing but a holding action so at&t can launch more rich-content phones like Apple’s iPhone and the Blackberry Bold and keep their old network in place. AT&T already requires iPhone users to use their Wi-Fi connection to download files from iTunes and prohibits bandwidth-intensive applications such as P2P sharing. According to GigaOM, part of the reason for this is the limitations of its HSPA network. While fast, it isn’t designed to handle the continuous streams of data a song download or video upload requires. 3G is still designed for voice traffic, which is intermittent and much less bandwidth-intensive. The network has a data overlay, but that, too, is designed for bursts of data and not continuous streams. If too many people need continuous streams of data get on, it clogs the network, leaving other subscribers unable to access it.
This move will allow AT&T to delay deploying its 4G LTE network, and charge heavy users more. Ralph de la Vega, president, and chief executive for mobility and consumer markets at at&t said “We’re going to try to focus on making sure we give incentives to those small percentages to either reduce or modify their usage, so they don’t crowd out the customers on those same cell sites,” he said. The company might consider a “pricing scheme that addresses the usage,” Mr. de la Vega said in the New York Times.
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There are questions that this partnership between McDonald’s and at&t raises:
- Will the service be ‘gated’ via some kind of time code on your receipt, or will be truly free?
- Will usage be monitored?
- What does the idea of people hanging out at McD’s to troll Facebook do to the idea of a “fast food” restaurant?
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Remember, you get what you pay for.
Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedIn, Facebook, and Twitter. Email the Bach Seat here.