Sarah Lacy over at TechCrunch has a recent post lamenting the dearth of high-quality WiFi service at premium hotels. Her conclusion is that hotel wi-fi ought to be a right and not a privilege, and that premium hotels are showing “greed or tech ignorance.” On the contrary, this trend may be perfectly logical for premium hotel chains. It also raises some interesting questions about the changing perception of WiFi.
As a grad student, I generally tend to stay at more humble accomodations, but on rare visits to higher-end accomodations I have noticed the same trend. To be honest, the allure of free WiFi (along with a lower price tag) makes me more likely to book a Hampton Inn. But when it comes down to it, the premium hotels know that I am not their target customer. Instead, such hotels are primarily filled with business travellers or wealthier tourists whose willingness to pay for an Internet connection is much higher than mine.
Ultimately, the decision to charge for WiFi is just good business sense, so long as guests are willing to pay for it, and so long as removing the charge wouldn’t generate a commensurate amount of revenue from additional hotel bookings. As far as quality issues, I have a feeling that the large number of hotels and other public locations offering higher-quality services will impart some competitive discipline on premium hotels and lead to better services.
With WiFi access becomming more common, such calls for increased free service may become more common. To assert that wireless Internet ought to be a right might go a bit far, however - a connection to the Web is hardly an essential human need (especially on the road).
Nonetheless, there may be some conception that wireless Internet service is a sort of public good. The TechCrunch post seems to take this view: more free WiFi networks would be welfare enhancing, but they are currently being underprovided by the market.
Unfortunately, this rationale for compelling expansion of wireless networks is not very strong – unlike classic public goods, WiFi can be excluded only to paying customers. Furthermore, increased users can slow bandwidth and hamper the ability of others to enjoy it. Ultimately, it seems as it would be efficient to let the private sector develop such services, based on consumer preferences and willingness to pay.
Of course, there is still a chance that the government will step in an declare WiFi to be a right. Broadband Internet access, which was once a premium product, has now become a cornerstone of Obama’s universal service agenda. With WiFi becoming ever more popular, perhaps there is a chance that it too will be subsidized and touted as an essential service for Americans.
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