The Associated Press is reporting that Verizon Communications Inc. is turning off the free wireless Internet access it beams from New York City telephone booths for DSL subscribers who use laptops away from home or the office.
The company revealed the decision on Wednesday as its Verizon Wireless unit announced plans to accelerate the deployment of a fee-based cellular Internet service in the New York area.
The free service, which will be phased out over the next two months, was provided by installing short-range Wi-Fi transmitters in hundreds of telephone booths starting in May 2003.
Back then, Wi-Fi was exploding in popularity and Verizon was trying to jump-start its DSL business in a bid to catch up with rival providers of high-speed broadband service, particularly cable TV companies.
The realization that phone booths might serve as valuable real estate for providing wireless Internet service came at a time when Verizon and other Bell companies were cutting back sharply on public phones because a growing number of people were using cell phones to make calls from public places.
But with Verizon Wireless spending billions to upgrade its cell network for speedier Internet connections costing up to $80 per month, the company has decided the time has come to pull the plug on the free Wi-Fi network.
The company, which owns Verizon Wireless in partnership with Britain's Vodafone Group PLC, has spent $138 million so far this year upgrading its cellular network in the New York metropolitan area after a $475 million investment in 2004.
Verizon said the service, based on a technology called EV-DO, offers far wider coverage and seamless connectivity for roaming laptop users. A Wi-Fi signal, though usually several times speedier than the cellular Internet service, can only travel several hundred feet.
There are currently about 380 Wi-Fi hot spots providing the free service from Verizon phone booths, nearly all of them in Manhattan with a few in Brooklyn. The first to be turned off will be those that are least used, spokeswoman Bobbi Henson said Thursday.
Although the hot spots are not expensive to operate, Verizon no longer views the service as an attractive from a business perspective.
"The usage level, as other alternatives have become available is not enough to justify continuing it when there are other options. A lot has changed over the past two years in terms of wireless access," said Henson. "Everybody's trying to look for a business model around (Wi-Fi).... But the better business model in our mind is the EV-DO network."