Wireless networks for all won't be a bean feast

Industry observers have poured cold water on government proposals to allow the commercial use of wireless local networks.

Current UK law prevents companies from charging consumers for accessing local area networks (LAN) on the 2.4GHz and 5GHz radio spectrum band using 802.11b and Bluetooth technologies, but a new report recommends that this law be revoked.

In the US many businesses, including Starbucks, offer customers wireless internet access on their premises.

Michael Wall, LAN analyst at Frost & Sullivan, said: "Changing this law so people can charge for commercial service will make it more attractive for people to roll out services in this spectrum."

He added: "However, wireless LANs will be a niche market as you'd have to start the rollout in areas that have a high penetration of people with the right type of equipment, that are willing to pay for it. That means business people with notebooks plus companies that will pay the bills."

A government commissioned report on spectrum management released yesterday recommended opening up the licensing of UK airwaves to commercial applications to increase revenue in the area.

The report's leader, Professor Martin Cave, believes the commercial unlicensed use of the spectrums could profit the UK by around £500m per year.

But, a spokesman for high-street chain easyInternetCafe disagreed.

He said: "It's very tempting to dream up new revenue streams that instead create financial black holes. Even if wireless technology works, it's going to be expensive and it's the consumer that ends up paying for it."

Jason Deane, MD of internet café regional chain Quarks, said his company would back any new revenue stream but he believed it would be some time coming.

Deane said: "Our guys would have to be convinced people were going to use the technology, so we could get our money back on the kit we'd installed. I think that would take a couple of years to happen yet."