BandwidthX's 'dark Wi-Fi' capacity marketplace is in trials, says CEO

BOULDER, Colo.—Executives from BandwidthX recently brought their "dark Wi-Fi" message to Colorado, where they pitched their vision of a cloud-based marketplace for Wi-Fi spectrum that would enable on-demand Wi-Fi offloading.

One reason for the trip was to enable BandwidthX executives to meet with the team at CableLabs, the Louisville, Colo.-based research and development consortium for the cable industry. The company wanted to make CableLabs aware of its blueprint for a Wi-Fi offload marketplace where buyers and sellers name their price for Wi-Fi capacity at specific times and locations.

The company hopes the consortium will, in turn, disseminate information about the marketplace to its cable industry members, which have loads of broadband capacity deployed to homes, business and other locations that often sits unused, BandwidthX CEO Pertti Visuri told FierceWirelessTech.

Mobile operators, in particular, often need Wi-Fi capacity for offloading from their cellular networks in major metropolitan areas, and cable MNOs usually have excess capacity to market, Visuri said. "The focus of our business is to create value for everybody in the industry by enabling use of that capacity and sharing the value that's created in a fair way between the ones that have that capacity and the ones that put it to use," he added.

According to Visuri, BandwidthX is seeing a "universally positive response" by companies to its service blueprint for "dark Wi-Fi," which is clearly a play on "dark fiber," the term for fiber-optic cable that has been laid out but is not being used.

"We have several commercial agreements that we've signed, and we have trials going on with companies representing tens of millions of customers on both sides of the marketplace," he said, declining to name names.

He compared BandwidthX's open-market concept to the business models of short-term rental enabler AirBnB and the Lyft ride service, which "remove friction and allocate assets between buyers and sellers so assets are better utilized."

A standard alternative to the marketplace approach would be bilateral agreements between Wi-Fi service providers or aggregators and cellular service providers. In addition, cellular service providers also can roll out their own extensive Wi-Fi network footprints, as many such as AT&T (NYSE: T) already have. But for mobile carriers seeking as-needed Wi-Fi access without long-term commitments--perhaps to maintain wireless data quality of service during a special event--the marketplace approach could come in very handy.

The sell side of the broadband marketplace equation, namely cable companies, is quite bullish about deriving new revenue streams from the infrastructure they have deployed, said Dan Zagursky, BandwidthX's senior director of business development and strategy. MSOs already sell backhaul services to cellular operators so it would not be a huge jump to extend access agreements to Wi-Fi networks, he added.

(Source: BandwidthX)

Visuri described three components needed to make the BandwidthX marketplace work: Market functions must be present on the client device as an application or a background component to an app, which might be a connectivity app offered by an ISP; there must be a cloud-based marketplace with a server farm that hosts rules and information about the Wi-Fi access points in the program; and seller and buyer consoles are necessary to provide private extranet access for participants.

"This market functionality can be added to any app today, but only on Google (NASDAQ: GOOG) Android because of some decisions Apple (NASDAQ: AAPL) has made. They don't make the radio control available to an application," Visuri said. However, Wi-Fi access points do not need any specialized software on them to work with the BandwidthX marketplace.

On a side note, in putting together its business plan, Carlsbad, Calif.-based BandwidthX has installed some heavy hitters on its advisory board, including prominent economist Alvin Roth, who received the Nobel Memorial Prize in Economic Science for his work in 2012.

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