in the several American airports that I have been to wifi day pass is fairly expensive. Plus, there is apparently only one wifi provider in each, so there is zero competition. And IMHO wifi is something pretty important in today’s society, it’s not something to be shrugged off as a luxury like airport’s Dunkin Donuts concession.
Well, so could the government regulate this issue? E.g. could they require that each airport allow multiple wifi providers to set up shop and that the concession fees imposed on them would be “reasonable” so that these providers, competing with each other and not being overburdened with quasi-taxation from the airport, could provide cheap service to the passengers?
If the federal government can make a vaguely plausible case that WiFi service constitutes interstate commerce, they can regulate it all they want.
The state government where the airport in question exists can also regulate business practices, including enforcing competition in some sectors.
That said, you’d be hard-pressed to find many sympathetic legislatures who think airport Wifi is an important issue. And you’d meet very few airport administrators who would want to willingly give up lucrative concession contracts.
But this is the crux of the matter. There ought not be any such animal as a monopolistic concession contract. It strikes the very heart of American business - competition. Competition means active merchants competing when offering services, not competition by bidders against each other.
It reminds me of the bullshit scenarios found in many stadiums and arenas around the country. One firm wins the concession contract and they proceed to provide the shittiest service to a captive clientel. They have no incentive to perform or to improve.
It almost brought a tear to my eye the first time I went to Skydome and saw multiple vendors all fighting for my customer dollar. I never had such good service.
Do we know for a fact that airports refuse to sign multiple wifi providers? Or is it perhaps the case that there is not an attractive market for the second wifi provider? For example, you can’t make a Burger King open up next to a McDonald’s. Doesn’t most antitrust action of this type take place because one company sues another? If the second wifi provider wants the gig bad enough, I think the route to take is for them to sue. I wouldn’t be surprised if the interstate commerce thing did fly, since the wifi company probably operates in many states, people use the network to purchase things all over, etc. Interstate commerce is usually interpreted broadly.
Are there technical issues with maintaining multiple wifi networks in the same space?
Presumably you’d have to run network cabling and mount wireless access points throughout the airport. I imagine that there is a non-trivial cost involved in doing so, so the vendor that agrees to this project may do so on the basis that they will have exclusive rights to the airport. Similarly, you may lease a location in a mall to open a fast-food hamburger restaurant on the understanding that no competing fast-food hamburger restaurant will also be granted a lease.
On the other hand, why should an airport operator NOT have the ability to choose which concessionaires operate on its property? Airports have traditionally restricted which companies install pay phones in the airport, not to mention things like rental car companies and even taxi service.
I don;'t know, but in most airports in the US I’ve travelled through, it’s either free wi0fi provided by the airport, or paid wi-fi by Boingo. Just Boingo. I’ve never seen any other networks, although there could be airports with more than one network, or a single paid wi-fi provider other than Boingo. There was always signals for other networks, but they weren’t airport-wide; a restaurant here and there, or an airline club.
In my experience, it seems that larger airports (O’Hare, LaGuardia) charge you to use WiFi, and smaller ones don’t (Richmond, Harrisburg). Of course, this is an anecdotally-small sample, so it may not be representative.
But basically, there IS competition. You don’t need to use the airport-provided WiFi. You can get wireless access for your laptop from most cellular providers. Just because the technologies are not identical does not mean that there isn’t a competition going on. Just like satellite radio is in competition with internet radio and regular radio; they are all using different technologies but satisfying equivalent needs.
Denver has free wi-fi; a number of others do too.
Recently they’ve changed to ad-supported wi-fi. Annoying, but I suspect that is the model that will catch on more broadly.
I agree that paying for access is expensive and annoying. Those of who travel a lot usually carry air cards for just that reason. Per-use can get very expensive and monthly contracts are too limiting. Wifi in the air on the plane can cost 10-13 dollars just for a single flight…
I’d bet it’s the airport authorities and not the companies, that are driving the monopolies. Everyone gets addicted to money. Think airport parking, for instance.
But why is it not in the airport authority’s interest to sell concessions to multiple providers? If they can get more for selling to a single provider, isn’t that a reflection of the fact that the basic market won’t support two providers?
Also, good point about restaurants in airports offering wifi and portable wifi. I think any reason for government to step in goes out the window with those options.
There are a couple of solid technical reasons for WiFi “monopolies” at airports.
There are only 3 usable frequencies in the standard WiFi band (1, 6 and 11), anything else will cause interference, and multiple WiFi access points on the same channel will interfere with each other. So let any company put access points in the airport, and they all end up walking over each other and having a degraded customer experience for all.
Also, airports generally weren’t really built with they type of infrastructure needed for WiFi in mind. You end up with ethernet switches in very odd, cramped places and such. In some places, you might be able to get another provider’s stuff in, but after that things would get really difficult.
Now, for many of the higher-grade access points out there, multiple SSIDs can be used. This solves the infrastructure and interference problems, as the access points, switches and routers would be set to be able to handle multiple providers. Of course, this can result in the problem where one provider is running the infrastructure while carrying the service for a direct competitor–problems then often end up being blame games.
Nope: that’s the purpose of monopolization. Boiled down, you can service the cream and ignore the rest. What happens is that the airport can make more money from one provider (who charges high rates with no competition) than from two, who would then have to cut rates.
As pointed out, government is quite often runnig the show one way or another, even if they farm out management to a private concern. Why would you step in to make yourself less money?
Seems perfectly OK and capitalistic to me - companies competitively tender for the contract to be the sole supplier of service X in location Y. That’s not monopoly - it’s a market. It just happens to be a market that doesn’t drive down the end cost for the consumer.
Wouldn’t government imposition of multiple contracts be a gross interference in what is currently a self-regulating market?
I don’t travel extensively, maybe a few times a year, but the oddness of airport business practices is sometimes bizarre. There were some fast food stand in line restaurants/concessions in some airports on the way to Las Vegas and California where it appeared (based on employee comments) where tipping was expected for handing you a sandwich, and ringing up up your meal.
I disagree. There’s no reason to lump all the “vendor sites” within an arena and offer it to the highest bidder. Sell each individually, or better still, say there’s 50 sites within a venue. Offer them to the 50 highest bidders.
I feel capitalism/free markets go out the window whenever there’s a “captive audience”.
While we’re at it - strike all references to the other ridiculous tenet of commerce, “Buyer beware”. Why should customers be the guinea pigs in any transaction?
Should not the venue be allowed to decide how they want to run their business?
If it was an ordinary shopping mall that decides (for whatever reason - profit or aesthetics etc) it only wants one pizza restaurant, one coffee shop and one amusement arcade, shouldn’t they be free to make that decision?
Sole concession and sole supplier arrangments are just a business model that some businessses choose to operate to make the best profit out of a venue that many suppliers are hungry for. A free market should let them choose to operate in that way.
Edited to add: I won’t try to defend the above in cases where the venue itself is a government monopoly - not sure if that applies here.
I think the issue is that airports are at least quasi-government venues. But yeah, I agree if you own a mall, you should be able to rent it in the way that suits your business model. Making sure every mall has two pizza places is too much government.
I think there is a certain practical element that would explain why, in a highly regulated space like an airport, you would not want to go to a completely free-market model (think e-Bay meets flea market stalls) for vendor spaces in the airport.
I realize that airport wifi seems expensive to the consumer, but do we know for a fact that it’s a particularly profitable market segment? Is the ability to check basic online info on phones going to eat into a ton of that market?
I cannot defend any model where the fallout is “no-choice” for the customers.
Shea Stadium in New York was one of the most egregious examples of a government handed out monopoly to one concessioneer, who promptly hired the most talentless indifferent slowest employees ever assembled. If you wanted to eat you had to suffer through it. No choice. Go to a different booth and it was run by the same people, and you got the same (lack of) service. Sure they made money because the prices were astronomical. Did they have commiserate expenses? No, just a captive audience, who couldn’t complain to anyone.
Contrast to Toronto SkyDome, with actual competing vendors, where customers weren’t gouged because there was only one game in town. I think the Oakland Coliseum (baseball) was also a multi-vendor situation too. No gouging there either.