Free AT&T Wi-Fi Access for iPhones

[matticus008]

First off, I never suggested that it was "free," only that it can be provided quite cheaply

No, it can't be, and I never said you suggested it was free. It doesn't seem to be registering with you that not all wifi connections are created equal.

The rapid expansion of these "quite cheap" access points is also a short-sighted move that dramatically increases costs in the long term. Even in the near future, it fails to offer a business advantage unless free wifi is uncommon. If you can hop on someone's free wifi just about anywhere, a consumer will not factor "who offers free wifi" in their buying decision, since it requires no planning.

Retailers who think they need that competitive edge offer it. Those who don't, do not. Not sure why I have to explain this over and over again.

You don't. The choice of offering a casual, free connection is not, however, the issue, which might explain why you keep offering the above irrelevant explanation.

Second, perhaps you don't understand the concept of marginal cost. The cost of the line is the same, no matter how many connections are made through it.

The marginal cost of the second connection is nearly as high as the first, but this is irrelevant, as the store has just one connection. Marginal cost only comes into play with multiple units. You're conflating marginal cost and average total cost. The cost of the connection is a fixed cost, and the per-user transaction cost is also fixed.

Once the monthly cost of the connection is recouped the monetary cost to serve additional users is near-zero, but the opportunity cost is high, because it reduces the quality of service. Opening that service to a larger crowd of hundreds of users wouldn't directly cost them any money itself, but reduces service levels to a "corner coffee house" connection. This causes the people who are relying on the superior connection at Starbucks to lose that service level. Neither of these effects is marginal cost, however.

Starbucks has chosen to cater to a different audience. The cost of providing "free" wifi, therefore, threatens that upmarket audience, and based on their projections, the loss of business customers would exceed any new customer gains.

The vast majority of the cost is getting that first connection. The marginal cost of every connection after that is essentially zero.

No, it's not. The cost would be another $500 line, plus whatever increase in other contract charges and additional equipment would come from it. Your understanding of marginal cost is deeply flawed, if this is the explanation you're advancing.

The cost of the connection is a fixed cost. There is no marginal cost issue. You don't get a scalar advantage by cutting one pie into increasingly smaller pieces.

 

[IJ Reilly]

No, it can't be, and I never said you suggested it was free. It doesn't seem to be registering with you that not all wifi connections are created equal.

No, it's my point which is not registering with you, and you also are not following the concept of marginals cost. You're also starting to get a bit hostile in this discussion, so whether you've understood my points or not, I'm done.

 

[matticus008]

No, it's my point which is not registering with you, and you also are not following the concept of marginals cost.

That is not the case. Marginal cost has nothing to do with the number of users on a connection. There's no "marginal cost" of adding roommates to your house--marginal costs would be adding more structures to your property for roommates, not dividing a completed whole.

You are thinking of average total cost, as I helpfully pointed out to you, but rather than reframe your statement accurately, you simply repeated your erroneous "you don't get marginal cost" argument.

Your point is that providing a free-to-customer, casual wifi connection is not expensive, and that it incentivizes patronage at one location over a competitor without it. That point was taken in the first reply as valid in the short-term and low-yield but invalid in the long run and at ubiquity. It could have ended there, but you kept going. Your extension that logic to Starbucks and to introduce an argument saying that it is "overkill" for Starbucks to use the equipment it does and that "marginal cost" would make extending the service to anyone cheap are both specious arguments without any basis in fact. Any hostility perceived on your part is merely exasperation at your persistence with faulty reasoning.

 

[dom7]

So what ever happened to this? Free Wi-Fi access for all iPhone users would be awesome. Does anyone know the status on this service? Will we see this on friday, July 11th?

 

[t0mat0]

That is not the case. Marginal cost has nothing to do with the number of users on a connection. There's no "marginal cost" of adding roommates to your house--marginal costs would be adding more structures to your property for roommates, not dividing a completed whole.

You are thinking of average total cost, as I helpfully pointed out to you, but rather than reframe your statement accurately, you simply repeated your erroneous "you don't get marginal cost" argument.

Your point is that providing a free-to-customer, casual wifi connection is not expensive, and that it incentivizes patronage at one location over a competitor without it. That point was taken in the first reply as valid in the short-term and low-yield but invalid in the long run and at ubiquity. It could have ended there, but you kept going. Your extension that logic to Starbucks and to introduce an argument saying that it is "overkill" for Starbucks to use the equipment it does and that "marginal cost" would make extending the service to anyone cheap are both specious arguments without any basis in fact. Any hostility perceived on your part is merely exasperation at your persistence with faulty reasoning.

What a smack down....

So what's the word - Is the Starbucks deal coming online on the 11th - seems to have gone off the radar. AT&T's soon. I haven't really seen any negative feedback about the UK wifi version (Cloud, BTOpenzone) so am wondering how it is going over in the States.

 

[Chrisgold11]

do you need 3g or wifi?

I have a question about the iphone 3g. Do you need access to a 3g network or wifi to use the internet, or can you use without those?

 

[GeekLawyer]

I have a question about the iphone 3g. Do you need access to a 3g network or wifi to use the internet, or can you use without those?

The only other option is EDGE. iPhone 3G will drop back to EDGE if there's no 3G or Wi-Fi available for internet access.

 

[IJ Reilly]

What a smack down....

And pretty much completely wrong, too. Turning a simple, direct concept like marginal cost into an impossibly convoluted one does not make the argument any more correct.

As for what happened to the "free wifi at Starbucks," the fact that it has been delayed indefinitely (apparently) might have something to do with their economic woes and closing so many stores.

 

[joejoejoe]

And pretty much completely wrong, too. Turning a simple, direct concept like marginal cost into an impossibly convoluted one does not make the argument any more correct.

As for what happened to the "free wifi at Starbucks," the fact that it has been delayed indefinitely (apparently) might have something to do with their economic woes and closing so many stores.

i was at a Starbucks yesterday in Manhattan and used the wifi to browse the starbucks music in the iTunes store...

 

[IJ Reilly]

i was at a Starbucks yesterday in Manhattan and used the wifi to browse the starbucks music in the iTunes store...

Last I heard (front page here), Starbucks had withdrawn the service after making it available for a week or so. One of the issues IIRC was the ability of anyone with a valid AT&T mobile number to access it, even on an iPod touch. Possibly I am misremembering, which wouldn't be surprising, since I don't own an iPhone and never go into Starbucks.

 

[matticus008]

And pretty much completely wrong, too. Turning a simple, direct concept like marginal cost into an impossibly convoluted one does not make the argument any more correct.

Don't start again. It's not convoluted at all: marginal cost is additive, not divisive. The "marginal cost" of dividing a whole is zero. It is the average total cost that decreases with fractional shares. Conflating a series of established concepts doesn't make anything easier, it just makes it inaccurate. Complaining that a straightforward difference is "impossibly convoluted" doesn't make you look any better.

I can't help if if you can't see that there are more variables to be weighed than the number of users on a connection.

 

[IJ Reilly]

I never said any of this, so I presume I don't have to defend it. Nice try, anyway.

 

[beetlejelly]

At Starbucks, the ATT wifi portal asks for a username and password. I tried my ATT web portal login (phone number and password) but it didn't work.
I called ATT and after waiting on hold for 20 minutes I was told by the ATT agent who had to check with someone else that there is no free wifi service for iphone users... not that an ATT employee would actually know anything about there products.

 

[DiamondMac]

The Starbucks, the ATT wifi portal asks for a username and password. I tried my ATT web portal login (phone number and password) but it didn't work.
I called ATT and after waiting on hold for 20 minutes I was told by the ATT agent who had to check with someone else that there is no free wifi service for iphone users... not that an ATT employee would actually know anything about there products.

I have tried several times in the last few weeks to connect at Starbucks and have never gotten it free