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How Comcast's Wi-Fi Hotspot Plan Could Anger Even More of its Customers

Comcast (NASDAQ: CMCSA  ) , the cable and Internet service provider, has an aggressive plan to reach 8 million Xfinity Wi-Fi hotspots by the end of 2014, covering 19 of the country's 30 largest cities. Many of those hotpots are the traditional kind located in bookstores, cafes, and other retail locations. But the ISP also plans to add hotspots in a more controversial way.

The company has begun rolling out technology in parts of Texas and Washington that turns home wireless routers into public Internet hotspots by broadcasting a separate WiFi signal from the router that can be used by other Comcast/Xfinity customers. The maneuver has been receiving mixed feedback from customers. Some appreciate the added free access points while others are not pleased about having strangers accessing the Internet through their routers.

The feature can be turned off but Comcast released a statement, reported by GeekWire, urging customers not to do so.

"We encourage all subscribers to keep this feature enabled as it allows more people to enjoy the benefits of XFINITY WiFi around the neighborhood," it read, also including instructions for disabling. 

The move may not be popular with customers but it gives Comcast huge additional reach. The company reported over 21 million high-speed Internet customers in the first quarter of 2014 and all of those represent a possible way for the company to expand its public Wi-Fi network.

What is Comcast trying to do and why is it doing it?

Comcast wants to protect its high-speed Internet customer base by offering those same customers a mobile Internet solution. The company has seen huge growth in out-of-home Internet sessions, estimating that nearly 200 million have been initiated on the Xfinity Wi-Fi network so far this year. That's a 700% increase from the same period last year.

The company also acknowledged in a press release that Cisco predicts that 88% of all U.S. data traffic on mobile and portable devices will travel over Wi-Fi by 2018. 

"Wireless access is increasingly important to our customers, and we are building a network that not only meets today's needs but also stays ahead of tomorrow's demands," said Marcien Jenckes, Comcast's executive vice president of consumer services.

The company brought in $2.75 billion in revenue from high-speed Internet in the first quarter of 2014. If more and more Internet traffic is moving to Wi-Fi, it makes sense to offer increased access outside the home as a perk to customers or it risks losing them.

The challenge for Comcast is that offering lots of free hotspots only helps users if those spots are where they want to use the Internet. For the service to be valuable to customers it has to be as big as possible. Leveraging its massive customer base is an ingenious way to give the company the broadest possible reach.

Why are people angry?

While some people simply don't like the idea of people piggybacking on their Internet access and others are afraid their personal data may somehow be compromised. Still more are angry that Comcast made the service available on an opt-out rather than an opt-in basis. 

Comcast dismisses the data breach fears saying that the hotspots – which appears as "xfinitywifi" for those searching – is completely separate from the home network. "Someone accessing the Net through the hotspot can't get to the computers, printers, mobile devices, streaming boxes, and more sitting on the host network," Dwight Silverman wrote in a Houston Chronicle blog post.  

Silverman also reported that Comcast says the added users won't slow down Internet access for the people actually paying for the home connection. The visitors and the owners won't be sharing the same bandwidth. Instead additional capacity will be allocated by the ISP to handle the additional traffic.

Comcast did mail customers -- at least the ones affected in Texas -- a notice about the new service before it launched, but it did not ask their permission. That's certainly the fastest way to expand coverage, but the backlash could grow as people realize what is happening.

Smart, but a little evil

Very few companies are brazen enough to sell customers a service then piggyback its own product on top of it. But Comcast has not become one of the more disliked companies in the country by always playing nice.

This strategy may work because an awful lot of Comcast customers won't realize it's even happening. How many people read notices sent out by their ISP? 

The company certainly could have handled the roll-out in a more above board way -- perhaps by making it opt-in, but only offering access to the added Wi-Fi spots to people who participate. Ultimately that may not matter because even if half of the company's 21 million customers opt out that would give the company 10.5 million new, free hotspots -- well more than its entire stated goal. 

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Read/Post Comments (14) | Recommend This Article (9)

Comments from our Foolish Readers

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  • Report this Comment On June 13, 2014, at 10:30 AM, jpanspac wrote:

    This article is a little confusing. The only Comcast Internet hardware I have is a cable modem. I wasn't aware they also supply Wi-Fi routers.

  • Report this Comment On June 13, 2014, at 11:02 AM, barrieB62 wrote:

    I use comcast for my basic internet and am charged a ridiculously high $84 a month. I have to use them because I prefer cable internet, and in my town, like most towns, the cable company is a monopoly with zero competition. I do not currently live in the areas where comcast is currently doing this, when it comes to my area, I will definitely turn the ability off. If comcast wants to use my router to provide service to others, then they can bloody-well pay me for that service I am providing.

  • Report this Comment On June 13, 2014, at 11:13 AM, mwcrosbycpa wrote:

    jpanspac, your cable modem probably also functions as a wireless router, as mine does.

    My only problem with this as a Comcast internet subscriber is that they rent me the modem. If they are going to use the modem that they're renting to me to provide service to others, then they ought to reduce my rent. The rent is not expensive, but its the principle of the matter.

  • Report this Comment On June 13, 2014, at 11:24 AM, kennyhobo wrote:

    I use this service occasionally. I turn off my own Comcast router from providing the service. The best of all worlds.

  • Report this Comment On June 13, 2014, at 11:52 AM, Swordedge wrote:

    Comcast is showing why monopolies are usually horrid.

  • Report this Comment On June 13, 2014, at 12:15 PM, bclockle wrote:

    I switched providers following this move by Comcast. I did not like the idea of them using equipment that I pay for to do this. Making it an "opt-out" feature also comes across as forceful - I hope they rethink their strategy and use a more tactful approach as they inevitably continue the rollout.

  • Report this Comment On June 13, 2014, at 2:16 PM, ComCrustuser wrote:

    Yeah I don't have a Comcast issued wireless router just a cable modem and obviously I'm not interested in providing my neighborhood with free WiFi they can pay just like me. Not to mention who then becomes responsible if my neighbor downloads child porn on the free WiFi I provide him with through my equipment? Cops already bust down peoples doors who have made the mistake of leaving their router open to public use.

  • Report this Comment On June 13, 2014, at 3:29 PM, beachdudeca wrote:

    Okay here is the issue , and how Comcast is opening themselves to Billions in liability.

    The infrastructure was paid for by parties other then Comcast, since installs are not free, and modems are not free a customer,. Because of this a suit can be brought that any revenue generated from a shared signal is due to the party that paid for to have the lines and modem installed.

    Comcast could also find itself liable for Electricity Bills, for time spent to replace Modems that had increased usage, and for all and any damage that believed to occur due to usage other then the party who is responsible for the equipment.

    Also, Comcast might be sued to share any of the Fees associated with being able to access this network with the parties that paid for the installation

    I see Massive Law Suits in the Billions ,

  • Report this Comment On June 13, 2014, at 4:04 PM, zeroryoko1974 wrote:

    What are they going to do, go to different ISP? LOL good luck, they have a monopoly, that is why you already hate them

  • Report this Comment On June 13, 2014, at 5:53 PM, cdkeli wrote:

    Comcast is employing this a simple marketing scheme. Their existing customer base with pay for this with increasingly high rates and increasingly poor bandwidth thus pitting customers against one another and justifying Comcast's intent to dispose of Net Neutrality. Comcast wins out by adding more customers and relegating the basic users to a low performance performance tier in favor of bigger and wealthier clients.

    And the FCC does nothing,,,

  • Report this Comment On June 13, 2014, at 7:25 PM, j3xs wrote:

    Well I have a wireless router that cost me 100.00 plus the ridiculous bill I pay just for internet service I will be turning that feature off. My money, my decision.

  • Report this Comment On June 14, 2014, at 2:35 AM, cri33 wrote:

    jpanspac can buy or "rent' a wireless router from Comcast. I suggest you buy one from a store instead of renting one. A cable modem does not put out a Wifi signal whereas a wireless router does. But wireless router has a cable modem built into it. The easiest way to tell the difference is that on Comcast wireless routers, there are lights on the front panel, one of which is for Wifi. There is no Wifi light on a cable modem because it is not capable of putting out a radio signal like Wifi. In any event, I suggest one buy a Comcast compatible modem or wireless router instead of renting one. It is much cheaper in the long run.

    As for the hot spot idea, that is a good one unless you don't want to share your Wifi signal. If a lot of people use it performance will decline. Also if you do any kind of financial work using your computer its probably best not to share yours signal.

  • Report this Comment On June 14, 2014, at 2:38 AM, cri33 wrote:

    j3xs can get a second hand wireless router much cheaper than $100 that will probably last many years.

  • Report this Comment On June 14, 2014, at 1:53 PM, JohnG3 wrote:

    If you want to opt out, in theory, you only need to sign in to your comcast account.

    Select Users & Preferences then beneath Service Address select Manage Infinity WiFi.

    There have been reports that you must re opt-out every time your router receives a 'refresh' signal.

    download and run a program such as Net Surveyor. It will show you what nearby access points you have.

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Daniel B. Kline

Daniel B. Kline is an accomplished writer and editor who has worked for the Microsoft's Finance app and The Boston Globe, where he wrote for the paper and ran the business desk. His latest book "Worst Ideas Ever" (Skyhorse) can be purchased at bookstores everywhere.

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