Free nationwide Wi-Fi is one step closer to reality, now that FCC tests show that a chunk of available spectrum can support a countrywide network without interfering with rival spectrumholders.

Don't ditch your access provider just yet. This is, again, just one step in what will likely be a very long and winding road toward skinflint broadband.  

The auction itself is still at least several months away. The eventual winning bidder will also have plenty of time to roll out the free product. The government is requiring that at least 50% of the nation be covered within four years, and 95% of the country within 10 years.

And lest you get all excited by thoughts of all-you-can-surf wireless, know that this isn't a charitable initiative. At least one likely bidder -- startup M2Z -- is looking at an ad-supported model, with paying subscribers receiving faster access. In other words, the free product is unlikely to satisfy cyberspace speedsters. The FCC will also make sure that free access is filtered; file-swappers and fans of X-rated sites will likely have to look elsewhere.

Still, canvassing the country with free connectivity will be a game-changer, full of opportunities and challenges alike. Let's look at both sides of the story.

The losers
The telcos and cable companies providing Web access may get hurt the most, especially among their entry-level pricing plans. If cheap, slow connectivity is what those consumers want, a free ad-supported model will hit the hot spot.

Most access providers are gargantuan companies with diversified product lines, but some are pure ISPs like Earthlink (NASDAQ:ELNK), and to a lesser extent, United Online (NASDAQ:UNTD). United Online has actually been moving away from its dependency on its Juno and NetZero dial-up offerings, acquiring properties like MyPoint, Classmates.com, and most recently FTD. Earthlink has not.

Wireless carriers should also feel the sting. Pitching subsidized handsets with expensive data plans won't be an easy sell if the public turns to Web chat alternatives.

Premium entertainment providers may get pinched, too. Sirius XM Radio (NASDAQ:SIRI) could face an uphill battle against free, universally accessible Internet radio. Local network affiliates, and even the cable giants, will suffer if couch potatoes begin to stream on their own terms.

In short, if you provide a premium service that has a reasonable Web-delivered alternative, free Wi-Fi is not your friend.

Another unlikely loser is Microsoft (NASDAQ:MSFT). Free users are likely to turn to cheaper Linux-flavored operating systems, bypassing premium productivity software like Microsoft Office in favor of free Web-stores apps like Google Docs. Cloud computing is coming anyway, but free nationwide Wi-Fi will make it even more pervasive.  

The winners
Free Wi-Fi's aim is to provide deeper market penetration. That will naturally benefit e-commerce and online advertising companies, but investors need to be realistic. Folks who flock to free connectivity won't be voracious shoppers at Amazon.com (NASDAQ:AMZN) or desirable leads for sponsors on Google (NASDAQ:GOOG).

Still, free Wi-Fi should be a "net" positive for both companies. If you're shopping at the mall and you can hit Amazon for a little comparison-shopping -- many people do so already, but more will follow in a free Wi-Fi future -- Amazon will be treated to incremental sales.

Google will also be a winner, especially if the top bidder turns to this online ad king to monetize its landing page.

Another wave of profit may come from display advertising, an area where Yahoo! (NASDAQ:YHOO) excels. Yahoo! knows that it can't compete with Google on the paid-search side, but it knows how to milk the most out of less lucrative brand-enlightening display ads.

The scorecard
Dump the losers? Back up the truck on the winners? Not so fast. We may still be several years away from a reality of free countrywide Wi-Fi. That's a lot of time for the companies that now look like losers to arm themselves with the right tools to stay relevant.

Sirius XM Radio already has a Web-streaming product; an ad-supported freebie could help it compete with free Internet radio and serve as a gateway drug for the premium product. Phone and broadcasting titans have too much at stake to go down quietly, so expect them to map out ways to thrive in a changing environment.

The road is long, but it's never too early to study the map.

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