Nation-Wide VoIP Network by Stealth?

My discussion with Steven Graff, who recently joined WWJ as marketing guru and maker-of-all-things-happen, suddenly turned technical. “Imagine being able to throw the switch on a network of several million WiFi hotspots located all over Japan. What if Yahoo’s modems permitted Yahoo to pass traffic through the user’s DSL connection and WiFi air interface independent of the home network? Today’s Viewpoint is a fable which, were it true, would shake Japan’s mobile market to the core.

Myself and WWJ video producer Lawrence Cosh-Ishii have been having numerous email and phone discussions with Steven Graff, a highly experienced advertising industry insider who recently joined WWJ as head of marketing.

Naturally, most of our discussions relate to site traffic, subscription sales, finding a sponsor for WWJ, and other business matters. But one discussion this week suddenly turned technical, animated by the fact that all of the new modems Yahoo! BB is sending out have an 802.11g WiFi card that fits in a top slot. “The modem also comes with a matching 802.11g PC Card for PC-card slot-equipped computers (mostly laptops),” typed Steven.

Softbank’s Yahoo! BB service is doing rather nicely; they’ve signed up over 4 million home users and have bundled the DSL service with ultra-cheap Internet telephony and mobile access via Yahoo! Mobile, a (still modest and by no means nation-wide) WiFi hotspot network established by Softbank and several chain partners including MacDonald’s.

Doubtless, Masayoshi Son, the feisty head of Softbank, is forcing market-leading, 900-pound-gorilla NTT to look over their shoulder.

Steven, his marketing-savvy mind obviously in high gear, asked what could Softbank possibly have up its sleeve by supplying WiFi cards with their DSL modems — which are given away for free at hundreds of train stations nationwide (salarymen can pick up a modem on the way home and be surfing at high speed and calling for super cheap before the kids get back from juku cram school…).

His answer, while it’s just conjecture and probably has no basis in reality, was simple: Softbank is going for stealth installation of a nation-wide public WiFi network.

While I was initially tempted to shrug this idea off as the ravings of an over-crushed Yamanote-line commuter, I hesitated; First, Steven doesn’t even use the Yamanote line, and second, there are a number of news reports out recently that indicate someone, somewhere, must be thinking of massive public IP access that avoids 3G licensed spectrum.

This week, Fujitsu Labs said it’s developed a dual-mode IP-and-GSM (or IP-and-PHS) phone (WWJ will have video coverage coming up soon).

Further, in the US, landline carriers are promoting DSL using WiFi; Qwest has announced it will include a WiFi networking solution in its DSL modems, and Verizon and BellSouth now give away (after mail-in rebates) WiFi home routers to new subscribers.

Steven then got on a roll.

“Imagine being able to throw the switch on a network of several million WiFi hotspots located all over Japan. What if Yahoo’s modems permitted Yahoo to pass traffic through the user’s DSL connection and WiFi air interface independent of the home network? What if the Yahoo! BB DSL-and-phone service agreement said the user agreed to permit such traffic through their modem?”

“Hell, it might already be worded as such,” he added with an electronic flourish.

The conclusion of such an exercise, according to Steven, could be astounding. “In the not-too-distant future, shortly after working the corridors at the Ministry of Posts and Telegraph, Yahoo! Japan announces to the world that 10 or maybe 20 or 30 percent of their 6 or 8 million users are WiFi-equipped and have agreed to be part of VoIP history.”

“Imagine, in typical Son fashion,” Steven added, “that Yahoo! pisses the whole market off and gives away the phones (at 3,000-yen wholesale cost) to current BB phone subscribers and includes the devices with all future modems, pre-configured. Quite an incentive to become a Yahoo! BB phone subscriber isn’t it?”

“From a marketing point of view, Yahoo is already halfway there with their current branding and BB Phone service offering; they have got the plug-and-play game down pat. Hell, they might even be able to take ‘IP phone’ — a very complicated concept — and substitute ‘BB phone’ in the mind of the consumer.”

I asked what would be the end result in the millions of Japanese consumers’ homes whose owners would, I agreed, happily become Yahoo users.

Steven replied decisively: “Inside the user’s house there would be a terminal that ran as a wireless IP phone (consumers already prefer wireless handsets); outside the home (but within range of a Yahoo modem) it would still operate as a wireless IP phone (with flat-rate voice and data), and outside the range of a Yahoo WiFi connection it would switch to a Yahoo preferred wireless carrier (Motorola has already demonstrated the hand-over technology).”

Which carrier, I queried? Surely not NTT’s mobile provider, the well-known and oft-mentioned NTT DoCoMo?

“How happy would KDDI or Vodafone be to get this contract?” said Steven. “Who would care how many megapixels the handset camera had, so long as the calling was ubiquitous and 100-percent flat rate?”

“Imagine that in one day, Softbank would achieve a national WiFi network which competitors did not discover until the day it was switched on, that customers installed at no cost to the company, was located in the most high-cost area to serve (residential), whose support and power was paid for by customers, and which would probably be the largest public VoIP network in the world.”

“Despite the inevitable NTT backlash,” Steven concluded, “think of all those ministry bureaucrats who would be able to say, ‘Japan created the world’s first and largest wireless IP phone network.’”

Imagine that.

— Daniel Scuka