Metricom has the most to gain from the alliance, analysts say. Despite the fact that Paul Allen's investment firm, Vulcan Ventures, took a controlling stake in the company in October, Metricom has struggled to gain mainstream acceptance of its wireless modem, Ricochet. (Paul Allen is an investor in CNET: The Computer Network.)
Metricom has made other alliances recently to increase distribution of its wireless data communications products. In October, the company struck a deal with AirTouch Paging to resell Ricochet in the San Francisco area.
Metricom's wireless service is only available in Seattle, the San Francisco Bay Area, and Washington, D.C. "One of the complaints about Ricochet is that it isn't nationwide," Alan Saldich, director of business development, said today.
When Ricochet users want to connect to the Net at 33.6 kbps outside those areas, they have to pay an extra $5 to $10 per month. Users incur long distance telephone charges when they connect from another city.
"People have only used it before if they are willing to spend $25 dollars extra a month to surf at Starbucks instead of their desk, but they still have to carry this brick-sized piece of equipment around, and they can only use it in [three] cities," said David Cooperstein, a Forrester Research analyst, who wrote a report last year on the market.
"The deal is great for Metricom because it gives them some national recognition, but they still can't deliver on it themselves," he added.
Under the partnership announced today, Ricochet users and Netcom customers who sign up for the NetComplete Advantage program will get both a regular Net access dial-up account and wireless access. So Ricochet users who also have a regular modem now can dial into Netcom's network when they are on the road to gain access to their email and the Web.
"It is a way to broaden our marketing channels. The wireless service still only works where we have markets constructed," Saldich added. "But almost all laptops today have built-in modems. This service can save [Ricochet users] money if they are busy travelers."
For Netcom, the extra feature may help it distinguish its national Net service from the growing competition. "Our agreement with Metricom gives us yet another avenue to extend Netcom's range of one-stop Internet solutions to our customers without having them tethered to a phone line," Mike Kallet, Netcom's senior vice president of products and services, said in a statement.
Amid technical limitations, the wireless Net access business has steadily pushed forward. For example, Hybrid Networks and Warp Drive Networks will launch high-speed wireless Net access by year's end, but it will only be available in Los Angeles, San Diego, San Francisco, and Portland, Oregon.
In August, chipmaker Intel said it will promote wireless services for business globe-trotters through a coalition of telephone, mobile phone, hardware, and software companies that will bundle their services to give PC users a simple wireless connection to the Net or corporate intranets.
Netcom and Metricom will likely benefit from increased exposure from today's announcement, but wireless Net access is still in its infancy, Cooperstein said.
"The service is a road sign for wireless data services' emergence from the depths," he added. "The mass market of wireless is still years away, but it's a step in the right direction."