Meraki is offering free Wi-Fi to San Francisco. Why?

There is no business model behind it, but mesh Wi-Fi company Meraki is offering free Wi-Fi access to San Francisco, one neighborhood at a time, as I discovered when I passed by the company's folksy demo table at my local farmers' market last month (see report from local newspaper). But Meraki is not in the business of just blasting money out the door, which it appears to be doing in San Francisco, and there is a method to this program.

Meraki's business is actually quite straightforward: it sells wide-area Wi-Fi network hardware, and provides the management consoles to go with it. If you want to give a building, a street, a town, or a city access to Wi-Fi, you buy some Meraki Wi-Fi boxes, plug a few of them in to broadband connections, and they configure themselves to wirelessly share the connection among each other and among users.

Unlike other creative Wi-Fi mesh companies Fon and Whisher, Meraki is not aiming to build a global free Wi-Fi network. Rather, it's simply a Wi-Fi hardware company. If you run a mall and want to provide Wi-Fi access to everyone in it, get Meraki equipment (or spend more for competing products from Cisco, Tropos, Skypilot, or Nortel). If you want to change the world by connecting existing broadband connections together into a giant mesh that anyone can use for free (and break ISP terms of service in the process), sign up for Fon.

That's not to say that Meraki isn't out to change the world. Its technology of relatively inexpensive Wi-Fi access points coupled with its hosted management console can make it cost-effective for a community to light up wireless access for everyone. It's like the OLPC of Wifi (and to be clear, OLPC devices have their own mesh Wi-Fi routers built in).

User access to Meraki services can be free or paid. Meraki has the software for both, and doesn't really care how its devices are configured, since it's basically a hardware company. The hardware costs $150 for an indoor repeater and $250 for an outdoor-hardened router. You can also set up an ad-supported Meraki network, and get a discount on hardware.

Meraki co-founder Sanjit Biswas told me that one hardwire connection can be distributed to about 10 repeaters, and that each repeater can handle about 10 users at a time. And, of course, Meraki networks can multiplex multiple broadband connections together and share all their bandwidth with all their users. Most users will get about 2 megabytes a second of throughput.

Which brings us back to San Francisco and the loss-leader network it's building here. San Francisco is Meraki's test kitchen. If you're in one of the covered neighborhoods, you can just hop on the network for free. If you can see the signal but want a stronger connection in your house, the company will send you a repeater you can set up in a window (thereby expanding the network's footprint). If you're in an expansion area for the San Francisco project but have no signal, you might be able to get Meraki to bolt an outdoor repeater on to your house; the company may connect it to a DSL connection that it installs and pays for (you'll only have access to the Meraki signal, though, not the raw DSL link). Coming soon will be solar-powered repeaters, which will make Meraki's build-out even easier.

Another thing Meraki is testing in San Francisco is how to work with municipalities. Meraki may just provide San Francisco the city-wide free Wi-Fi access that the mayor, Google, and EarthLink together couldn't maneuver into being. But this project is a one-off. Biswas says Meraki does not want to be the primary driver of a muni Wi-Fi project. Rather, the company will sell its technology to whatever agency or company wants to sponsor the installation. Arguing the politics of public versus private wide-area Wi-Fi is not what a hardware provider needs to do. It wins no matter which way the wind blows.