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Meraki Gets Funding, Promises Affordable Network Access

Supporters say the company's mesh routers aren't so much a threat to ISP revenue as a way to bring in more customers.

Meraki Networks, makers of the $49 Meraki Mini wireless mesh router, today announced $5 million in funding from Sequoia Capital that may indirectly subsidize Internet access for those who can't afford it -- if ISPs allow it.

A wireless mesh router lets users share a high-speed an Internet connection among others with similar equipment in the vicinity. Given a sufficient density of mesh devices, a neighborhood, apartment building, or community could provide Internet access to about 20 to 30 people per paid Internet connection.

Companies like Cisco Systems, Firetide, Nortel, and Tropos make enterprise-grade mesh network products that enable municipal and corporate Wi-Fi networks.

Meraki is focused on consumers and community network providers. The company was founded by MIT doctoral students who wanted to make wireless Internet access more affordable worldwide. It is backed in part by Google. Its Meraki Mini mesh router is scheduled for release in the next few weeks.

"Enterprise networks are generally designed for extreme levels of control, where you can turn every single knob," says Sanjit Biswas, CEO of Meraki. "We really focus on plug and play."

NetEquality, a nonprofit group that aims to expand Internet access for low-income communities, has been trying out the technology in Portland, Ore.

"It dramatically reduces the cost of spreading a signal wirelessly," says Dave Cannard, a director of NetEquality. "We're very positive about it."

As Cannard sees it, mesh routers aren't so much a threat to ISP revenue as a way to bring in more customers. "In the market we're in, it's an opportunity to get into areas that [ISPs] would not get into otherwise," says Cannard. In low-income communities, spending $30 to $50 a month for broadband access isn't really an option. But at $1 per user per month, the price is right.

ISPs typically don't like sharing however. Many explicitly forbid such altruism in their Terms of Service agreements. Comcast, for example, does not allow customers to "resell the Service or otherwise make available to anyone outside the Premises the ability to use the Service (i.e. Wi-Fi, or other methods of networking). ..."

"With some ISPs, this is absolutely against their Terms of Service," says Cannard. "We specifically go out and seek ones that are friendly to the cause and they have service agreements that do not preclude sharing the signal."

NetEquality works with Stephouse Networks in Portland, which resells Covad bandwidth.

Affluent America appears to show more resistance to bandwidth sharing than elsewhere. "In the U.S., it's a bit more prevalent than in the rest of the world," says Biswas. "We've actually seen a lot of interest from ISPs abroad who are interested in going into new markets that they haven't been able to get into before because of cost reasons. ...They can go deploy a network for a few thousand dollars when it would have cost them tens or hundreds of thousands of dollars before."

Meraki plans to include administrative tools that allow network monetization. "It's still under active development, which is why we don't talk a lot about it," says Biswas. "But the basic idea is if we have someone who sets up a network, we want to provide them with different ways to monetize their investment." These might include billing, advertising, and sponsorship tools.

Whether or not mesh networks will change the economics of Internet connectivity in wealthier areas remains to be seen. In theory, rampant bandwidth sharing could reduce revenues for ISPs, but sharing can cost users in terms of connection speed. In circumstances where 50 to 75 apartments are sharing a single DSL connection, Cannard says performance can be affected. He notes that the usage patterns in low-income communities probably aren't as intensive as they might be elsewhere.

"You get beyond a certain modest income level," says Cannard, "and people are going to want their own DSL line and they're going to be able to afford it."

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