Why we’re paying for Wi-Fi now, and what comes next

In the last five years, we’ve moved from home Wi-Fi being part of a residential broadband subscription to paying extra for managed Wi-Fi from our ISP or as part of an add-on provided by a retail router maker. As Wi-Fi’s importance has shifted, in other words, so has our willingness to pay for it.

Fahri Diner, the CEO of Plume, is one of the primary leaders behind this trend. Plume launched in 2016 with a vision of managed Wi-Fi and some cutely designed Plume Pods that could be plugged into a home to create a mesh network. Plume, which recently raised $270 million, was one of the companies, along with Eero and Google, that brought mesh Wi-Fi to the home.

Mesh Wi-Fi gained importance because consumers began adding more and more internet-connected devices to their homes, and asking more of them. Smart TVs hit the mainstream with over-the-top content providers such as Netflix and Hulu, and people spending hours watching shows wanted to eliminate the blips they’d begun to notice in their internet connections.

They also wanted to bring coverage to more places in their homes. In 2015, I purchased a Tesla, which used a Wi-Fi connection to download software updates. That meant I needed Wi-Fi in my garage. Other people wanted to put connected speakers by their pools, or to place smart home cameras elsewhere outdoors. Mesh Wi-Fi, borrowing from the enterprise Wi-Fi world, arose to meet the needs of the new, WiFi-intensive home.

But while mesh Wi-Fi was fine, managed Wi-Fi was better. And in order to do managed Wi-Fi well, you need a cloud connection. Cloud connections, of course, cost money. So the idea of managed Wi-Fi plus additional services was born. Eero launched its routers with a security-oriented service for a small monthly fee, while Plume focused on ISPs and signed a big deal with Comcast.

Some had already tried charging a fee for Wi-Fi. But this was back in the early days of ISPs, when a consumer who wanted a Wi-Fi network had to go to Best Buy and pick up a Linksys router and set it up themselves. When ISPs tried to charge those customers for attaching a device to their network, they rebelled and the fees disappeared.

Fast-forward to 2021, when more than two-thirds of Comcast’s customers pay $14 a month for what Comcast calls an xFi gateway, a fancy Wi-Fi router plus a set of software that provides parental controls, security, and yes, managed Wi-Fi. And if you so choose, Comcast will sell you additional devices running Plume’s software to extend your coverage and bring Wi-Fi management to more of your home.

Plume now has deals with 150 ISPs worldwide. Eero, which is owned by Amazon, also sells to ISPs, and provides two subscription plans that customers can tack onto their existing routers to add additional services. Nick Weaver, CEO of Eero, says the company decides which features to charge for based on how much cloud computing the service requires. Because, yes, cloud computing costs money.

I find the story of paid Wi-Fi useful because I think that in order to build a sustainable business, connected devices need to focus on delivering a service as opposed to a device. No, not everyone pays extra for Wi-Fi today, but many of us do. The next big questions should be: What’s worth paying for? And what should a consumer expect in a modern mesh Wi-Fi system?

At the free tier, I would expect an app and/or web service that lets me manage my network. Such an app or service would show me what devices are on my network and allow me to check speeds and do any necessary troubleshooting. It’s also where I’d be able to create and share a guest network. Guest networks are an essential element for any home Wi-Fi network because visitors to your home expect Wi-Fi access as part of most visits. I personally don’t hand out a guest network credential at a dinner party, but overnight guests get one automatically, and my daughter’s school friends are rarely at the house for more than 15 minutes before asking for Wi-Fi access.

I’d like to see parental controls at the free level, but some services — such as Comcast — make them part of their paid service. Parental controls let you group devices based on household members and limit their access after certain times; they also let you apply rules to those devices around access to certain sites. Other services that should exist at the free level include device prioritization options. My current Wi-Fi gear, which is provided by Calix (a former sponsor), and gear by Plume, allows users to set specific devices up for prioritization, so my work calls can take priority over my kid’s YouTube. (Eero’s Weaver thinks that the underlying network management should work to provide the best Wi-Fi to all devices so such prioritization becomes unnecessary.)

When it comes to additional services, proactive security feels like something people can and will pay for. This could include anti-virus for computers but should focus more on analyzing network traffic for odd or malicious behavior and either alerting the network operator to the anomaly or quarantining the device. Given the number of calls I field about network security, I firmly believe people would pay for this sort of service. I have.

In addition to security, people might pay extra for network-wide ad blocking.

Some parents want the ability to block certain sites or to monitor their kids’ browsing. However, I have concerns about those sorts of features as they seem like they’d be dangerous if they were deployed against adults. I can easily see an abusive spouse monitoring their partner’s web surfing as a means to control them, for example.

Those are all features offered today. But in the next few years we’re going to see additional services delivered over Wi-Fi. Plume’s Diner says the company is looking at services that use radar so as to gain a better understanding of where people are in the home and what they are doing. Other companies are planning to use radar for health services and monitoring the elderly. Diner didn’t specify his company’s plans here, but did say Plume will include radar in future products. And people will certainly pay for those features as they get added to routers and home networks.

So get used to paying for Wi-Fi, and then get ready for more radios to join the home networking world.