If the idea is to drag people off the street and sell them your product and then you charge to avoid having people stay longer. It seems counter productive. It seems that Wi-Fi venderos should offer a method for 30 (or so) minutes of free time when the client spends a given amount at the counter. This gets the people that need WI-FI to pick your location, buy your product and get out the door. Most user probably just need the quick refresh and back to work anyways. This would not restrict charging for those that need two hours.

Panera's strategy seems to be the right one. By providing free wifi, the restaurant becomes a destination for a significant number of diners/users. In my experience their polite request that users not "camp out" and occupy table space during busy periods (lunchtime) seems to work well with their loyal wifi-using customers. Qdoba is another restaurant chain that also provides free wifi. I'm not sure if it's corporate policy, but a Quiznos near my office also provides free wifi. So there is certainly a trend in the direction toward free wifi access as a means to draw new customers, and to increase loyalty and repeat business.

Two dynamics seem to be at work here. First, in the market space for public wifi, are the freebies eroding the opportunity for T-Mobile, Boingo and other businesses that generate revenue solely through wifi scarcity? Secondly, does free wifi provide a greater business benefit by helping franchises to sell more coffee, muffins and burritos than paid wifi does through generating incremental cash flow via a percentage of fees collected? As one might expect, upstarts like Panera and Qdoba, with less brand power and fewer locations than Starbucks or McDonald's see the former as the greater opportunity. However, if their free wifi strategy is adopted by the big players, do they lose their advantage?

One final consideration: the greatest mistake companies make is to underestimate the loyalty of their core customers and the little things that affect that loyalty. Even if wifi were free at a nearer Starbucks, Panera might have already won the local free wifi game, and will keep its customers as long as it sticks to its more customer-centric operations plan. In this respect, I'd expect to see more die-hard Panera fans than Starbucks loyalists.

Honestly, I would probably agree to go to McDonald's more often if they had free Wi-Fi. When the kids go for the playland, we typically spend over $20 on their food. My problem is that I'm stuck in this place with little or nothing to do while they play. So, I'm not all that interested in going if I can avoid it. I would even be happy with the system of a code on the receipt to gain access to the system.

I spend probably $1500-2000 a year at Panera or similar places due to the "free" wifi - I will not have lunch at a place that does not offer it... Quite frankly, it shocks me that all restaurants dont have wifi as a complimentary service... Nothing like turning away a loyal revenue stream...

I agree with the previous poster... I spend a lot of money at Panera because of the free wifi (plus their food is great!). If they charged for wifi, I would find somewhere else where it's free, or just stay at my home office for lunch. I like to get out for lunch, though, and Panera offers and option for great food, atmosphere, and free wifi so I can continue to work.

There is already a failed model for charging for WIFI.

In the 1940's when air-conditioning started appearing, many movie theaters and restaurants at first thought this would be another revenue stream and charged more if they had air-conditioning. That ended fairly quickly as air-conditioning became commonplace.

WIFI through the airwaves like radio and TV before it will inevitably be free for some level of service. Establishments that don't offer WIFI will lose business to those that offer it.

Can you imagine going into a sports bar and being asked to pay to watch the TV sets?

The MacDonald's locations in London all offer free Wi-Fi (one of the few places providing that service). As a result, I made a point to spend 30min in a MacDonald's every day of a recent trip, to send/receive email and catch up with my family. You can bet I bought something each time I was there, too.

Availability of free Wi-Fi is likewise an extremely important criteria with my company's lunch crowd. We've basically stopped going to a couple of places, simply because there are equivalent "clone" chains that provide a HotSpot. Other things being equal (and restaurants have always had trouble distinguishing their menus), Wi-Fi is a key discriminator.

I don't spend any money at Pantera because I don't go to Pantera, and no amount of free Wi-Fi will get me into Pantera because I don't go to Pantera.
That being said, I do go to McDonald's and if I have my laptop with me, I log on and I pay the $2.95.
So far it has not caused an Anyrism.

I would much prefer to spend the $2.95 or whatever on desert or something instead of WiFi.

As an earlier comment mentioned, I could see a purchase (above a certain reasonable amount) including a pass code on the receipt for about an hour or so of surfing. After that time, a "commercial" could be served asking politely that the user either move on or pay for additional Internet time.

I don't think an hour is unreasonably short for free Internet access included with a food purchase in most places like mentioned in the article. It is different if somebody wanted to operate an Internet Lounge where they invest in furniture and other resources used by people taking advantage of WiFi access.

It may be worthwhile for businesses to differentiate between "WiFi while dining" and "Internet Lounge" business models.

Depending on how greedy the cellular companies are with their cellular broadband might make a big difference in the success (depending on how you look at it) of the business models of Starbucks and McDonald's et. al . Even though there is an investment on the part of the cellular companies, the smaller the financial bite they put on their customers for cellular broadband the greater the uptake on their services will be. Some notebook computers come with cellular radios built in just like WiFi and Bluetooth.

Who knows; this may make WiFi access in public places a non-issue some years down the road.