McDonald's to Supersize Use of Wi-Fi Connections

Will offer customers wireless services, tap Wayport net for cashless payments

McDonald's Corp. last week announced plans to install public-access Wi-Fi connections in 6,000 restaurants by mid-2005. But the fast food chain said its Wi-Fi services deal with Wayport Inc. goes far beyond providing wireless Internet access to customers.

McDonald's will also use the Wi-Fi network to deliver a wide range of digital content, including MP3 music files, and to support business applications such as its cashless payment system, said Jim Sappington, the company's vice president of U.S. IT.

Austin-based Wayport plans to install high-speed DSL connections in 3,000 McDonald's restaurants this year and another 3,000 by next June. Wayport CEO Dan Vucina said the cashless payment system, which supports credit card transactions at cash registers and drive-up windows, will be separated from the public-access network and operate on a virtual LAN in each store.

Cashless payments require a minimal amount of bandwidth, Vucina said. But Wayport will use internally developed software to ensure that credit card transactions get priority access to DSL circuits and that no single application hogs the network connections.

Bandwidth to Go

The so-called bandwidth-shaping software consists of about 700,000 lines of Linux code and runs on a Wayport-designed router/gateway that will be installed at each Wi-Fi hot spot, said Jim Keeler, Wayport's vice president of engineering. The hardware device will manage the wireless LANs as well as the Wi-Fi traffic to and from the DSL network connection, Keeler said.

McDonald's also plans to use the network to distribute employee training videos to restaurants, Wayport said.

The digital content McDonald's will deliver via the Wi-Fi setup includes MP3 files and digitized versions of newspapers and magazines. Wayport is letting users download publications such as USA Today and BusinessWeek in PDF files during tests of the Wi-Fi service at McDonald's in various metropolitan areas.

To reduce network bandwidth demands, Wayport plans to cache music files on the in-store router/gateways, which are equipped with 40GB hard drives. The Wi-Fi network could also be used to distribute movie trailers to customers as a tie-in to the movie-based meal promotions McDonald's runs, Vucina said.

Vince Howell, the owner of a McDonald's franchise in Las Vegas, N.M., said Wi-Fi could drive more traffic to his restaurant. Howell gets about 40% of his business from Interstate 25 travelers, and he thinks wireless capabilities would entice people with laptops that support Wi-Fi links to choose his restaurant instead of nearby fast food rivals.

Wayport will offer two-hour Wi-Fi sessions at a cost of $2.95 per hour, in addition to other pricing options, such as a $29.95-per-month unlimited service plan for its nationwide network, which is currently available in 700 hotels and six major airports. Pricing for the MP3 content hasn't been set.

Amy Cravens, an analyst at In-Stat MDR in Scottsdale, Ariz., said a fee-based Wi-Fi services like the one at McDonald's need to differentiate themselves from free services "either by the quality of the connection or applications."

Copyright © 2004 IDG Communications, Inc.

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