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SBJ/February 28 - March 6, 2011/Leagues and Governing Bodies
NBA studies AT&T proposal as part of wireless push
Published February 28, 2011, Page 1
The league is currently refining a proposal from AT&T in which the telecommunications giant would give its facility owners the option for the company to build in both Wi-Fi and mobile networks within their buildings.
The proposal with AT&T calls for the company to build the roughly $2 million Wi-Fi and mobile networks in arenas at no charge to facility owners. AT&T customers in those venues would automatically get access to the network while non-AT&T customers would have to register to get free in-arena access, giving the company the opportunity to gather valuable consumer data while attracting more subscribers. The proposal is not tied to an NBA leaguewide sponsorship or technology partnership deal and the option would be available only to NBA teams that own or control their arena operations. Other tenants such as NHL teams or other events in the NBA-controlled arenas would be included in the increase in wireless access.
In addition to the AT&T scenario, the NBA is presenting teams with the option to use a third party to build their overall wireless system, or to use current league partner Cisco to install entirely new digital platforms that would include wireless access. Each choice would remain voluntary to teams. There is no specific timetable on teams to boost their wireless capacity.
The move is part of the NBA’s effort to help teams meet exponentially surging demand for wireless access inside arenas, a thorny issue the entire sports industry is facing (see related roundtable discussion, page 16).
Mobile 3G and 4G networks from major carriers, as well as Internet Wi-Fi networks, are routinely clogged at most sports venues as consumer interest in mobile content continues to balloon beyond projections.
In addition to mobile and social media content, the fast-growing technology that will allow fans to buy concessions and merchandise through their smartphones is expected to further tax wireless networks. NBA data shows more than 70 percent of its fans attending games own smartphones.
“You could say the stars are aligned for us and we want to provide fans with access,” said Steve Hellmuth, NBA Entertainment executive vice president of operations and technology. “There is upside for our teams.”
Facility owners generally charge each wireless provider $2,000-$3,000 a month for in-arena access. Under AT&T’s new proposal, the company would build the networks using Cisco technology. Cisco is an NBA leaguewide technology marketing partner, renewing its deal as a non-exclusive technology partner last year. There is no specific AT&T branding in the building should a team choose that system, allowing teams to keep local wireless deals intact, Hellmuth said.
“We have reviewed AT&T’s proposal and we are refining it,” Hellmuth said. “We specifically want to understand how it works with our marketing partner in Cisco.”
Leagues generally have some base-level communications requirements for key functions such as game operations and security. But in-venue connectivity has largely been a market-by-market and team-by-team function, with building operators attempting a wide variety of temporary and more permanent efforts to try to keep up with demand.
“The importance for better wireless service in arena is critical to the future of our business,” said Alex Martins, president of the Orlando Magic, which used a third party to install a wireless system inside the new Amway Center. “With the proliferation of handheld devices, [fans] will be in need of excellent access.”
The NBA’s effort is rare as it attempts to offer a coordinated, league-level solution.
“I don’t know of anything quite like this,” said Bill Schlough, San Francisco Giants chief information officer, who along with AT&T has created one of the most technologically advanced sports facilities at AT&T Park. “The concept they’re after seems to make some sense.”
Cisco has developed technology that seeks to avoid wireless bottlenecks by targeting separate sections of arenas. AT&T’s proposal to the NBA is based heavily on that technology. Teams, however, will still not be obligated to use the AT&T option if they have a better one, but it’s too early to get an industrywide sense of how teams will respond.
“We are not saying to teams that one way is better than another,” Hellmuth said. “Our wireless systems in our arenas have been overrun and we are not able to service our customers the way we’d like. We want to improve it, and we want fans on smartphones in our arenas.”
The move comes with potential conflicts between wireless sponsors and embedded building systems that are slowing the dream of universal Wi-Fi across sports venues.
“It’s going to take time,’’ said Shervin Mirhashemi, COO for the Global Partnerships unit of AEG, during a panel discussion last week in New York, hosted by architecture/design firm Gensler. “It’s not cheap to retrofit. … Someone’s got to pay for it and you’ve got to be able to monetize it.’’
Woody Thompson, executive vice president at Octagon, which has clients including Sprint and wireless internet provider Clear, said any technology rollout holds both promise and fear for brands. “If you promote that you are Wi-Fi capable for all, the minute someone can’t get their Facebook page up and post pictures from the game, they are blaming the sponsor or the venue or both — and it can become a nightmare,’’ he said. “That is a real concern. Even if it doesn’t work for 15 minutes, people get very frustrated and the sponsor gets blamed.’’
Added MasterCard sponsorship chief Michael Robichaud, “There should be a way for teams and venues to monetize this on the back end.”
AT&T and Cisco officials could not be reached for comment.