Friends visiting Japan often ask me why there are no, or very few, Wi-Fi hotspots available at hotels and cafes in Tokyo. They mention that in their countries, many places offer free Wi-Fi for guests — often it is completely open, or you simply need to ask the staff for the password.

In Tokyo, even when you can find a Wi-Fi signal, you’ll more often than not be faced with the provider’s log-in page, usually completely in Japanese. “Isn’t Japan a country with advanced Internet?” ask my friends.

And their complaints are justified: There are fewer Wi-Fi access points in stores in Japan, and many of them require monthly subscriptions. Free Wi-Fi is very rare to find. It’s understandable why travelers are disappointed by the gap between the perception that Japan is a hi-tech country with a high Internet penetration and advanced mobile usage, and the reality.

In Japan, most demand for email and Web access outside the home has long been satisfied by mobile phone features such as NTT Docomo’s i-mode service, which began in 1999. Years before the age of the smartphone, on i-mode and its competitors, over 70 million users — the same amount as PC Web users —were enjoying Internet access through their phones (there were some limitations, but it was still the Internet). Flat-rate data plans (which only became common in the United States with the introduction of the iPhone in 2007), became available in Japan around 2004, and people began to do everything Net-related from their cellphones. For these users, there was no need for a network of free Wi-Fi at shops and cafes.

Instead, what people in urban areas of Japan wanted was to access the Web while they were on the train to work. People who spend 3 to 4 hours on their weekday commute boosted the cellphone-Web infrastructure. Making a simple Wi-Fi network within a cafe or store may be an easy task, but offering Wi-Fi to hundreds of thousands people on trains is not realistic. Cellphone access might not be as fast as Wi-Fi, but cellphones are capable of being connected on high-speed trains.

But what about tech-savvy Japanese who want to use their laptops everywhere? For them, third-generation (3G) cellphone network data services are available fairly cheaply.

In the West, people carry their laptops around assuming that there will be Wi-Fi on hand. In Japan, people in the same category tend to carry their own 3G data cards or a Wi-Fi router to which they can connect their laptop, smartphone, tablet, etc. They don’t need free Wi-Fi that much.

If a lot of customers were to start asking for Wi-Fi in cafes and elsewhere, then stores offering it would be able to differentiate themselves from stores that didn’t and attract more customers. However, if casual users are okay with accessing the Internet on their cellphones, and heavy users bring their own data cards, then the people who need free Wi-Fi are a rather small percentage. The cost-benefit performance for a store would be of little value, unless the store specifically targets foreign travelers.

The latest boom in the cellphone industry, however, are smartphones and tablets from overseas, such as the iPhone, which (compared to Japanese feature phones) are more like computers than phones. Their handling of heavy data, including images and videos, requires a lot more bandwidth, which makes them more deserving of Wi-Fi support. Smartphone/tablet users want Wi-Fi for a better Web experience, and carriers also want to provide it because the generous flat-rate plans they offer on their 3G networks are creaking under the strain of all that heavy data.

As a result, major carriers have now begun offering their own free or low-cost Wi-Fi hotspots, but of course they can not provide Wi-Fi at every single location where it may be needed. If free Wi-Fi spots proliferate it will be a major plus for smartphone/tablet users.

So it seems that after a decade of disfavor, the demand for free Wi-Fi is now at a historic high in Japan. Probably because of that, more companies are entering the free Wi-Fi provider business recently.

In December last year, an Internet service start-up called Connect Free launched a program that made it easy for shop owners to provide free Wi-Fi for their customers — one of Japan’s biggest printing companies, Dai Nippon Printing (DNP) later joined as an advertising partner. There was no cost to the stores, as the service is paid for by advertisements that appear when customers log on. Also in December, the 7-Eleven group began to offer free Wi-Fi at stores in Tokyo.

However, both services were promptly found to be violating privacy laws. Connect Free’s service collected private information including people’s Twitter and Facebook IDs, and 7-Eleven’s service blocked access to rival shopping services such as Amazon and Rakuten. Both did so without the user’s consent.

Each company responded to the charges by halting such behavior soon after their services launched. This month, the government publicly issued administrative directions against the companies. By doing it publicly, the government was effectively drawing attention to what kind of behavior is illegal, and perhaps preventing other companies from trying the same.

On April 6, another convenience chain-store, Lawson, also launched a free Wi-Fi service. However, Lawson too has had privacy and security issues — as if they had never heard about the legal problems faced by 7-Eleven and DNP/Connect Free. After they too were criticized, Lawson has announced that they will also fix their privacy problems — though at present the service is still running without the fix.

The problem is not only in Japan, however. Just this month, the New York Times reported that the Marriott Hotel tried to lurk and insert ads on their guests’ PCs via Wi-Fi.

This may just be something that companies feel they have the right to do: If they offer free Wi-Fi, then they have the right to expect something in exchange. But messing with a person’s privacy is always going to come up against protest — if it is discovered. If companies feel they need to cover the cost of Wi-Fi with advertising, and are not satisfied that it is attracting more customer visits, then they should probably not offer it as a free service — unless they are going to be completely open about their snooping.

Akky Akimoto writes for Asiajin.com, an English/Spanish blog on the Japanese Web scene. Japanese translation will be released on ja.asiajin.com. You can follow him @akky on Twitter.

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