Thanks to Torsten for this one -- Techdirt picks up on an item at Wi-Fi Networking News which notes that Bay Area wireless ISP MetroFi has determined that a free, ad-supported model for hotspots works better than charging for access.

As Techdirt puts it, "When Wi-Fi was first becoming popular and all these businesses came out with plans to charge people monthly subscription rates or huge hourly rates and somehow expected to make money, a few people pointed out that the added expense of managing all of the billing and customer support probably outweighed all of the revenue from users. It would appear that one local Wi-Fi operator now agrees."

Wi-Fi Networking News breaks down the cost benefits as follows: "At roughly $20 per month for unlimited usage, a good percentage of that had to be devoted to the expensive tasks of billing and marketing. If MetroFi netted $2 per month per customer, that might be an optimistic rate. By that token, having ten times the users bringing in an average of 50 cents per month each in advertising should cover increased capital and recurring expenses while reducing staffing requirements."

Clickety Clack has a link to a sample of the ad banners that MetroFi will be using -- and points out that a lot of people -- like Yahoo! and Google -- will be keeping a very close eye on this experiment.

MetroFi's press releases regarding this announcement are here.