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In search of hotspots

Thanks to ISP involvement, Wi-Fi Internet is on the horizon.

In Wi-Fi World, wires are for plugging in toasters and Grandma’s phone, not computing devices. Anyone anywhere can tap into the Internet or corporate networks, riding the airwaves to the nearest access point. Downloading mega e-mail attachments at the departure gate; “sniffing” for discounts at the mall; watching streamed video at the corner java joint, by the pool, or in the park-all are commonplace in a world in which broadband connectivity ranges free, unfettered by copper or coaxial cable.

Through a harmonic convergence of radio and the Internet, the Web has sprouted legs; it tags along with you, out the door and down the street. That world exists somewhere in the near future, tantalizingly close but still out of reach.

Today’s Wi-Fi “hotspot” market, spawned by the surging popularity of wireless LAN (WLAN) technology that creates a zone of high-speed connectivity around an antenna hooked into the Internet, is fragmented and immature. Places where 802.11b-savvy laptops or PDAs can lock onto a signal remain scattered and elusive, concentrated mostly in big-city airports, hotels, and coffee shops. As in the early days of cellular, dozens of wireless providers–each with its own sniffing software, log-on procedures and billing methods–vie for the dollars of early adopters. Data security is shaky at best.

But the framework for Wi-Fi World, a nationwide hotspot network that would be as ubiquitous as today’s cellular infrastructure, is beginning to take form. Cellular carriers, wireless ISPs (WISPs), and hardware and software manufacturers have invested billions of dollars in the notion of a far-flung, invisible data matrix that empowers the mobile worker and fosters genuine m-commerce. The hotspot phenomenon has already rendered alternative wireless broadband technologies such as Ricochet and Bluetooth largely irrelevant, and is redefining the role of 3G, the long-awaited next generation of cellular phones.

“The year 2002 will be remembered as the year that Wi-Fi hit the roadmap, that people started to understand what the technology is, what the benefits are,” says Christian Gunning, director of product management for Boingo Wireless, a hotspot network aggregator. “This year will be probably known as the year that the network was built.”

Excuse my footprint….

The winner in the race to build a national Wi-Fi network will be the entity that controls the largest number of strategically situated hotpots. “Footprint is the name of the game,” says Dick Snyder, senior vice president of business development for Springfield, Mass.-based Concourse Communications, a WLAN developer. “Anything that can be done to grow the footprint, we’re all interested in doing that.”

The problem with Wi-Fi is its limited range; radio signals transmitted from a wired base station peter out beyond 300 feet. Boingo of Santa Monica, Calif., connects the scattered dots on the hotspot map by forging wholesale access agreements with other Wi-Fi providers such as Wayport, Airpath Wireless, NetNearU, and Pronto Networks. Free client software searches for public hotspots and identifies the searcher as a Boingo subscriber ($50 per month for unlimited access), creating the illusion of one seamless network.

“It’s a challenge for users to get connected in a Wi-Fi world that is increasingly fragmented,” Gunning says. “Our vision is to enable customers to access all Wi-Fi networks as they travel across the country with a consistent experience, through a single authentication and billing relationship.” The two-year-old company claims about 1,000 hotspots in its portfolio, furnished by 19 network partners, and Gunning says negotiations are under way with another 25 providers representing 50,000 potential hotspots across the continent.

The grunt work of installing Wi-Fi base stations in airports, hotels, cafes, and other venues falls to small, grassroots companies such as Wayport and Concourse. Austin, Texas-based Wayport has managed to establish a wireless presence in five major airports and more than 450 hotels nationwide by sharing subscriber revenue with airport commissions and hoteliers. Its network constitutes about 70 percent of Boingo’s footprint. Concourse focuses on airports, splitting user fees with iPass, a Redwood Shores, Calif.-based remote connectivity vendor that provides the underlying authentication and billing platform. A Concourse-built Wi-Fi net has been up and running at Minneapolis-St. Paul International Airport since last summer.

Other independent WLAN vendors include Joltage of New York City, which recruits location owners to become “micro-ISPs,” operating their own revenue-earning hotspots with the aid of free customer registration and billing software; and Surf and Sip in San Francisco, a WISP that serves up Wi-Fi in cafes, wine bars, and other high-traffic venues, most of them located in California, Colorado, and Florida.

Out of my way, Wi-Fry

A sure sign that a technology has achieved critical mass is market entry by the heavyweights–Fortune 1000 corporations with the capital, marketing moxie, and connections to elbow their way into the consciousness of the everyday user. In the last six months, frustrated by delays in 3G adoption and intrigued by the money-making potential of hotspot networks, national cellular carriers have staked their claim to 802.11 territory.

T-Mobile USA boasts the largest WLAN network in the country, with hotspot service in 2,000 Starbucks and hookups planned this spring in 400 Borders bookstores. The company also has a deal with American, Delta, and United Airlines to install Wi-Fi in roughly 100 airport clubs and lounges. AT&T Wireless customers can sign up for GoPort, a Wi-Fi service that rides on Wayport’s footprint through a roaming agreement. Sprint PCS, an early investor in Boingo, and Verizon Wireless are also pursuing hotspot initiatives.

The proverbial 800-pound gorilla in Wi-Fi is Cometa Networks, the company formed by Intel, IBM, and AT&T last December to build the 21st-century equivalent of the transcontinental railroad–a national hotspot network comprising more than 20,000 access points. Cometa plans to wholesale Wi-Fi service to cellular carriers, Baby Bells, ISPs, and cable operators, setting up hotspots in prime locations in the top 50 U.S. cities. Deployment will begin this summer, CEO Lawrence Brilliant says, with hotspots peppered throughout 10 cities by the end of the year. “What we’re installing are remote offices as work productivity enhancements,” he says. “We’re going to make the quick-service restaurant into a remote office, we’re going to make hotel lobbies and bookstores and gas stations into remote offices.”

Everybody else in the hotspot market wants to cozy up to the big guy; Gunning says that Boingo is “in active discussions” with Cometa about incorporating its hotspots into Boingo’s network.

All this hotspot activity coincides with heavy investment in Wi-Fi technology by IT behemoths such as Microsoft (WLAN sniffing and security in Windows XP), Intel (the Centrino wireless PC platform), IBM, and Dell (notebooks with built-in Wi-Fi capability). Industry analysts believe that new Wi-Fi business tools and toys can only accelerate development of hotspot networks. In-Stat/MDR, a high-tech market research firm in Scottsdale, Ariz., estimates that 31,000 public hotspots–up from a mere 3,700 at the end of last year–will burn in North America by the end of 2006.

If they build it, will we pay?

The actual extent of the Wi-Fi ubernet three or four years from now will depend on several factors, not the least of which is how readily users will embrace the technology. Wi-Fi providers insist that America’s 40 million m-workers, hungry for really fast (up to 11Mbps for 802.11b) access to the Internet and e-mail, will flock to hotspots once they have Wi-Fi cards installed in their PowerBooks, Latitudes, and Pocket PCs. Consumers will surely follow.

But In-Stat senior analyst Allen Nogee wonders how many people will shell out upwards of $30 per month for Wi-Fi Internet access, given the wide availability of wired broadband at work and at home. He notes that this year’s rollout of 3G (third-generation) cellular, offering Internet connectivity at dial-up speeds, has been less than a smashing success; Sprint has slashed the price of its under-subscribed PCS Vision data service, and late last year AT&T Wireless scaled back its scheduled 2004 rollout of wideband CDMA service from 15 cities to four.

Nogee asks, “The big question is, do people want any of this? Are they willing to pay for 3G? Yes, they like Wi-Fi when it’s free, but are they willing to pay for it?” Apparently not at Starbucks; the Seattle-based chain admitted late last year that on average, fewer than two customers per day log on to T-Mobile’s HotSpot service.

More people would probably tune into hotspots if the process wasn’t such a hassle. A lack of back-end interoperability among networks hamstrings travelers today, making Wi-Fi surfing cumbersome and expensive. For example, Boingo subscribers can roam to hotspots installed and maintained by Wayport, but Wayport’s monthly and pay-by-the-day customers can’t connect to Airpath, Pronto, and other networks within the Boingo empire.

At Minneapolis-St. Paul Airport, users must reconfigure their laptops to log on, and incur a $7.95 daily charge on their credit cards because iPass doesn’t yet have access agreements with WISPs. T-Mobile deliberately keeps other hotspot networks at arm’s length, forbidding roaming onto its expanding footprint.

Boingo-type network aggregation is a start, but for hotspot networks to blossom, inter-carrier agreements must be forged, as they were in the cellular market, to permit standard log-on procedures, common billing, and multilateral roaming from coast to coast. “One of the benefits you’ll see from Cometa is that they’ll essentially enforce interoperability techniques,” says Craig Mathias, a principal with Farpoint Group, a mobile computing consulting firm in Ashland, Mass. “You’ll have a single account that will work on everybody’s network.” Wayport’s two-month-old partnership with AT&T Wireless, in which GoPort users gain access to the entire Wayport network, may be the first of a series of roaming pacts among hotspot operators and national wireless carriers.

A support role for 3G

Wi-Fi’s distance limitations, and the fact that it doesn’t work in a moving vehicle, means that hotspots will probably work hand in hand with 3G networks to bring wireless broadband to the masses. In-Stat’s Nogee foresees high-bandwidth Wi-Fi reigning in dense urban cores and at major facilities such as airports and business hotels, while 3G ferries low-bandwidth voice and data on the Interstate and in exurban and rural areas where hotspot coverage thins out. Wireless companies are already trying to meld the two technologies: Qualcomm makes chipsets that would support dual handsets receptive to both 802.11 and 3G signals, and both Boingo and Concourse say they’re interested in integrating 3G into their hotspot networks, letting users switch back and forth depending on their location and bandwidth requirements.

Analysts don’t expect other current wireless technologies to compete with Wi-Fi/3G. Resurrected from bankruptcy by Aerie Networks of Denver, Ricochet doesn’t have the geographic reach (it’s available in Denver and San Diego) or the speed (about 176Kbps) to satisfy business travelers. And Bluetooth has devolved into a short-range, niche solution for wirelessly connecting cell phone headsets.

Don’t tread on my spectrum

Other barriers to Wi-Fi hegemony can probably be overcome by tweaking standards, and fostering cooperation among providers. “There are no showstoppers,” Mathias says. “The only real potential problem is interference and lack of additional spectrum over time.”

Because Wi-Fi airspace is unlicensed, adjacent hotspots “step” on each other’s zones, diminishing the range of both networks and confusing sniffers searching for a signal to latch onto. T-Mobile had to quickly reconfigure its Starbucks access points when hotspot operators in San Francisco and Portland complained about interference, and competing networks have clashed at Dallas-Fort Worth Airport. One solution may be multi-provider access points, just coming onto the market, that allocate bandwidth to neighboring hotspot networks. To head off inevitable congestion in the narrow 2.4 GHz band (also occupied by cordless phones and microwave ovens), the Federal Communications Commission has begun to consider permitting Wi-Fi to expand into unused frequencies below 900MHz and in the 3GHz spectrum.

“Wi-Fi security” has been an oxymoron from the start; anyone with a properly equipped laptop can pluck confidential memos and spreadsheets out of the air. A new security standard, Wi-Fi Protected Access (WPA) is supposed to plug the leaks until a more robust solution, 802.11i, becomes available at the end of this year. Business users would be wise to avail themselves of the VPN features offered by Wi-Fi providers such as Boingo and Wayport.

Do you hotspot?

By summer hotspot should be a word overheard regularly on elevators and at airport ticket counters. Wi-Fi subscriber networks will have entered the wireless mainstream, with rapidly spreading footprints in major cities such as New York, Chicago, San Francisco, and Dallas. Increasing numbers of SOHO entrepreneurs as well as hardened road warriors will tap into hotspot networks, and they’ll roam with relative ease through their existing ISP, cellular, or cable account. Wi-Fi devices will be fluent not only in 3G but in several WLAN dialects, including 802.11a and 802.11g, emerging standards that offer much higher speeds–up to a theoretical maximum of 54Mbps–than 802.11b.

In the years ahead, Wi-Fi World–projected by the Yankee Group to blossom into a $1.63 billion industry with 5.4 million users by 2007–is likely to be ruled by mega-brands such as T-Mobile and AT&T Wireless in league with Cometa and other national wholesalers.

Nogee of InStat sees independents like Boingo, Wayport, and Joltage (the latter of which recently shut down) being shoved aside or acquired by bigger, well-capitalized competitors as the hotspot market matures: “I think the cellular service providers are ultimately going to be in charge of all of it.”

Will mesh networks weave new Webs?

First there was the Web, which brought order out of chaos on the Internet. Then there was “The Matrix,” which explored virtual reality and revitalized black leather as a fashion statement. Now there’s the Mesh, which may represent the next stage in the evolution of Wi-Fi hotspot networks.

In a mesh network, users themselves fill in the cold voids between hot zones. Each Wi-Fi laptop, PDA, or phone acts like a relay point as well as a receiver, passing along IP packets until they reach a base station connected to the Internet. Originally developed by the military to facilitate communication on the battlefield, meshes have the potential to greatly extend the range of hotspots, and lower deployment costs by reducing the number of high-speed wired connections needed in a Wi-Fi network. Like the Internet itself, mesh networks are self-forming and self-healing, capable of rerouting around bottlenecks by recruiting whatever devices are available in a given area.

But don’t look for mesh offerings from your wireless ISP anytime soon; commercial mesh networks are still in an early stage of development at wireless tech companies such as Nokia, MeshNetworks, CoWave Networks, and Skypilot Network.

MeshNetworks of Maitland, Fla., is one of the better-known mesh firms, with more than $27 million in capital from 3Com Corp. and other investors, and actual products based on an “enhanced” form of Wi-Fi. In field trials, the firm’s MeshLAN Multi-Hopping system has transmitted a wireless signal over five miles at speeds up to 6Mbps, hopscotching from one mesh-enabled device to the next.

A number of wireless systems manufacturers have bought MeshLAN hardware and software to integrate into their own products. But long-term, MeshNetworks wants to sell indirectly to enterprises and hotspot operators through licensing agreements with major wireless manufacturers. “It’s in our interest to get as many people as possible using the mesh, and in order to make that happen we believe that we will probably have to license it to big companies like Cisco or Motorola,” says Peter Stanforth, MeshNetworks’ CTO.

Significant technical hurdles must be cleared before the Mesh Age dawns. An obvious prerequisite for a mesh network is a critical mass of Wi-Fi devices in a given area, all activated and with mesh drivers installed. But who’s going to bother carrying a mesh device without a functioning network to connect to? The peer-to-peer nature of mesh also raises power management, security, and network routing issues: Users may object to strangers parasitically sucking their precious battery power; rock-solid encryption is vital for data flowing through somebody else’s jacket pocket; and nobody knows how mesh nets will bear up under large volumes of data traffic. “I think mesh is an important technology,” says Craig Mathias of the Farpoint Group, a mobile computing consulting firm in Ashland, Mass. “But [mesh developers] have a long way to go; it’s not a slam dunk.”

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