As wireless operators around the world struggle with the transition to “third-generation” (3G) cellular networks, another wireless technology is taking off on its own. Wi-Fi, also known as 802.11b, uses unlicensed radio spectrum to enable computers within a few metres of a small base-station to share an Internet connection. Unlike 3G, Wi-Fi is cheap, fast and works today. Base-stations are popping up in homes, offices, airports and cafés, and Wi-Fi capability is fast becoming a standard feature of laptops. In America, the technology has inspired a mania unseen since the early days of the Internet boom.
Attempts to build large-scale Wi-Fi networks so far have fallen into two camps: top-down networks, built in the traditional way by network operators who then charge fees for access, and bottom-up networks, built by loose federations of enthusiasts who offer free access to all.
Neither approach is ideal, however. The problem with top-down networks is that users will pay only to use a network with good coverage, and the market is highly fragmented. Different airports and hotels are served by different operators. No single operator provides wide coverage, so Wi-Fi fans need multiple accounts and passwords to stay connected.
The bottom-up approach has problems too. Enthusiasts are building free networks in cities around the world. Stick a Wi-Fi antenna on your roof, enter your location as a “hotspot” in an online Wi-Fi directory, and passers-by can use your Internet connection. At PC Forum, a recent industry conference, Cory Doctorow, a Wi-Fi enthusiast who lives near Silicon Valley’s Highway 101, reported a regular stream of cars pulling up outside his house as itinerant workers stop to check their e-mail. But this co-operative approach tends to break down when a technology goes mainstream. Make a free network available to everyone, and some people will abuse it to hog bandwidth or send junk e-mail.
If neither top-down nor bottom-up is the right approach, then what is? Boingo Wireless, a Wi-Fi start-up, hopes to get the market moving by acting as an aggregator. Its log-on and authentication software provides a wrapper around existing operators’ networks, so that users can access all of them using a single account; subscription revenue is split with network operators. So far, Boingo’s aggregated network covers ten airports, 400 hotels and 100 cafés in the United States.
This is clever, but the approach taken by Joltage, another Wi-Fi start-up, is cleverer still. Its aim is to increase the number of Wi-Fi hotspots by providing a commercial incentive for people to set up new ones. Joltage’s free software turns any Internet-connected PC with a Wi-Fi capability into a hotspot on the Joltage network. Subscribers can use any Joltage hotspot, and their subscription fees are shared with the owners of the hotspots they use. This provides an easy way for a café, hotel, airport or railway station to set up as a commercial Wi-Fi operator—provided Joltage can achieve critical mass.
Sputnik, another Wi-Fi firm, has also produced free software that turns PCs into Wi-Fi hotspots. But Sputnik’s approach is closer to that of the free Wi-Fi enthusiasts than Joltage’s. Anyone who sets up a Sputnik hotspot gets free use of the entire Sputnik network; no money changes hands. The company plans to make money by charging for a high-security corporate version of its software.
So is the stage set for a repeat of the boom in fixed-line Internet access? Not quite. One problem is that Wi-Fi networks rely on existing high-speed fixed connections to the Internet. Wi-Fi’s future thus depends on cheap, ubiquitous broadband, which has yet to materialise. Furthermore, sharing a connection is frowned upon by broadband-service providers, though some providers are thinking of introducing pricing plans that explicitly allow connection-sharing over Wi-Fi. Another problem is that commercial use of unlicensed spectrum is prohibited in some countries.
Although zealots like to think Wi-Fi will kill 3G, it seems more likely that Wi-Fi and cellular networks will work together. Forthcoming plug-in cards for laptops can use Wi-Fi if it is available, and fall back to a slower cellular connection if not. MobileStar, a Wi-Fi operator, was recently taken over by VoiceStream, a cellular operator, which plans to offer just such an integrated service. Evidently Wi-Fi, like the Internet before it, has begun to change from a hobbyist’s toy into a grown-up industry.