Subject: [NEXTEL-1] Wi-Fi spreading Internet access to the masses

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Monday, December 09, 2002, 12:00 a.m. Pacific

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Wi-Fi spreading Internet access to the masses

By Nancy Gohring

Special to The Seattle Times

Technology historians could look back at 2002 as the year a geeky wireless technology outgrew its grass roots and created a burst of excitement in the beaten-down telecommunications business. So much so that the technology, called Wi-Fi, had drawn the committed interest of industry giants by the end of the year.

Last week, IBM, AT&T and Intel said they were planning to set up Wi-Fi "access points" — locations offering a wireless, high-speed networked gateway to the Internet — in 50 of the country's largest markets. The venture, called Cometa Networks, is the latest of many developments that have marked Wi-Fi's breakout year, transforming it from a below-the-radar, vaguely underground phenomenon to a service that's in shouting distance of a large part of the nation's population.

As with many technologies, Wi-Fi's roots rest with tech hobbyists and trailblazers, who realized it can let anyone with the right gear get on the Internet without charge. Wi-Fi, also known as WLAN or 801.11 technology, enables laptop-computer users to wirelessly access the Internet within a couple-hundred-feet radius of an antenna hooked to a wireline Internet connection.

Unlike the wireless technology used for cellphones, Wi-Fi uses unlicensed air space, which lowers costs significantly.

But this relatively inexpensive way of creating a network didn't remain in the domain of the geeks for long. This year, it caught the attention of established corporations such as wireless operator T-Mobile, which offers Wi-Fi in Starbucks coffee shops for a charge.

Inevitably, some push and pull between the hobbyist creators and the corporations surfaced, and T-Mobile, for example, butted heads with some community Wi-Fi users. Also, this year some broadband service providers expressed their dismay that, through Wi-Fi setups, many nonsubscribers were piggybacking on subscriber connections to hop on to the Internet.

Such tensions are the growing pains of a developing segment expected to boom over the next few years. By 2007, the Yankee Group projects, there will be 5.37 million users of public Wi-Fi "hot spots" — individual access points — in North America, up from 30,000 this year. That doesn't count the millions that would use networks in corporate locations or in homes.

The story of Wi-Fi's development in 2002 is one of setback and progress, struggle and victory. In addition to some confrontations between geeks and corporations, the year saw new product and security breakthroughs designed to build a stable platform for future growth.

Here are some of the most notable events of the year that may enter the history books as instrumental developments in shaping the future of Wi-Fi.

Wi-Fi banned

Early in the year, the Lawrence Livermore National Laboratory in Northern California banned the use of Wi-Fi, citing security concerns. A few months later, the retailer Best Buy stopped using a type of cash register that employs the Wi-Fi standard after learning a hacker may have stolen credit-card numbers over the wireless link.

These high-profile security alarms, though more important to corporate users of Wi-Fi than to the public market, are a setback to the budding industry and highlight the need for a more secure solution.

Since then, in October, the industry's Wi-Fi Alliance introduced a new security standard, Wi-Fi Protected Access. Industry observers have high hopes the standard may alleviate the security concerns.

New standard released

The most commonly used Wi-Fi gear is actually based on an IEEE (Institute of Electrical and Electronic Engineers) standard called 802.11b. A new breed of Wi-Fi equipment based on another, higher speed standard, 802.11a, became widely available early in the year. Product availability didn't excite the market, though.

"We seem to be reaching an industry consensus that 802.11a is an interesting technology, but it's subject to a range of issues," notes Navin Sabharwal, director of residential and network technologies with Allied Business Intelligence, a research company. The most notable issue is that 802.11a isn't compatible with 802.11b.

Enthusiasts may be waiting for products based on the next version of Wi-Fi, 802.11g, which should hit the market next year. That gear will offer higher speeds and be backward-compatible with 802.11b.

Boingo launches

Boingo Wireless, a Santa Monica, Calif., company created by EarthLink founder Sky Dayton, introduced a service that aims to unite the many disparate and small commercial Wi-Fi services.

Customers can use a single interface and receive a single bill for using 850 currently live hot spots around the country run by companies that are partners with Boingo. With the backing of Dayton and Sprint PCS, Boingo lent some legitimacy to the industry, which had been peopled by entrepreneurs and small startups.

Companies such as GRIC and iPass, which offer wireline Internet connections to those traveling on business, have added Wi-Fi hot spots in airports and hotels to their offerings.

Warchalking makes a mark

In early summer, Matt Jones, a designer with the BBC in London, came up with the concept for warchalking, and word of it quickly spread around the world. His plan was for Wi-Fi enthusiasts to develop a set of symbols to chalk on sidewalks or walls, indicating where others can find and use Wi-Fi networks. Warchalking plays on an old hobo practice of marking friendly houses or places to find work.

In an example of the corporate world running with an underground idea, Schlotzsky's Deli is warchalking on the sidewalks in front of restaurants where it offers Wi-Fi free to customers (none in the Seattle area, however). Only 10 shops are hooked up so far, but the company expects to roll it out in all 40 company-owned stores, with plans to have more than 600 franchise stores follow suit.

ISPs, communities clash

In July, Time Warner Cable sent letters to some cable-modem customers in New York City who use Wi-Fi, warning them that sharing Internet access with those who don't subscribe to Time Warner's service didn't comply with the cable system's terms of use.

The move provoked discussions among a class of enthusiasts who were planning "community Wi-Fi" initiatives in which groups of people — in, say, a neighborhood — would be connected to networks. Some feared that other broadband providers could follow suit and put an end to their community-sharing plans.

The furor died as it became apparent that some broadband providers are happy to let customers share their service with nonpaying users.

"People learned over the year that there is an acceptable-use policy and you should read it," said Matt Westervelt, a founder of Seattle Wireless, one of the first community wireless networks.

In November, Seattle-based Speakeasy, an Internet service provider, said it will give away the hardware for a Wi-Fi access point to those who signed up for Speakeasy's DSL or other high-speed Internet service. Seattle Wireless is also in initial talks with Cortland Communications, a local ISP and wireless proponent, to share some network components between the two networks.

T-Mobile static

In the U.S., T-Mobile officially launched its hot-spot service in 1,200 Starbucks coffee shops in August, with plans for 2,000 by year end. In October, T-Mobile announced a similar deal with Borders Books and Music, planning for 400 bookstores to be hooked up in the first quarter of 2003.

But T-Mobile, formerly Bellevue-based VoiceStream Wireless, didn't enter the market quietly. Shortly after the Starbucks launch, Personal Telco, a community Wi-Fi project in Portland, and a shop in San Francisco reported interference problems from new T-Mobile hot spots in nearby Starbucks. The incidents pointed to the potential for turf battles between Wi-Fi operators because they must share wireless spectrum, or airwaves. In both cases the parties worked out how to share the space without interfering with each other.

Casualties averted

For such a tough year economically, especially in the technology sector, there were surprisingly few casualties among Wi-Fi companies. But the entrance this year of giants into the Wi-Fi market is expected to change that. "That will probably precipitate a market shakeup," said Allied Business Intelligence's Sabharwal. He expects giants such as Intel to dominate the market, forcing the startup chipmakers out.

One notable casualty is hereUare Communications, a company that developed billing solutions for hot-spot operators.

Its mainstay had been MobileStar, the company bought by T-Mobile to service Starbucks stores. But T-Mobile didn't continue the relationship and hereUare couldn't make it without that anchor customer.

Next year may not be so kind to startups. "Everybody knows this market is saturated and there will be a shakeout," said Sabharwal. He expects to see more consolidation in 2003.

Nancy Gohring is a Seattle-area free-lance writer who writes frequently on telecommunications and wireless technologies.

Copyright © 2002 The Seattle Times Company