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New technology could put chill on hotspots: Emerging wireless access cards let users tap into the Internet anywhere they can receive cellular signals

July 10, 2006

The "hot spots" that drive wirelessfidelity access-better known as WiFi-might be in for a cool-down.

WiFi enables Internet users to log on without a wire connection, as long as they are in a hot-spot area. The sites have become so common that the number worldwide surpassed the 100,000 mark earlier this year, according to JiWire, a Web-based hotspot information provider.

Thousands of businesses, universities and municipalities have invested in the technology.

But wireless phone companies are challenging the technology with offerings of their own that make hot spots unnecessary.

It's too early to tell whether the new technology will do to WiFi what broadband did to dial-up. But one thing is certain: The nation's major wireless carriers are investing billions of dollars in the service marketed mainly toward business travelers.

"While WiFi is a good technology, it's limited in its breadth of coverage," said Ritch Blasi, spokesman for Cingular Wireless. "What we do is, we make an entire city a metropolitan hot spot."

Indeed, whereas WiFi may have a maxi- mum range of about 150 feet, what is known as third-generation technology covers up to 40 miles from a cellular tower. Users must buy laptop computer cards that function like WiFi cards, but they don't need to find a hot spot. Instead, the card communicates with the cellular network just like a phone.

When the user travels beyond the area where third-generation service is available, the card kicks down to a lower speed supported by the second-generation system.

Higher costs

Wireless carriers are courting consumers by offering unlimited broadband access for about $60 a month, plus about $50 for an access card following a rebate. But they still have a long way to go before they put a dent in WiFi usage.

WiFi aficionados typically pay $20 a month for unlimited access from vendors such as Boingo, as long as they're in one of the vendor's hot spots.

Nationwide, companies such as Starbucks, Borders and McDonald's have embraced WiFi. Although some businesses charge users, most offer WiFi for free, hoping to increase foot traffic.

In some instances, the investment may only be as little as $75 for a WiFi router and the $100 monthly charge to the business owner for the Internet connection.

Seoul tops the list of WiFi-friendly cities, followed by Tokyo and London, according to JiWire. The domestic leaders are San Francisco, New York and Chicago.

Philadelphia may soon join the list, however, as city leaders recently approved a measure to outfit its 135-square-mile area with wireless broadband access. The city, with a $7 million to $10 million investment, will build out the infrastructure and then sell wholesale access to Internet service providers, telecommunications companies and not-for-profits.

In Indianapolis, many of the hotels, coffee shops, bookstores and restaurants are wired as hot spots. Most public library branches are equipped as well.

Acapulco Joe's, a downtown restaurant, became one of the latest adapters and is offering free access.

The Mexican eatery took the step in an effort to attract more business meetings, especially during breakfast hours, among customers who work nearby, owner Marcia Lasiter said.

John Livengood, executive director of the Restaurant & Hospitality Association of Indiana Inc., said hotels need to offer WiFi, or some type of broadband service, because customers have come to expect the amenity. Sellers of the new wireless technology are likely to attract just a fraction of society, he predicted.

"Not everyone's going to do that; the folks who come here for Gen Con might," quipped Livengood, referring to the game convention that attracts thousands of techies to Indianapolis each year.

But Doug Case, manager of the Midwest Wireless store that exclusively sells Verizon products, said customers have switched to its access cards after experiencing difficulties with WiFi.

"I had one who was trying to do a PowerPoint presentation at a hotel and it did not hook up the way it was supposed to," Case said. "After two hours, he gave up, and that was the last straw for him."

WiFi supporters contend users of its technology can browse the Internet quicker. WiFi is generally quoted as having a bandwidth of 11 Mbps, or 11 million bits per second, as opposed to third-generation cellular speeds of 2 million bits per second. But the reality for both is that they can be far lower.

"Cellular has very broad coverage, but it's slower," said Karen Hanley, senior director of marketing for the WiFi Alliance in Austin, Texas. "The pipe is not as big."

Analysts say third generation mobile technology also could make inroads in rural areas where fixed broadband service isn't available.

It's also expected to be a big hit in countries where infrastructure problems limit access to fixed broadband services. In India, for instance, experts predict there will be as many as 20 million third-generation wireless users by 2010.

Big investments

In January 2004, Verizon Wireless became the first carrier in the United States to roll out a national third-generation network. The company is plowing $1 billion annually into the technology that is now available in 181 metropolitan areas, spokeswoman Michelle Gilbert said.

At the same time, computer makers such as Santa Clara, Calif.-based Intel Corp. have been including WiFi technology in new laptops. About 90 percent of mobile computers are equipped with WiFi capabilities, said Hanley of the WiFi Alliance. As of last year, makers had produced 120 million chips, she said.

Ultimately, though, the two technologies may be more compatible than competitive. Some laptop makers are beginning to offer both capabilities-WiFi chips as well as built-in wireless modems, which would make the cellular access cards obsolete.

National technology information consultant ABI Research estimated that shipments of embedded wireless modems for laptops will equal those of cards by 2009.

And the next best thing always seems to be lurking around the corner. In this case, it's fourth-generation technology known as WiMax. It promises broadband access to Internet users at a fraction of today's cost and at much faster speeds and longer ranges.

BellSouth announced in June that it would begin testing mobile WiMax technology in the third quarter. Commercial services could be offered as early as 2007.

Whether consumers prefer WiFi or WiMax, both should be able to live in harmony, said Doug Murray, general manager of voice services at the local office of New York-based Bright House Networks.

Blasi of Cingular Wireless concurred, to a point.

"You want to give people the options," he said. "Overall, we think the ubiquity on the cellular side makes it more palatable to customers, though."
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