[Economist] PC Forum launches joltage, boingo, sputnik

Rohit Khare Rohit@KnowNow.com
Tue, 9 Apr 2002 13:53:52 -0700

An excellent overview of WiFi developments at PC Forum. These are 
critical new proto-munchkin efforts; just add mesh routing and life 
will begin to get quite interesting.

The future is a WiFi card duct taped to an iPod on the side of the road...

Wireless networking
Making Wi-Fi pay
Apr 4th 2002
Will enthusiasm for wireless networking translate into profits?

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 

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.