Edited by author 07-09-2003 05:36 PM
Intel vying to gain ground in WLAN market

By Jack Robertson , EBN
Jul 3, 2003 (12:06 PM)
URL: http://www.electronicstimes.com/story/OEG20030703S0024

SANTA CLARA, Calif. -- Intel Corp. trails its chief rivals in the market for wireless LAN chipsets for the new 802.11g standard by more than six months. But despite the gap, some analysts expect Intel to come on strong once it fields its advanced Wi-Fi devices.

An Intel spokesman said the company still expects to introduce its dual-mode 802.11b/g chipset in the fourth quarter, with Centrino-brand notebook PCs adopting the protocol in the first quarter of 2004. That places the Santa Clara, Calif., company behind at least three other vendors -- Atheros Communications, Broadcom, and Intersil -- all of which already are delivering production quantities of single- and dual- mode 802.11g chipsets. Moreover, several other vendors are expected to field their own "g" chipsets in the next few months.

The Intel spokesman claimed the company will not suffer as a result of its later entry into the 802.11g market. "We will launch product on our road-map. We take a long-range view of the Wi-Fi market," he said. "We won't release any product that doesn't meet the Intel-brand promise."

There are a few factors that may work to Intel's advantage. For one, the "g" standard was ratified by the IEEE only in June, meaning that the industry Wi-Fi Alliance will be spending several months conducting product compatability tests before certifying chipsets as compliant with 802.11g.

Another factor tilting in Intel's direction is the company's Centrino mobile wireless computing campaign which, similar to the Intel Inside program, subsidizes the marketing budgets of PC makers. Intel's expectation, according to analysts, is that its financial clout and general market presence will entice notebook computer manufacturers to drop other "g" chipsets in exchange for Intel's help defraying their product promotion costs.

But whether the company can roll back the gains of its competitors remains to be seen. Several rivals hope to use their earlier entrance to add enhanced chipset features ahead of Intel.

"The Intel delay gives us a huge advantage," said Jeff Abramowitz, senior WLAN marketing director at Broadcom Corp., Irvine, Calif. Abramowitz noted that while 802.11g chipsets share the same 2.4GHz frequency as Intel's existing 802.11b-compliant devices, "g" products offer data rates of 54Mbits/s -- five times faster than what Intel's Centrino platform can deliver today.

Intel will also miss out on the back-to-school and Christmas sales seasons, which are expected to be big drivers for "g" Wi-Fi, said Craig Barratt, president of Atheros Communications Inc., Sunnyvale, Calif. "By the end of the year, the sales of 802.11g and 802.11b should be running 50-50," Barratt said.

A spokesman for Intersil Corp., Irvine, Calif., agreed that "g" Wi-Fi chipsets will outsell the "b" version by the end of the year, with multimode 802.11a/b/g moving heavily into the notebook market in the fourth quarter.

Already the three "g" WLAN producers said major notebook PC builders like Apple, Dell, Fujitsu, Gateway, Hewlett-Packard, IBM, NEC, Sony, and Toshiba are offering 802.11g Wi-Fi as an option to the Centrino platform.

"Customers will determine whether they will buy the optional 802.11g Wi-Fi or stick with the Intel 'b' WLAN in Centrino," said Will Strauss, an analyst at Forward Concepts Co., Tempe, Ariz.

Atheros' Barratt said the decision to go with "g" or "b" Wi-Fi must be made by consumers at the point of sale, since the factory-installed WLAN mini-PCI card can't be easily replaced by the user.

Before it transitions to 802.11g, however, Intel will roll out a dual-mode 802.11a/b chipset in the middle of the third quarter. As with the "b" version, the chipset will use a radio component manufactured by Philips Semiconductors and an 802.11b baseband made by Texas Instruments Inc. For the first time, Intel said it will supply its own internally developed 802.11a baseband. Strauss said if Intel has developed an 802.11a baseband IC, then it is likely well on its way to developing an 802.11g baseband, because both WLAN protocols use a similar complex OFDM (orthogonal frequency division modulation) technique.

"If Intel has mastered this, then getting to a 'g' Wi-Fi shouldn't be that difficult for them," Strauss said.

Intel said that its 802.11b/g WLAN will be the first to use all-Intel chips for the radio, MAC, and baseband. Yet another Wi-Fi chipset, a multimode 802.11a/b/g device, is on the Intel roadmap, to be introduced in the first quarter of 2004.

Wi-Fi Hot Spot Market Picking Up
July 10, 2003

A new report predicts there will be rapid growth in the global market for Wi-Fi hot spots, or private locations around the world to link to public wireless networks.
Allied Business Intelligence, based in Oyster Bay, N.Y., says in its new report on Wi-Fi that hot spots will grow from their current level of 28,000 locations to more than 200,000 within five years.

ABI says that while North America is home to more than 12,400 hot spots, the Asia-Pacific region is expected to grow at a faster rate in the next few years. The study focuses on commercial hot spots, inside coffee shops, fast food restaurants, airports, railroad terminals and other establishments.

"For the Wi-Fi market to grow over the next few years, several things have to happen. For one, roaming agreements between operators need to happen. Secondly, there has to be a clear single message to consumers on the value of Wi-Fi," says Tim Shelton, director of wireless research for ABI.

"The greatest opportunity could potentially be with the cellular providers, because it will help them drive consumers to the data usage model," says Shelton, adding that T-Mobile is currently the biggest operator of hot spots around North America, other operators include Wayport, and a host of smaller players.

Shelton said one private company making a major push into the Wi-Fi market is Boingo. "They are not strictly an operator, but more of an aggregator. They don't own the actual network, but they enter to roaming agreements to offer Wi-Fi based services."

And beyond wireless network service providers, if the Wi-Fi hot spot market grows, there will be other beneficiaries.

"The hot spot market certainly will provide opportunities for access point hardware manufacturers and other backend solutions," Shelton said.

Despite the rosy market outlook, ABI's Shelton does say that there are concerns about hackers being able to violate the integrity of Wi-Fi-based wireless networks.

"While there's no question there will be growth, wireless security remains a must for the credibility of the hot spot market," says Shelton.

Shelton expects that hotel chains, restaurant franchises and other national retail chains will potentially use hot spot technology "to drive customers to their doors and to capture a competitive advantage by offering an innovative wireless service."

Starbucks (Quote, Company Info), McDonald's (Quote, Company Info)and Borders (Quote, Company Info) are three national chains which have gotten behind the wireless technology by putting Wi-Fi hot spots inside their commercial establishments.

Shelton said these companies believe it will provide added-value to their customers and predicts revenue generated from hot spot technology will rise from $59 million this year to $3.1 billion in 2008. Users pay either an hourly, daily or monthly fee to access Wi-Fi networks.

"Some of the issues facing the hotspot industry range from interoperability between hotspot locations to the need for operators and aggregators to acquire more users," Shelton writes in his report.

ABI's report is called "Wi-Fi Public Hotspots: Business Case Analysis through Deployment and Subscriber Forecasts."

All Aboard for Canadian Wi-Fi
July 10, 2003


Passengers traveling between Montreal and Toronto will now be able to check their e-mail and conduct other Internet access functions thanks to a new wireless network installed on some Canadian trains.

Intel (Quote, Company Info) Wednesday said it has teamed with Bell Canada and VIA Rail Canada to equip a handful of cars with wireless LANs. The four-month pilot service combines the technology, products and services of Bell Canada in conjunction with Intel and PointShot Wireless.

While it's a first for Canada, making the Internet available on trains got its North American debut on three popular U.S. Amtrak lines. That six-month campaign back in January 2002 outfitted riders with Compaq iPAQ Pocket PCs while Yahoo! provided the wireless connections.

The Canadian experiment is part of Bell Canada's AccessZone project and will let an Internet connection be transmitted to the train from Bell ExpressVu's Internet satellite service to onboard equipment and then to the end-user's notebook. Responses from the end-user's notebook are then transmitted back to the train's wireless networking equipment and then delivered over Bell Mobility's 1X wireless network to the Internet.

On the outset of the pilot, VIA Rail express train number 53 from Montreal to Toronto and number 66 from Toronto to Montreal will have a VIA 1 car equipped with WLAN capabilities. During the pilot Bell Canada intends to rollout more VIA 1 cars with WLAN access.

For its part, Intel is using its "Wireless Verification Program" via its Centrino mobile technology to test the system and make sure its compatible. Ottawa-based PointShot is providing the wireless technology within the train.

Supporters of the project point to a survey conducted by PointShot and Intel that showed 90 percent of respondents saw benefits in having the ability to access the Internet and e-mail while on a train.

"Our research indicates that Canadian business people want to use their travel time to catch-up on email, work on presentations and do other work-related tasks. They appreciate easy and convenient access to the Internet," said Intel Canada general manager Doug Cooper.

Intel has been on a tear of late getting new and unusual places set up with wireless. Earlier this year, the Santa Clara, Calif.-based chip making giant equipped a Boeing plane with a WLAN. The No. 1 chipmaker has also been instrumental in launching hotspots in McDonald's fast food restaurants.

Bell Canada is also aggressively pursuing the 802.11 brass ring with its AccessZone project. Launched in December 2002, the pilot has grown to include more than 20 enterprise locations including: Toronto's Union Station and Mount Sinai Hospital, Montreal's Dorval Airport, Kingston, Ontario's Confederation Park and Marina and Air Canada Maple Leaf Lounges.

Do You Want Wi-Fi With That?
Jason Ankeny
July 10, 2003

A story in yesterday's Chicago Tribune reported that the McDonald's restaurant located in the city's Field Museum was closed Tuesday after Department of Public Health officials discovered that employees had used pens to alter the expiration dates on some 200 cartons of milk. Additionally, a floor drain in the food preparation area was clogged with raw
sewage.

So this is the future of Wi-Fi, eh?

Mere hours before the milk carton debacle, McDonald's corporate leaders announced Monday an expansion of the in-restaurant " McDWireless " Wi-Fi initiative the fast-food giant first launched in Manhattan in March, and will now offer wireless Internet service in 75 restaurants in the San Francisco Bay Area. Other New York City, Chicago and even a few Canadian locations are on tap for later this year. McDonald's is partnering with service provider Wayport to offer the Wi-Fi access and, according to reports, plans to charge customers $4.95 for two hours of service.

Just one question: Who in their right mind is going to pay five bucks to access the Web from McDonald's? While I've certainly waited in McDonald's drive-thru line for what seemed like two hours just to get my order filled, the thought of willingly spending 120 minutes in their noisy, crowded restaurants, surfing the Net while unattended children scream and holler from high atop their perches in McDonald's Playland, makes me...well, grimace. (Given the choice between accessing the Web from a Turkish prison or a Mickey D's, I'd choose the former, if only because the food promises to be better.)

In the past, this column has expressed serious doubts about the future of T-Mobile's Wi-Fi rollouts in Starbucks coffee shops and Borders bookstores, but at least the coffee and bookselling businesses promote the kind of quiet, relaxed atmospheres conducive to comfortable Net access. (Not to mention that they cater to the more upscale, professional clientele most likely to seek out Wi-Fi-enabled destinations.) McDonald's whole business model, on the other hand, is geared to serving and dispatching customers as quickly as possible, hence the "No Loitering" signs; on the unlikely chance that Wi-Fi takes off among fast-food fanatics, how will restaurant managers feel come lunchtime should all their tables be occupied by Web surfers instead of diners? And from a customer point of view, what if there's a problem logging on? McDonald's employees are unlikely to be able to help, and besides, they're too busy changing the expiration dates on dairy products anyway.

Make no mistake: Wi-Fi needs to penetrate the mainstream consciousness, but while they don't come any more mainstream than McDonald's, McDWireless is as ill conceived as the McDLT. It's the wrong place at the wrong time. And that doesn't even bring into account network security--can you really trust the safety of your data to a company that keeps the Hamburglar on its payroll?

Mitsubishi beats Cisco to market with WLAN phone

By Guy Kewney, Newswireless.net
Posted: 03/07/2003 at 09:37 GMT


Accepted wisdom is that people will always need ordinary mobile phones "because voice over Internet isn't acceptable quality." IP Talk, in Japan, reckons this is nonsense: its new WiFi phone is designed for hotspots, uses voice-over-IP - and also offers Web browsing and email.

IP Talk is a subsidiary of Mitsubishi Electric, and its WiFi phone is conservative, using just standard 802.11b WiFi hotspots, according to a local paper in Japan.

The launch means that Mitsubishi has beaten Cisco to market; the Cisco WiFi phone will also appear this month, in Japan.

A comment from Microsoft's Mobility department said that despite cost savings, most people in the phone business didn't expect the system to be popular. "The quality of service, digitising voice and sending packets over the Internet using WiFi, is simply not good enough," suggested one senior Mobility executive at Barcelona TechEd.

But the advantage of using the internet is that the cost of a call, anywhere, is the same, no matter how long you talk. Mitsubishi and Cisco are betting that a call at zero incremental cost will attract a lot of users, especially those who are WiFi equipped at home.

Mobile Operators To Benefit From WiMax (IEEE 802.16)

As mobile data becomes more of a basic consumer and business user want through the years, services can be augmented by an emerging complementary standard to WiFi. This standard, 802.16a, will at first be used for fixed and portable applications and by 2004/2005 be utilized to offer the best price and performance available for high-speed wide area wireless data.

This more robust standard for high-speed broadband wireless delivery to laptops and desktops will begin to augment the burgeoning WiFi market beginning in late 2004. The position of the 802.16a standard today parallels that of WLAN technology in the late 1990’s, when the market finally grew as 802.11 price vs. performance gains converted WLAN from a niche to mass market. In the very near future, 802.16a will also achieve important price and performance points, a new Visant Strategies study finds.

“Under the current conditions, 802.16a could emulate 802.11’s rise several years from now,” said study author Visant Strategies Senior Analyst Andy Fuertes. “Many chip and equipment vendors ignored the chance to get into the 802.11 market early and create market share due to market-size limitations created by high equipment costs, a much smaller potential audience and no need for all things Internet and Intranet yet. WiMAX offers these technology companies a fresh start.”

802.16a is considered the next step beyond WiFi because it is optimized for broadband operation, fixed and later mobile, in the wide area network. It already includes numerous advances that are slated for introduction into the 802.11 standard, such as quality of service, enhanced security, higher data rates, and mesh and smart antenna technology allowing better utilization of the spectrum.

The study, “ 802.16/WiMAX Technologies: World Market Forecasts 2003-2008,” finds WiMAX and WiFi complementary as the two technologies address different segments of the market and are optimized for different tasks; local vs. metropolitan area networking. Last mile access will be the first application for 802.16a but mobility will follow via 802.16e. WiMAX is considered a migration path to 4G, but more likely to be used by holders of BWA spectrum rather than mobile carriers. 802.16a is also expected to play a role in outdoor and private networks, the expansion of indoor hot spot locations, and backhaul applications that lack line-of -sight.

The opportunity for 802.16a equipment is forecast to reach a value of approximately $1 billion in 2008, the study finds, with growth accelerating late in the period. The study provides global forecasts by region for 802.16a/e equipment, chipset shipments, and service revenues.

Enterprise LANs: What Next?

By Tom Nolle
07/07/2003 12:00 PM EST
URL: http://www.networkmagazine.com/shared/arti...?articleId=10818277

The foundation of enterprise networking is the LAN. First deployed in the mid-1980s to provide for the sharing of then-expensive hard disks, LANs are now the vehicle through which almost 90 percent of all business computers gain primary communications access. Even sites with WAN connections use those connections to link LANs in most cases. All this means that changes in the LAN space are extremely critical to network users.

Change number one is the Wireless LAN (WLAN). Popular for several years in Silicon Valley, WLANs are now sweeping into the rest of the country, driven by diverse factors such as the increased use of laptops as mobile work platforms within the workplace, increased interest in IEEE 802.11-based "hotspot" Internet access, and even home networking.

Security issues with WLANs are well known, but a lesser-known problem is address management. Portable and mobile users may change access points within a facility, which can impact IP address management, and even compromise application security measures where a subnet address is used to authenticate a user's rights to "see" specific applications. It's important to understand how 802.11 will integrate with current addressing and application security schemes before jumping in.

Another wireless challenge is created by the new versions of 802.11 now emerging. With data rates ranging up to 50Mbits/sec, these variants could offer major benefits in performance. On the downside, they can bring higher costs, and congestion on the higher-rate versions of 802.11 can drop speed dramatically. So should you deploy the more established 802.11b (Wi-Fi), the newer 802.11a, or wait for 802.11g?

The introduction of voice traffic to the LAN also poses design challenges. There's little question that Voice over IP (VoIP) will dominate premises voice communications by 2006, and any company making a major premises voice purchase today needs to look seriously at VoIP. However, VoIP demands low levels of congestion and delay in the LAN, and many corporate LANs are already bulging from data traffic growth.

The big debate isn't whether something needs to be done to LANs to facilitate voice communication, but just what to do. Some favor traffic management, providing voice a priority and assigning specific QoS to voice flows. Others think the best solution is to over-engineer in capacity-bits are cheap, and 10Gbits/sec Ethernet is becoming available.

Speaking of cheap bits, there's a price revolution in the works as well. Many network veterans remember the price drops in LAN switches in the late 1990s-the ones that toppled Cabletron. Another such drop may be underway, spurred by the joint venture between 3Com and Chinese networking vendor Huawei. This could change the competitive landscape in the LAN switch area, as well as how network planners deal with other LAN challenges. Why? Because the new joint venture is threatening to drive down prices on LAN switches. Everyone expects Huawei to be a price leader, and Cisco Systems itself dramatically lowered prices on some of its products in April 2003, apparently anticipating the 3Com/Huawei venture.

Lower prices for LAN switches give planners the option to do major surgery on LAN design. Creating 1 Gigabit or even 10 Gigabit backbone links is now practical where 100Mbits/sec was the rule before, and getting all users on the LAN up to 100Mbits/sec from the typical 10Mbit/sec connection is also practical. All this capacity may mean that VoIP doesn't have to depend on traffic management-you can just bury your problems in bits. Additional capacity may be less expensive than trying to create traffic priorities for voice, and it could improve data application performance as well.

Faster LANs may also mean faster wireless. The original 802.11b standard is about as fast as a standard 10Mbits/sec Ethernet connection, but the new 802.11a and 802.11g standards can improve data rates to 20, 30, or even 50Mbits/sec. Obviously, faster WLANs mean more traffic on backbones, and cheaper switches can let planners up-speed their networks as needed to support the new wireless standards.

All of this speed and cheapness may come at a price. When LAN switches were tens of thousands of dollars even at the workgroup level, vendors could lavish sales and support attention on their customers. When prices fall, those sales and support resources tend to get spread thinner, and customers may not get the attention they once received. The past again provides a lesson: "I used to see my Cabletron guy every day," a representative from one Philadelphia engineering company told me. "But when switch prices dumped, the guy disappeared."

Some even believe that all but the high-end LAN products may end up going to distribution versus direct sales. Some of the low-end products will surely end up in retail stores. Sales on DVD-ROM drives, add-on memory, and LAN switches; coupons-we could be headed there. For very low-end products, we're already there. And remember, when PCs became commodities, companies had to develop their own internal experts to replace the support they lost from their suppliers.

More will be demanded of LANs in the next five years, and during that period, we may see dizzying declines in price and support. Buyers will have the option to develop capacity beyond their dreams, but they'll also have to dream up ways of keeping those super-LANs running. More equipment will deploy in LANs in the next five years than in the last ten, and more challenges will develop.

Research Firm Says Wi-Fi Will Go Bye-Bye

By Susan Kuchinskas
July 10, 2003

Emerging technology researchers say Ultrawideband (UWB) will eventually beat out the current Wi-Fi wireless networking standard and make Bluetooth go the way of the sabertooth.

Meanwhile, according to West Technology Research Solutions, (WTRS), the open standard ZigBee protocol will enable every system in the house to talk to each other.

If those bold predictions from the Mountain View, Calif.-based WTRS come true, then they promise that standards battles for wireless networking will continue into the next decade.

The firm said Ultrawideband, or UWB, would eventually eclipse the 802.11b , or popular Wi-Fi networking protocol, which is spreading in use across the country, helped by rollouts of wireless Internet access in Starbucks coffee houses and McDonald's Restaurants.

Another report, also released today, predicts that the Zigbee Protocol, which promotes the IEEE 802.15.4 standard for low-power wireless applications, will become ubiquitous and dominant in two-way low data-rate wireless applications for the home.

UWB works in what is sometimes called the "garage door spectrum," the unlicensed frequency of the spectrum commonly used for garage door openers, portable telephones and baby monitors. But its high speed data transit capabilities of 40 to 60 megabits per second, in some cases nearly ten times as fast as Wi-Fi, low power requirements, its ability to penetrate walls, and use GPRS information make UWB an attractive option for all kinds of handy machine-to-machine communications.

UWB's data throughput potential, and its ability to support a piconet , (an ad hoc network of devices using the Bluetooth networking standard) means it has the potential to displace technologies used in local area networks, WTRS' Ultrawideband Market Report said. UWB's impact could be just as dramatic on technologies used in personal area networks and, eventually, even the CDMA cellular networking standard that is deployed by many U.S. cellular carriers, the report continued.

Already, Consumer electronics manufacturers are experimenting with UWB, according to WTRS principle Kirsten West. "Streaming video to the television set wirelessly is the hot application they're working on right now," West said. UWB will also become the standard for the home gateway, the control center for automating everything from the security, heating and lighting systems to remote controlled appliances and home entertainment centers.

In office buildings, UWB is expected to replace 802.11b networking protocols because of its penetration abilities. "Walls, cubicles and people can all interfere with 802.11 technologies," West said. "UWB doesn't have this problem." She estimates that Wi-Fi companies will enjoy about a ten-year run of sales before UWB technologies begin to disrupt their products.

The report also said that a number of manufacturers plan to make UWB-enabled cell phones in order to provide the same kinds of short-range networking features and functions that Bluetooth can provide.

Right now, today's UWB-enabled chips have a range of only around 30 feet, but that's due to a cap on the amount of power they can be transmit. West said that the Federal Communications Commission may change that cap, which would allow telcos to replace their CDMA cellular towers with the cheaper, more powerful UWB chips.

UWB has the potential to wipe out current contenders in wireless local area networks and -- eventually -- wireless wide area networks, according to West's second report, called ZigBee Market Report and Analysis. It said that the evolving open standard, which has a radio frequency range of 30 to 225 feet and uses very little power, could take over from the mess of non-standard transceivers now being used for home automation. "It won't become a household name, from a consumer's point of view, but it will be important for manufacturers because their products will work with others. You need the ability for connection among machines from various OEMs."

For example, a Whirlpool smart washer and a GE smart refrigerator will be able to communicate with the same home gateway. The report predicts that by 2006, annual shipments for ZigBee-based chipsets for home automation alone will exceed 46 million units and continue to grow rapidly.

It predicts that at least one small corner of this industry will not suffer disruptive change. Today's garage door openers will work just fine with the next generation of wireless networks.

Wi-Fi wafts to RV parks, beaches

By Michelle Kessler, USA TODAY

SAN FRANCISCO — As big players such as McDonald's bring wireless Internet to the masses, smaller companies are taking Wi-Fi technology to quirky spots.
Take the Truck Pride Travel Center in Chicopee, Mass., where truckers check e-mail from their rigs. Or the Club One gym in Pittsburgh, where fitness buffs log on after workouts.

All they need is a laptop set up for Wi-Fi (most new laptops are) and a credit card to pay fees of about $5 an hour.

Wi-Fi, which sends Web pages through the air as radio waves, works well in any spot people spend a lot of time sitting around, entrepreneurs say. They're setting up Wi-Fi service in:

•RV parks. At the Austin Lone Star RV Resort in Texas, campers can surf the Net for $3 an hour, or $45 a month. About 40 sign up each month — both young, tech-savvy tent campers and snowbirds with RVs, says Jim Rowley, owner of the 159-spot campground.

Lone Star could soon have competitors. Wireless start-up LinkSpot has installed Wi-Fi in 30 East Coast RV parks, and plans to expand to more than 100 nationwide.

Rival TengoInternet has equipped 12 parks in California, Texas, Arizona and Florida.

•Marinas and beaches. Sunbathers atNewport Beach, Calif., can surf the Web before they surf the waves, thanks to start-up Beach Wireless. In Newport, R.I., they can surf DSL.net. Competitor iDockUSA has equipped 13 California marinas. The companies charge $3 to $7 an hour.

The services are targeted at beach-goers and boaters in their slips, but they work offshore, too. In Rhode Island, the Wi-Fi signal reaches 21/2 miles across the bay.

•Laundromats. Customers of Bar of Soap in Dallas can check e-mail while waiting for their clothes. Wi-Fi start-up Serynade is hooking up a San Francisco laundry and has others planned.

Big players are pushing Wi-Fi, too. McDonald's, one of the latest, plans to equip several hundred stores in the New York, San Francisco and Chicago areas with Wi-Fi by year's end.

Bookseller Barnes & Noble will start testing Wi-Fi in 24 stores in Seattle and Atlanta next month, with plans for a nationwide rollout next year. SBC plans a Wi-Fi service. T-Mobile, Verizon Communications and others also have growing Wi-Fi networks.

Nearly all Wi-Fi services are losing money, analysts say. Some fear that the technology is overhyped and will go bust. Several Wi-Fi services have gone out of business in the past two years.

But companies are taking a chance for a piece of a fast-growing market. More than 53,000 Wi-Fi networks will blanket the USA by 2008, researcher Gartner says.

Renewing the case for LMDS

WASHINGTON - LMDS still has a fighting chance to become a viable, data distribution channel for metro customers as long as service providers orient their business plans around historically favorable economics, said speakers at the WCA (Wireless Communications Association) International Conference held here.


Support for LMDS has widely soured in North America during the last few years because of the collapse of fixed wireless providers like Winstar and Teligent. But, the last chapter probably has not been written on the microwave technology, which in most cases provides high-capacity (up to 100Mbps) distribution through a point-to-multipoint architecture up to a five-mile range.


"What has changed in the last three years is groundbreaking," said Mark Salter, XO's vice president of fixed wireless. XO has an enormous stockpile of LMDS licenses. Salter indicated the provider has its eyes on a national rollout of LMDS services, following a pair of trials currently going in Southern California.


Salter identified several factors that have changed the economics of LMDS. First, today's LMDS radios are far superior in terms of performance. Gear is about 50% cheaper. There is increased customer demand for burstable and scaleable bandwidth. And, unlike the all-or-nothing providers of the past, carriers like XO are building their networks to target revenue and not just to broaden the footprint, said Salter.


Sheldon Gilbert, executive vice president of engineering at fixed wireless maker Ensemble Communications, said LMDS still is viable because he says "wireless DSL" products fail to provide the capacity demanded by enterprises.


A significant share of business buildings in major cities lack fiber or fiber-like connections, said Gilbert, who presented a map highlighting the fact that only 5% of buildings in the financial district of San Francisco are endowed with high-capacity access. "We can provide a range of applications like VoIP and metro Ethernet in a uniquely competitive way," said Gilbert.


Scott Sweetland, vice president of sales at Ceragon Networks, another fixed wireless supplier, stressed that LMDS has another thing going for it - the FCC's recently moved to allow carriers who possess wireless licenses to lease out some of their capacity. Members of the FCC have stated that they believe the creation of secondary spectrum markets could free up more bands and enable more utilization.


Salter, however, said the development is so new that the market is still in search of consistent pricing models.


The opportunity to use microwave for cellular backhaul traffic seems also to be widening, according to panel speakers. Salter said wireless carriers are more interested in accessing licensed spectrum instead of unlicensed spectrum, because of reliability issues.


Nonetheless, wireless carriers continue to rely on T1 lines to transmit traffic. Their allegiance to these contracts (often with landline partners) shows little sign of lessening.

Edited by author 07-11-2003 04:26 PM
UltraWideBand could hurt WLAN take-up

West Technology Research Solutions (WTRS), a market research firm focusing solely on emerging technologies, has announced the availability of their newly updated analysis that demonstrates that overall dominance of UWB in the high data rate wireless market place is virtually inevitable.

"Despite its market potential, UWB product release into the market is and will continue to be incremental, in direct relation to overcoming challenges from those industries who are concerned with RF interference issues," said Kirsten West, one of the principals of WTRS. "The throughput potential of UWB being one thousand times greater than 802.11b, and its attribute of supporting a piconet of unlimited size, has the very real potential to displace technologies in LANs, PANs, and ultimately in WANs. A significant number of companies in the technology and communication industry, notably cellular phone handset manufacturers, are fully aware of UWB's immense commercial application, anticipating that UWB will create a wealth of options that likely leave CDMA behind as no longer sufficient."

West estimates that, given a 4% global GDP growth rate, annual shipments for Ultrawideband chipsets into the communications segment alone will exceed 63 million units by 2007. WTRS forecasts 3 scenarios that are dependent upon global GDP growth projections. These reflect adoption potential in various markets while taking into account the nascence of the technology market and its consequent susceptibility to economic conditions.

Edited by author 07-11-2003 04:29 PM
Flying Under The Radar

July 10, 2003


Alex Neihaus has the passion of a Wi-Fi true believer, and a missionary's zeal. As president of Air11 Technology, a New England reseller of Toshiba's Wi-Fi hotspot service, it's his job to make converts, of course, but Neihaus shows signs of being better at it than most.

After operating for only 90 days, he already has seven locations up and running -- in some unlikely locations, such as Bed & Breakfast inns and small marinas, but also at the prestigious Southbridge Hotel and Convention Center, a new conference hotel mid-way between Boston and Hartford.

Neihaus claims he has closed every sale when pitching prospective location owners that already have broadband Internet access. The cost to them is under $250 (mostly for the Toshiba access point/gateway). Air11 installs and manages the technology. Toshiba provides all the back-end billing and authentication services, as well as 24X7 technical support for end users.

There is little risk for location owners, plus the lure of shared revenues to defray monthly costs of their broadband Internet connection. (It's a three-way split. Neihaus won't say what part Toshiba gets, but he offers location owners a 50:50 split of the remainder. Other Toshiba resellers are or offering 20 and 30 percent to location owners, he says.)

Neihaus says he "wouldn't be surprised" to have 75 to 100 hotspots up by the end of the year.

Wi-Fi hotspots, he is fully convinced, will become ubiquitous very quickly, and it will be small players like his own one-man company that will make it happen, not the big guys. Many of the large ISPs, he notes, are already losing interest after making their moves too soon.

"I find it amusing that at the exact moment everything is finally working together towards the original vision, everybody is turning sour on [the Wi-Fi hotspot business]," Neihaus says. "It's always the same in the technology industry -- this perpetual impatience."

A tech industry veteran, Neihaus spent 20 years with Lotus and IBM and then ran his own software company before selling it. He knows of what he speaks.

By "everything" he is referring to three converging technology drivers:

Cable and DSL companies are battling for dominance, which means broadband is becoming more readily available in more places and prices are coming down. Result: more prospective hotspot location owners already have broadband access.
Toshiba and other low-end hotspot product/service providers such as Pronto Networks and NetNearU are bringing turnkey solutions to market featuring price points that make it very easy for small and mid-size location owners to take a chance on Wi-Fi.
Wi-Fi client devices continue to proliferate.
Yet analysts like Gartner and IDC are "turning sour" on the Wi-Fi hotspot concept after initially promoting it, Neihaus contends. The reason is that big players such as T-Mobile, with its project to put hotspots in Starbucks coffee shops and other stores across America, have run into some roadblocks. T-Mobile lowered the price for its service earlier this year.

T-Mobile's business model and timing were flawed, though, Neihaus maintains. It started rolling out its Wi-Fi hotspots when hardware prices were still high, and in most shops it installed expensive T-1 Internet connections, making it difficult for individual locations to break even.

It's also true that usage has not been as high as hoped, but that should have been foreseen, he says -- and it won't last forever.

"The usage will come. This is not a simple build-it-and-they will-come thing. It does take time and effort. On the other hand, Intel is not going to stop building Centrino laptops, and they'll all want to be used. [This current attitude] is just impatience."

He cites the case of one of his marina hotspots on a recent rainy weekend. With sailing curtailed, "live-aboards" and weekend sailors racked up 35 hours of usage on the service in one 48-hour period. "That's an amazing achievement for a hotspot that's been up for less than 30 days," Neihaus says.

So while the big guys puzzle out how to make a buck, Neihaus -- who admits he's "losing money hand over fist" right now -- will attempt to fly under the radar. He'll do it by keeping costs low, going after supposedly less desirable hotspot venues -- and being patient.

The big players, he points out, are all focused on business travelers, a mistake, he believes. "There's a disconnect in the way the industry sees these things," Neihaus says. "It's not just the traveling business person anymore, it's almost everybody."

Because Wi-Fi LANs became a consumer technology early, with massive shipments to residential customers in 2001 and 2002, access points and client devices are "already dirt cheap," he says -- low enough to make the technology ubiquitous.

The same kind of unforeseen viral spread has happened with other technologies in the past -- like e-mail, he notes -- but the technology industry "suffers from an almost total lack of historical perspective."

The major hotspot players all continue to go after high-traffic locations such as airport lounges and big hotels, but Neihaus argues there are others where the value hotspots provide is much greater. At B&Bs, marinas and ski resorts, for example, hotspots let weekenders spend time with family and friends but still keep in touch with work and the rest of the world.

Not everything about the way his business is evolving is perfect, Neihaus concedes. He chose Toshiba because it had the most attractive price points and a true turnkey offering, including all-important end-user tech support.

Now he's finding that some end customers are dissatisfied with the limited pricing plans. They can pay $5.95 for two hours or $11.95 for 24 -- or as little as $8 if the location owner subsidizes the pricing, as Southbridge does. They can't bank time, though.

The low fees and "episodic" pricing model are good in that they turn Wi-Fi access into an impulse buy, Neihaus says. On the other hand, regular customers would like to pay on a monthly basis, and he concedes many would probably prefer to buy a block of time on the network that they could use as needed -- like prepaid cellular.

Toshiba's pricing strategies are completely outside his control, however, and the company doesn't discuss them with him. It will eventually respond as more customers ask for different pricing structures, he believes, but if it doesn't, Air11 isn't locked in.

"I own the valuable thing, which is the relationship with the location owner," Neihaus points out. "I have to do the right thing for them and for my company. If there's demand for [different pricing plans] and Toshiba can't satisfy it in a timely way, well, they have lots of competition."

In the meantime, Neihaus will continue to fly under the radar and make converts at the grassroots. This, he says, is "the next phase of the Wi-fi-zation of America."

Pechanga is Betting on Wireless

July 9, 2003


Rod Luck is betting that a wireless local area network (WLAN) will attract business travelers to the Pechanga Resort and Casino .

"We're trying to get conventions and business travelers and a lot of them ask if we have wireless," said the aptly-named Luck, IT director for the 522-room facility in Temecula, Calif., east of Los Angeles.

As a result, deploying the WLAN in the parts of the complex used for conferences and conventions was one of his department's first major projects after the resort and casino opened last year. . "We opened in June (2002) and in July and August we were installing wireless," he said. "We did it as soon as the hotel and casino were stabilized."

However, while the WLAN now is in wide use by conference attendees, Pechanga's deployment also points to how the current lack of strong WLAN security standards has the potential to slow adoption by end users.

Luck said the wireless deployment itself was relatively easy, although he took an unusual step to save money.

"We had a 3Com engineer come and do a site survey," Luck said. "That person drew up a diagram of where the access points should be."

Following the survey, Luck's team installed eight fixed access points in places where large numbers of people gather, such as the ballroom. The units are 3Com's Access Point 8000, which adhere to the 802.11b standard.

However, Luck said adding access points to cover the facility's many smaller conference rooms and meeting areas would have been a budget buster, so his group placed another six access points on rolling carts. If a group requests wireless coverage and is in a room not served by fixed access points, a member of Luck's staff rolls one in.

"There is cable in the walls of all the meeting rooms, so we just bring the cable out to the access point after we roll it in," he said. "That eliminated some costs."

He noted that his IT shop treats the rolling access points like any audio/visual aid. In fact, Pechanga's IT shop manages audio/visual services, including such old-line equipment as overhead projectors. As is typical with such equipment, Pechanga charges conference organizers for use of the wireless network, but Luck said that the charge is nominal -- typically between $100 and $300 a day, depending on usage.

"We're just trying to cover our expenses," he said.

Deployment of the wireless network took between two to three weeks. "We're pretty quick around here," Luck said. So far, he has run into no surprises. In particular, there hasn't been a single problem with interference.

Setup for users is relatively easy -- if they have the right equipment. Besides a wireless network adapter, all they need is an IP address for the network, which typically is set either by the attendee's IT shop or is set automatically by the operating system using DHCP. However, Luck said his staff provides support for users who need it.

"The support calls we get are mostly from Windows 98 and 2000," he said, noting that Windows XP handles connecting to wireless LANs more adroitly. "But we don't get many calls -- maybe not even ten a month."

To ensure the security of the company's internal network, Luck said the wireless network used by conference attendees is entirely separate. However, another security issue has the potential to lessen usage and shows how hard it can be, given the current state of wireless security, to put a WLAN in public places.

Specifically, Pechanga's WLAN uses 3Com equipment that uses that company's proprietary Dynamic Security Link (DSL), a 128-bit encryption scheme. The user's WLAN network adapter must support that protocol, which most 3Com adapters do. However, adapters from other vendors don't support DSL.That is potentially a problem since, obviously, 3Com is only one of several vendors of WLAN network adapters. Luck claimed that, so far, no conference attendees have complained. And, if it does become a problem, Luck said his shop rents 3Com NIC to users for about $10 a day.

Since the organization's original intention was to serve only conference and convention attendees, Luck said he considers Pechanga's WLAN to be fully deployed -- for now. He said that the organization's back office is wired, and there is no need to deploy the WLAN there.

Unlike many hotels, Luck said he is keeping WLAN coverage out of the lobby and guest rooms.

"We don't want to clog up the lobby," Luck said. "And we have wired broadband access in the guest rooms." As is the case with many business hotels these days, guests pay a daily fee for wired broadband access in guest rooms.

Nor is there wireless coverage in the casino, but that will change in time, according to Luck. A WLAN there would enable casino employees to walk around with wireless-enabled handheld devices that access casino-specific software. When they find an active player on the floor, or somebody who is likely to spend a lot, they could look that person up.

"Then, we could decide how best to market to those people," Luck said. "We can find out what kind of player they are and whether we can give them something complementary."

However, the casino can't deploy that application wirelessly because the California Gaming Commission must approve use of specific applications via a WLAN, and that has not yet occurred.

"The gaming commission has approved some casino systems, but our particular software hasn't been approved yet," Luck said. He had no doubt, however, that the commission eventually would approve the software. "It's the trend of the future," he said of the wireless casino application.

In the meantime, Luck said that he is very pleased with the role the WLAN plays in attracting conferences and conventions.

"People use it all the time -- the number is probably in the thousands since it was installed last fall," Luck said. "It definitely enhances our ability to attract business."

Edited by author 07-22-2003 12:37 PM
Sprint Unveils Wi-Fi Strategy

BY BRAD SMITH
JULY 21, 2003

Sprint PCS announced its Wi-Fi hot spot plans today, initially offering
the service at 800 locations later this summer through partnerships with
Wayport Inc. and Airpath Wireless Inc.

By the end of the year, the carrier said it will have more than 2,100
locations, which is almost the number that T-Mobile HotSpots has launched through its
various partners, including Starbucks. T-Mobile also has started integrating its
Wi-Fi offering with its GPRS network, initially with a unified bill.

Sprint PCS' Wi-Fi Access will use its PCS Connection Manager software to
detect both Wi-Fi hot spots and the carrier's cdma2000 1X network. Customers
using the PCS Connection Card by AirPrime PC3200 will have an enhanced version of
the
software that manages both network connections, although a separate Wi-Fi
card or embedded 802.11b chip will be necessary.

The CDMA carrier already has been offering enterprise installations of
Wi-Fi through partnerships with Cisco Systems Inc. Among its customers is Case
Western Reserve University.

Airpath Wireless provides Wi-Fi management to 300 providers in 15
countries.Wayport provides Wi-Fi to some 500 locations, primarily hotels
and airports. Sprint said it is in negotiations with airports, convention
centers, hotels and other public venues to build out its own Wi-Fi infrastructure.
The carrier said it plans on integrating Wi-Fi and PCS monthly payments later
this year. Pricing will be announced when the service becomes available.

Sprint PCS and T-Mobile are not the only U.S. carriers with wi-fi hot
spots. AT&T Wireless Inc. also has a limited launch of Wi-Fi hot spots in some
airports. Verizon Communications Inc. recently activated 150 hot spots in the New
York City area and its wireless subsidiary, Verizon Wireless Inc., has announced
plans to launch Wi-Fi hot spots by the end of September.
These carrier hot spot rollouts have been expected. It's seen partly as a
defensive strategy, but also as a complement to the wireless carriers'
2.5G and 3G networks. Subscribers could use the cellular networks for wide-area
coverage and Wi-Fi for higher speed local coverage.

Many analysts still question the business model of hot spots, even if
Wi-Fi has gained a strong foothold in retail areas, airports, convention centers and
hotels. Juniper Research says there were 10,450 hot spots in service
globally by the end of June. The analyst group said that number likely would swell to
40,650 by the end of the year.

Juniper said the weaker hot spot providers likely will go away, either
ceasing operation or being gobbled up in a consolidation. Still, the analyst group
said the commercial hot spots will generate about $1.3 billion in revenue
globally by 2006.

As wireless hot spots proliferate, commercial windfall in doubt

NEW YORK (AP) - Take my Wi-Fi, please.

That might as well be the motto of the increasing number of people who set up wireless Internet networks in their homes and businesses and - sometimes unwittingly - leave them open for anyone to share.
Then there are colleges, geeks and city officials who are making Wi-Fi as free as the foliage in public plazas. And now you can use Wi-Fi gratis in New York if you're a Verizon Internet subscriber or eating an Extra Value Meal at some McDonald's restaurants.
Add it all up, and there's a significant number of places where people with a properly outfitted laptop or handheld computer can get wireless Internet access without reaching for a credit card.
That could spell danger for burgeoning efforts to charge big bucks for the use of public Wi-Fi "hot spots." While Wi-Fi is shaping up as a true growth engine for chip-maker Intel and other technology companies, the idea of luring people to pay for it in public could be a flop - outside of select places like airports that have a captive audience of business travelers.
"Carriers going in and making money simply offering Wi-Fi service to customers in coffee shops - the reality of that is, it's not going to be that big," said David Chamberlain, an analyst with Probe Research.
Wi-Fi, short for wireless fidelity, radiates an Internet connection that multiple computers can share, at very fast speeds, for about 300 feet - a single hot spot.
Because it uses unlicensed radio frequencies, Wi-Fi is relatively easy and inexpensive to operate. Many new laptop computers automatically detect Wi-Fi networks, while others easily can be made to do so by plugging in a wireless card.
Beyond widespread Wi-Fi use in homes and offices, the United States has some 5,000 public hot spots. That includes 2,700 operated by wireless phone carrier T-Mobile, mainly in Starbucks coffee shops and Borders bookstores. T-Mobile charges 10 cents a minute (the minimum cost is $6, however), $40 a month or $360 a year, though existing T-Mobile customers can sign up for $20 a month.
Analyst Tim Shelton of Allied Business Intelligence envisions 12,400 hot spots in the United States and Canada by year's end and 78,000 by 2008.
But he says the industry needs to get much better at attracting average consumers. After all, there are only so many business travelers and tech addicts who lug around laptops and are willing to pay to go online while out and about.
Though notebook computer sales jumped 17% in the United States and 14% worldwide in the first quarter, Gartner Inc. analyst Ken Dulaney attributes the rise to lower prices and better laptop performance rather than the buzz over Wi-Fi.
And Parks Associates, a market research firm in Dallas, recently found that only 3% of Internet users have logged on through Wi-Fi hot spots. Only 5% of that small group took out a subscription to a Wi-Fi service.
"If you don't really travel nationwide, what's the need for hot spots?" said Parks Associates analyst Yuanzhe "Michael" Cai. "If you are just the average consumer, why do you want to go to a Starbucks or a hotel lobby when you can just use your DSL at home?"
In hopes of stimulating demand, Wi-Fi proponents at Boingo Wireless Inc. are linking otherwise unrelated hot spots so users can roam, the way cell phone callers do when they leave their provider's range.
But even now, without widespread roaming, Boingo founder Sky Dayton believes there's more than enough demand to make for-fee hot spots successful. "In Wi-Fi, getting to profitability just doesn't require that much traffic," he said.
T-Mobile won't release subscriber numbers, but spokeswoman Kim Thompson says its Wi-Fi usage is growing. Still, she concedes "there are a lot of different (business) models out there."
"In terms of which one of those is going to win out, who knows?" she said.
Assuming mainstream demand picks up, how much of it will be consumed by community-based free hot spots, like the ones volunteer techies run in New York, San Francisco and other cities? The fashionable answer among commercial Wi-Fi purveyors is: not much.
There are too few free spots, their argument goes, and frequent users will be willing to pay for customer service and encryption that can protect wirelessly transmitted data from snoops.
Indeed, security fears have prompted several companies to prohibit employees from accessing corporate networks from home or community hot spots. Some, like Dow Jones, prohibit work-related access from any wireless network at all.
The knock on free networks doesn't fly with Ossip Kaehr, who uses the free Wi-Fi in midtown Manhattan's Bryant Park. Sitting with his laptop and his son at a table in the park one wet, gray afternoon, Kaehr said he doesn't believe security is any better on a Starbucks network.
In either place, Kaehr, chief technical officer for FirstGate Internet, only logs on through a virtual private network (VPN), which provides a secure tunnel to his office for data.
"I like a spot like this, to combine work and leisure," Kaehr said as four-story-high trees ruffled in the breeze and rambunctious organ chords drifted from a small carousel in the distance. "I browse free at home and in the office, so why pay serious money to use it in Starbucks?"
If that belief grows, so could hybrid Wi-Fi service plans. For example, Verizon is turning 1,000 New York pay phones into hot spots that can be used only by people who get DSL or dial-up Internet from Verizon. (As for security, Verizon doesn't employ encryption, advising wireless surfers to avoid sending sensitive information or to use VPN software.)
Probe Research's Chamberlain predicts similar models eventually will dominate. In that scenario, an Internet company like America Online would buy wholesale hot spot access for its customers from a provider like Cometa Networks, a joint venture backed by Intel, AT&T and IBM.
Another possibility, as Wi-Fi-capable handheld computers and cell phones proliferate, is for bookstores, coffee houses and other retail establishments to eat the few hundred bucks it takes to operate a hot spot, and offer Wi-Fi for free in hopes of getting customers to linger or return frequently.
Nine businesses along Boston's Newbury Street have shelled out $350 each to share a high-speed data line that feeds their stores so they can transmit free Wi-Fi. The network has been running for more than a year, and no store has dropped out in disappointment, according to its organizer, computing consultant Michael Oh.
"There's much more money to be had in selling more books, more coffee, many more bottles of wine, rather than trying to sell (Wi-Fi) access," Oh said. "The traditional payment plan of by the hour, or by the month, is eventually going to go away."

Cometa hot spots to get cold shoulder?

By Richard Shim
Staff Writer, CNET News.com
July 21, 2003, 4:00 AM PT
http://news.com.com/2100-1039-1027529.html

Cometa Networks is showing signs of stress as it races to meet an ambitious schedule aimed at making it the biggest provider of high-speed Internet "hot spots" in the United States.

The San Francisco-based start-up, formed late last year with the backing of technology giants IBM, Intel and AT&T, has announced show-stopping plans to build a network of 20,000 hot spots, with 15,000 up and running by 2005. Hot spots are areas where wireless Internet access is available to the public.

Seven months after its launch, however, Cometa <http://www.cometanetworks.com>; remains far behind competitors in the race to snap up the most valuable hot-spot locations and appears unlikely to meet its ambitious timetable, analysts said.

"I don't think they'll have the numbers they projected," said Pyramid Research analyst John Yurke, who recently wrote a research paper predicting Cometa will have only 10,000 hot spots in place by its announced deadline. "Wiring up a McDonald's is one thing. But to do all the rooms in a hotel or cover an airport can take weeks."

A Cometa representative said the company remains on schedule to meet its goals and downplayed suggestions that it is facing unexpected difficulties. "We're on track," said Cometa spokesman John Balbach, although he declined to elaborate.

Cometa has been in the spotlight because of its high-profile backers as well as the scale of its ambitions, which dwarf those of rival networks by aiming to make wireless broadband access nearly ubiquitous in the 50 largest U.S. cities.

But analysts point to a number of recent setbacks that signal the honeymoon is over for the start-up, which launched amid expectations that it would dominate the booming market for wireless broadband services.

Earlier this month, Cometa rival Wayport won a seat at a high-profile hot-spot trial with Cometa's only announced customer to date, fast-food giant McDonald's. Meanwhile, in a blow to Cometa's hopes of signing up telecommunications carriers, Verizon Communications and SBC Communications have both recently announced plans to create hot-spot services of their own, undercutting the chances of future partnerships.

Because size is one of the key measurements that carriers and service providers will look for in a partner, Cometa's plan all but requires it to be first in building the country's largest hot-spot network. But that task is looking more daunting now than it did when the company first launched, as companies have since rushed to enter the commercial hot-spot business.

To meet its 15,000 hot-spot goal, Cometa will have to build 500 hot spots a month for the next two-and-a-half years. That pace would quickly create the biggest hot-spot network in the United States. The biggest provider for now, T-Mobile, has just 2,400 active hot spots, and most network providers are building out new sites at a rate of tens per month, rather than hundreds.

But working on a less grand scale can have its advantages, analysts said, particularly in the race to secure high-quality hot-spot locations such as airports, hotels and other travel hubs that are most likely to attract large numbers of potential customers.

Lofty ambitions?
Cometa is under the gun because the company isn't thinking small and is looking to do it all itself, while competitors are moving fast and partnering with others to provide the right mix of services and products, IDC analyst Keith Waryas said.

"Cometa is in a tough spot because they're trying to get big, which makes it difficult for them to react quickly," he said. "But if they don't, they're of no use to carriers."

Cometa's Balbach countered that the company's efforts to create a true national network will result in significant advantages in price and quality of service over competitors, once it is built.

One of the biggest issues facing hot-spot companies is the lack of unified coverage, which might force a business traveler to hop between several different providers over the course of a single trip. This is a problem because customers must typically change computer settings and make different billing arrangements each time they sign on to a new system.

Some networks are striking so-called roaming agreements that allow customers from multiple services to use their equipment and thus quickly expand their service footprints. But Cometa said such arrangements are clunky and face enormous administration problems as the number of networks cobbled together increases. By contrast, the kind of single national network that Cometa plans to build avoids these problems and ultimately stands to reap benefits of scale.

Some analysts said the situation for now favors less ambitious hot-spot providers that have come out of the gate more quickly. Cometa competitor Wayport <http://www.wayport.com>;, for example, already has 650 hot-spot locations that it rents to service providers such as Boingo Wireless. By comparison, Cometa has announced just one customer, McDonald's, which has so far installed just 10 Cometa hot spots at restaurants in New York.

A Wayport representative downplayed the importance of sheer size and emphasized instead the need to get to the market first.

"It's not all about having the largest network; it's about having the best locations with the highest amount of traffic," said Dan Lowden, Wayport's vice president of marketing.

Wireless technology known as Wi-Fi has taken off as a cheap and effective way to share resources on a network, such as a broadband connection, and it has quickly spawned a commercial hot-spot service industry aimed at delivering bandwidth in high-use areas including hotels, airports and truck stops. Anticipating demand, providers are expected to add more than 55,000 new hot spots in the next five years on top of 4,200 locations in the United States at the end of 2002, according to IDC.

But the prospects for the service side of the business are not clear. The major criticism of the service business is that no one has been able to demonstrate a sustainable model. Part of that resides in the fact that the market is still young, but the other part is that it requires many new components and payment models, which are still evolving.

Hot-spot pioneer Joltage, for one, has already folded, saying that it appeared it would take longer than expected to acquire enough customers on its networks for the company to sustain itself.

Hooked on hot spots
Doubts about the viability of the hot-spot market haven't stopped numerous companies from trying to break in. Wireless service provider T-Mobile was among the first to jump into the market in a partnership with coffee chain Starbucks. The second-largest service provider is Boingo Wireless, which offers about 1,300 hot spots including 650 through its roaming agreement with Wayport. Other top providers include iPass, with about 1,000 hot spots that it rents from backend providers.

Some large telephone carriers are looking to build their own hot spots. Verizon has activated 150 free wireless broadband hubs in Manhattan as a sweetener for its digital subscriber line customers and plans to increase that number to 1,000. SBC also has said it will begin offering hot spots to its broadband subscribers under a similar arrangement.

Those announcements are seen as a blow to Cometa because Verizon and SBC represent the kind of big customers that the company is eventually hoping to sign on. Once they build their own networks, they may be less likely to seek out partnerships.

Meanwhile, Cometa is competing head-to-head with rivals in early trials with customers such as McDonald's.

Earlier this year, McDonald's announced plans to test hot spots in hundreds of its fast-food restaurants in New York, Chicago and a major market in California by year's end. The pilot program in Manhattan used Cometa for hot-spot service, but for its trial in San Francisco--which included 75 Bay Area restaurants with most up and running in the next few days--the fast-food chain went with Wayport.

A McDonald's representative said that the company plans to expand its Cometa trial within the next few weeks in New York and New Jersey, but declined to say how many restaurants would be involved.

"At the end of the year we will look at the data and customer feedback and decide where we go from here," the representative said. "We might go with just one provider, or we may use several. It's very much an experiment."

In a sign of how little time Cometa can afford to lose, the company on Wednesday confirmed that it is temporarily outsourcing key network management services to software start-up AuthDirect <http://www.authdirect.com>; as it awaits a similar application from investor IBM.

Analysts said Cometa's reliance, even temporarily, on a third-party provider such as AuthDirect underscores the challenges of building a massive network at top speed.

"To reinvent the wheel takes a lot of time and money, especially for research and development in a young market like this," IDC's Waryas said.