November 18, 2002 -NYtimes
Businesses, Big and Small, Bet on Wireless Internet Access
By JOHN MARKOFF
AN FRANCISCO, Nov. 17 — From a rooftop overlooking hundreds of failed dot-com businesses in the South of
Market district here, an inelegant picture-frame sized antenna is now radiating the Internet over a 20-block area.
There are some here who think that the antenna, a wireless Internet-access transmitter and receiver, represents the next big
thing.
In the wake of the wild financial boom and bust that followed the emergence of the World Wide Web eight years ago, it pays to
be wary. Yet there are those who argue that the wireless Internet is the logical next example of the new industries that have
successively spun out of Silicon Valley, from PC's to hand-held computers.
The next industry cycle may revolve around a wireless data technology known as Wi-Fi, which has the potential to eventually let
anyone with a computer or computing device connect to the Internet at high speeds, without cables. For evidence of the trend
look no further than airport waiting lounges, Starbucks coffee shops, maybe even your next-door neighbor's den, or any of the
other locales for the Wi-Fi hubs now used by an estimated 15 million wireless Net surfers in this country.
The Federal Communications Commission is taking a growing interest in the technology, and major companies including I.B.M.,
Intel and AT&T are hatching Wi-Fi plans.
Like the Web, which flourished into an entirely new medium created atop the freely accessible communications standards of the
Internet, Wi-Fi has a similar starting point. It has been made possible because the federal government decided a few years ago
to set aside a small swath of unlicensed radio frequencies and allow everyone who followed a simple set of rules to share them
among themselves.
Just as the Web opened the Internet to innovative information providers and hundreds of millions of users by making the network
easier to use, Wi-Fi, proponents predict, will make possible many innovations by making the Internet easier to connect to — at
speeds comparable to today's fastest digital phone lines or cable modem hook-ups. The next big wave in applications is likely to
be "location aware" communications — whether conveniences like directions to the nearest restaurant or movie theater, or
intrusions like neighborhood spam that will assault Web surfers as they sit in coffee shops or stoll down the street.
In an otherwise bleak Silicon Valley, Wi-Fi and its anytime, anywhere Internet capabilities now stand out as the one area in
which there is now a fresh burst of entrepreneurial and technical creativity.
"This feels like the opening of the PC era when for the first time you could own your own computer," said Ken Biba, the chief
executive of Vivato, the company with the odd-looking antenna. "With Wi-Fi you can own your own communications. That's a
profound social change."
An F.C.C. task force released a report last week that calls for rethinking the traditional approach by which regulators allocate
the public airwaves. The report recommended a more flexible consumer-oriented policy that will highlight new technology-based
systems to make more efficient use of the radio spectrum and make it easier to create new digital wireless services.
If the proposals become policy, there could be an even fuller flowering of the wireless Internet. Here in San Francisco, for
example, Vivato is but one of dozens of start-ups pursuing Wi-Fi opportunities.
Vivato's antenna is meant to expand Wi-Fi's current range and capacity — service to several dozen people all within a few
hundred feet of the transmitter — by making a single antenna accessible to a thousand or more people at distances of up to four
miles.
Vivato's antenna is able to create directional beams rather than radiating energy in all directions, as most other Wi-Fi systems
now do. This makes it possible to greatly extend the range of the system at low power and reach more users.
As many as two dozen other companies have appeared with alternative approaches to Vivato's, many of them involving
so-called mesh networks that use multiple antennas to pass data around like a bucket brigade. Beyond the antenna makers are
companies like Boingo Wireless and Surf and Sip that are attempting to assemble networks of individual Wi-Fi "hot spots"
around a region or around the country, permitting computer users to pay a single subscription or access fee and then use the
networks from a variety of sites as they move about.
So far, Apple Computer has been one of the few name-brand companies promoting Wi-Fi — in Apple's case with a product
called AirPort. But now some of the nation's most powerful technology companies are in the hunt. Intel, I.B.M. and AT&T are
jointly exploring an ambitious effort code-named Project Rainbow, which would create a Wi-Fi-based network of networks in
metropolitan areas across the nation. If they proceed — a public announcement may come soon — such a system would
conceivably put high-speed Internet access within easy reach of Web surfers in most urban areas.
Intel's motivation lies in its Banias line of chips for mobile computing, which it plans to introduce with a major marketing
campaign in January. The Banias chips will come standard with a built-in Wi-Fi function and are to be installed in more than 20
million laptop computers shipped next year. Intel forecasts that some 60 million computers worldwide will contain Banias chips
and their Wi-Fi feature by the end of 2004.
Intel is promising a marketing campaign that will exceed the scope of its effort to promote its Pentium 4 microprocessor, and the
company predicts that Wi-Fi will ultimately break the bottleneck that has limited the rollout of broadband, or high-speed,
Internet access to more than a fraction of United States households.
"There is no question in my mind that wireless `bitways' will make the traditional communications business obsolete," said Leslie
L. Vadasz, an executive vice president of Intel and president of its Intel Capital investment unit.
Expressing a similar view, the F.C.C. chairman, Michael K. Powell, said in a speech in Colorado last month: "Spectrum-based
paths to homes and businesses hold great promise for the delivery of high-speed Internet. These paths ride on a variety of
platforms: fixed and mobile, terrestrial and satellite, licensed and unlicensed."
Some economists argue that by opening more of the broadcast spectrum to more efficient use by new digital radio technologies,
the F.C.C. will further accelerate the rate of innovation that is already taking place. "When you have free spectrum you have zero
cost for that input and no restrictions on who can use the spectrum," said Gregory L. Rosston, the deputy director of the
Stanford Institute for Economic Policy Research. "It serves as a powerful incentive because there are people who have different
visions who create different devices."
He cautions, though, that Wi-Fi may not be a perfect solution. "At the same time, it may create congestion in the airwaves, so
there is a real trade-off," he said.
Moreover, many Silicon Valley entrepreneurs in the digital wireless world warn that powerful interests in the wired Internet
business are unlikely to meekly accept such a challenge to the status quo.
Traditional owners of the airwaves — from radio and television station owners to companies like Motorola that provide
special-purpose communications systems — may bitterly resist giving up some of their existing spectrum or being subjected to
potential interference from competing users. Veterans of the policy battles agree.
"In their candid moments everybody at the F.C.C. will tell you they are being pressured quite severely by various forces that are
quite concerned about Wi-Fi," said Reed E. Hundt, a former chairman of the F.C.C. "They're worried that it is really a trenching
machine that will uproot the entrenched forces."
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