Working wirelessly: Welcome to Wi-fi

High-speed internet access at the pub? At the coffee shop? At the airport? 'Wi-Fi' can provide all these, and, as Tony Smith reports, Swindon is showing the way

The residents of the small Wiltshire village of Purton, a mile west of Swindon, may not realise it, but they're at the forefront of an attempt to provide people with high- speed internet access, anywhere, at any time using cheap, off-the-shelf technology. If that sounds like the "3G" third-generation mobile phone revolution – it isn't. It might instead be one of its biggest competitors. The system being set up in a quiet residential road could instead be the start of something that will cut the returns on billions of pounds invested by mobile phone networks in 3G licences and technology.

The residents of the small Wiltshire village of Purton, a mile west of Swindon, may not realise it, but they're at the forefront of an attempt to provide people with high- speed internet access, anywhere, at any time using cheap, off-the-shelf technology. If that sounds like the "3G" third-generation mobile phone revolution – it isn't. It might instead be one of its biggest competitors. The system being set up in a quiet residential road could instead be the start of something that will cut the returns on billions of pounds invested by mobile phone networks in 3G licences and technology.

Purton is the location of the UK's first access point to the Joltage network. It's based on the 802.11b (or "Wi-Fi") wireless networking standard, which operates in the unlicensed 2.4GHz radio band at speeds of up to 11 megabits per second – 20 times faster even than ADSL. It's already proving popular in homes and offices as a simple, inexpensive way to connect computers and share broadband connections. Windows XP supports 802.11b, as does the Mac OS, and modern Macs have 802.11b kit built-in, as do high-end notebooks from Dell, Toshiba, IBM and Compaq.

Wi-Fi uses "base stations" able to link wirelessly to a PC 50 metres away, and already means laptop owners can work from any room in the house or even down the pub. Extend that idea to airports, hotels, cafés and you've got the makings of a wide public internet access service, allowing subscribers and pay-as-you-go users to check their e-mail, read websites and download an MP3 or four while waiting for a flight. These are the people Joltage is trying to recruit, primarily in the US, but as Purton's listing on its website shows, globally too. It wants to create a network of 802.11 hotspots through which travellers will connect to the net at high speeds – and pay $24.99 a month or $1.99 per hour for the privilege.

Joltage isn't alone. The low cost of 802.11 base stations and add-in cards means public Wi-Fi hotspots are springing up all over the US. Early attempts to build 802.11b networks ended in commercial failure but consolidation and time spent rethinking the business model has led to a renewed roll-out of these services by companies, some independent, others allied to cellular providers such as VoiceStream.

Scenting the same opportunity, British operators are nosing out public Wi-Fi sites already. BT's Retail division is talking to hotel, airport and café owners about installing wireless LANs in their premises. According to Keith Trevorrow, programme manager with BT Retail's Mobility operation, these networks could become a £500m business for BT within five years. For the mobile phone companies pursuing 3G, that may be a "drop in the ocean compared to our revenues", as an mmO2 spokesman puts it, but it's still lost money and lost "mindshare" among the early adopters. The shift to 3G from today's GSM networks depends on winning both.

As one industry insider says, 3G's only advantage over today's phone technology is its higher data speeds. If a GSM phone handles voice and text well enough, why upgrade to 3G – particularly when you can get faster internet access in any town centre through a Wi-Fi connection? Even though Wi-Fi's theoretical 11Mbps connection typically works at half that speed for real data transfer, the best that 3G hopes for is two megabits per second (Mbps) – though Vodafone, mm02 and the others will launch it at 384kbps at most. And they're not due to launch until "late this year" or "summer 2003" at the earliest, while Wi-Fi is here now.

There are selling points to 3G, though. Coverage is likely to be better, simply because of the thousands of base stations the networks intend to roll out. "You'd need around 500 Wi-Fi base stations to give the same coverage as a single 3G site," claims mmO2. And if all 500 are running, swamping the 2.4GHz band's 11 channels with activity, data speeds will fall. That's a point Trevorrow concedes, but he believes there's a long way to go before there are so many Wi-Fi hotspots so close together that users experience performance problems. In any case, he says, Wi-Fi will reach many of those places 3G can't: inside buildings or underground. He's equally confident that Wi-Fi providers will develop technology that will allow users to move seamlessly from one base station's coverage area to another without having to log out and log in again.

Providing unified access to the network is a key part of BT's business plan, says Trevorrow. It's also the approach taken in the US by Boingo, Gric, HereUAre and iPass – creating not just hotspots of their own, but providing a single log-in to other, allied Wi-Fi networks. Joltage, on the other hand, is building its network by signing up individual base station owners willing to share their network and broadband link for cash. Here, the first of several flies appears in the Wi-Fi ointment. Reselling the broadband ISP's bandwidth to allow unauthorised (to it) users may be a breach of its contract; users might get cut off. But insiders at Telewest (which runs the blueyonder broadband service) say they may offer new tariffs letting other users access the link. BT is thinking about it too.

Proponents of 3G also raise the spectre of hackers breaking into unsecured networks to steal bandwidth and the revenue the Wi-Fi providers hope to make from it. But a BBC report showed that with so many insecure private Wi-Fi networks, these "War Drivaz" (who "sniff out" wireless networks without password protection then post such locations on the web) have plenty of opportunities for free bandwidth without any help from BT or anyone else.

Wi-Fi providers do face one big obstacle in the UK: using the 2.4GHz band for commercial services is illegal. Purton's enterprising network host may not realise it, but by offering a public communications service, even for free, he or she is breaking the law as laid down in the 1949 Wireless Telegraphy Act. Wi-Fi is in an unlicensed, but still regulated, part of the spectrum, explains Stephen Lowe, chairman of the Broadband Wireless Association. So you don't need a licence like a radio station to get a base station. But you can't do absolutely anything you like with it.

The Department of Trade and Industry's spectrum watchdog, the Radiocommunications Agency, has been seeking a consensus on how the law might be changed to permit commercial services on the 2.4GHz band. According to an Agency spokeswoman, the RA's recommendations to government will be published "soon".

The RA can't say how quickly the law will change, and neither can interested parties such as Telewest and BT. But Lowe believes the barriers to commercial exploitation will be removed by the end of the year. BT is equally confident. Indeed, it is planning to launch a public trial service next month. In the meantime, with little being done to police the Act, more hotspots will undoubtedly join Joltage's UK outpost and extend similar collectives, like Sputnik, into Britain. But whoever serves up public Wi-Fi access, it's clear there's demand for it. The number of notebooks used on public transport and in coffee bars is a sign that while Purton may be the first village with high-speed wireless net access, it won't be the last.