Will You Buy WiFi?

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REX RYSTEDT FOR TIME

John Stanton of T-Mobile has partnered with Starbucks and surfs the net wirelessly in one of the chain's cafes in Bellevue, Wash.

If there is one lesson Larry Brilliant likes to distill from his life, it is this: Never settle for one career when nine will do. Starting out in the 1960s as a hippy kid from Detroit with a medical degree and a vague desire to change the world, Brilliant drifted into a surreal series of roles: physician to the Grateful Dead, co-star of a movie called Medicine Ball Caravan, seeker of enlightenment in India. The turning point came when, on his guru's advice, Brilliant joined the World Health Organization's effort to stamp out smallpox. "For a doctor, eradicating a disease is like climbing Mount Everest," he says. "It makes you want to find other mountains."

Brilliant has been scaling peaks ever since, not in medicine but in technology. Understanding the body, he discovered, helped him understand computers — the science of physiology translated into that of networks. In 1985 he founded one of the world's first commercial Internet ventures, an online community called the Well. Membership cost all of $2 a month, and the Well was a huge hit, a precursor of every online business from Amazon.com to eBay. Brilliant had established a reputation for seeing the future before anyone else and being able to make money out of it.

Now 58, Brilliant is engaged in his most audacious climb yet. The business plan he wrote for Cometa Networks — a joint venture of AT&T, IBM, Intel and others — is every bit as obstacle filled as trying to cure smallpox or getting people to pay to talk to others via computer. Cometa's goal is to take a technology that is exploding in every major city in the U.S., Europe and the Pacific Rim — grass-roots wireless Internet service that is as accessible as any radio signal, and often as free — and figure out a way to make you pay for it. In the long run, Cometa aims to be nothing less than the Windows of business Wi-Fi.

Wi-Fi stands for wireless fidelity, and the name is apt. Most who try it love it faithfully. No wonder: they are browsing the Internet on laptops untethered by cables, and at the high speed of 11 megabits a second — fast enough to let you watch a movie while you're downloading it. "I wasn't much of a surfer before," says Donna Gallagher, 37, an office manager and Wi-Fi fan in Wilmington, N.C. "Now I'm totally addicted."

She's not alone. In 2002, 20% of business laptops were Wi-Fi enabled. By 2005, analysts believe, that number will be more like 95%. Apple started things rolling in 1999 with its Wi-Fi system, known as AirPort, and in January unveiled a speedier upgrade called AirPort Extreme. Last month, in a bid to boost demand for laptops (and Intel processor chips), Intel released Centrino, a mobile technology that features a new microchip and a built-in Wi-Fi receiver.

Whether anyone will make serious money off the technology is an open question. Wi-Fi is shaping up to be one of those destructive technologies — like the Internet — that deliver huge benefits to users while slashing profit margins for existing businesses (think of what the Net did to travel agencies). It's easy to see how a blazing-fast connection on a big-screen laptop — anytime, anywhere — might pose a threat to firms like Sprint and Verizon, which are investing billions of dollars to deliver fancy 3G data services over your cell phone or laptop at slower rates and steeper fees. Yet there's no proof consumers will pay. "No wireless data-only network in the world has ever made money," warns Andrew Seybold, a wireless analyst based in Los Gatos, Calif. That so many have rushed to invest in Wi-Fi is, he predicts, "the next dotcom disaster."

One hurdle is the technology's simplicity, and the ease with which anyone can provide it. Ignore the geeks who use Wi-Fi's painful official designation, 802.11. Here's a more familiar name for the technology: radio. The Wi-Fi card in your laptop is a receiver, and the Wi-Fi router — which plugs into a cable or DSL modem at your home or office or coffee shop — is nothing more than a short-range transmitter-receiver. (Here's a piece of trivia for your next cocktail party: the patent on which Wi-Fi technology is based was filed back in 1942 by actress Hedy Lamarr and composer George Antheil.) Wi-Fi uses a frequency long set aside by the FCC for quirky radio devices — the downside being that microwave ovens and some brands of cordless phone can play havoc with the signal.

The range of transmission is usually 150 ft. to 300 ft., which makes Wi-Fi ideal for home use. It also works in most workplace settings. Shipping companies were the first to see the value of Wi-Fi in warehouses; FedEx estimates its Wi-Fi-enabled workers are 30% more productive since they've been unleashed. Hospitals and college campuses came next. Today 57% of all U.S. corporations, including all of the FORTUNE 1,000, have at least a small-scale Wi-Fi network, although only a few tech-savvy firms like Qualcomm and Novell have so far dared to roll out wireless service company-wide.

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