802.11 Takes Center Stage
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The setting seems all too familiar: a technology standard gets grassroots support and a movement starts, shedding light on a once-vague notion. As popularity grows, venture capitalists rush in; big business takes notice; and evangelists predict this will change how we work and live.
To paraphrase Yankee legend Yogi Berra, the hype around 802.11 technology, which promises an un-tethered world of lightening-fast Internet speeds, is sometimes "dij` vu all over again." But without a doubt, 802.11 is moving ahead at a blistering pace. In just a few years of existence, 16 million people used 802.11 in 2001, according to researcher Allied Business Intelligence. It estimates that number will grow to 60 million by 2006.
With the industry taking off, it has reached a crossroads. The gee-whiz early days of wireless local area networks (LANs) are now over, while the nettlesome issues of future standards, security, and business models remain. How the 802.11 community answers these questions is likely to decide whether 802.11 lives up to its billing.
(Click here to view the entire Special Report on 802.11.)
Setting the Standard
The 802.11 craze began with the popularity of 802.11b, now commonly known as Wi-Fi, which allows users to wirelessly extend their networks. Since it was approved in 1999, Wi-Fi networks popped up from Berkeley to Brooklyn.
"I have not found someone who's used it and says it's bad," says Gartner Group analyst Ken Delaney. "It's definitely the Wild West, but it's a fun Wild West."
802.11b chipsets use a modulation scheme known as Complementary Code Keying (CCK) -- a form of Direct Sequence Spread Spectrum (DSSS) -- to transmit data signals at 11 Mbps through an unlicensed portion of the spectrum at about 2.4Ghz, sharing the space with low-power signals from home electronics like cordless phones, microwaves, and garage-door openers. With an access point (AP) serving as a bridge to a wired LAN, Wi-Fi has a range of about 100 meters.
As evidenced by its user numbers, Wi-Fi has been a quick hit, but it left many thirsting for faster speeds. The Institute of Electrical and Electronics Engineers (IEEE) formed Task Group G to develop a new standard, with an eye to boosting data transmission while maintaining interoperability with 802.11b.
Meanwhile, 802.11b had company with 802.11a, a companion standard published in 1999. 802.11a uses Orthogonal Frequency Division Multiplexing (OFDM) modulation to provide data rates of up to 54 Mbps in the 5 GHz Unlicensed National Information Infrastructure band. This would quadruple the number of non-overlapping channels, from four to twelve, yielding less interference.
But 802.11a comes with some major downsides: the 5 GHz path, despite lowering interference, means more path loss, thanks to more radio frequency energy getting absorbed by walls, desks, even people. Also, 802.11a has a range of just 50 meters, half that of 802.11b, requiring more APs and using more power. Also, it only operates in North America, while 802.11b can operate in Europe and Asia.
802.11g's boosters claim it will be a boon to the industry, with 2.4 GHz that offers double the data rates of 802.11b (22 Mbps) and uses OFDM. Most importantly, it would be backward compatible with 802.11b. Also, higher data rates would be possible using two different modulation methods - 33 Mbps with Packet Binary Convolution Coding -DSSS, and 54 Mbps with Complimentary Code Keying-OFDM. The bonuses are many: higher data rates, backwards compatibility, and less path loss.
In November, Task Group G finally agreed to a set of standards for 802.11g. However, it is unlikely to be finalized until the end of this year at the earliest.
Despite the alphabet soup of modulations, many experts say there won't be much conflict between the two standards. Russ Craig, an analyst at the Aberdeen Group, says 802.11a offers a great opportunity in home-networking applications needing lots of bandwidth, like networked gaming grids and streaming video.
"The way the market is looking at this is 11b is going to be the market leader because of cost," says Navin Sabharwal, an analyst with Allied Business Intelligence. "Some product lines will migrate from 11b to 11g, others will migrate to the 11a."
And increasingly, the differences will blur, as more chipset makers roll out dual-band solutions, taking into account all standards. Just this week, chipset maker Intersil announced a dual-band chipset for 802.11a and 802.11g.
"These technologies are all going to converge into a single technology in a single chipset solution," says Dennis Eaton, an industry executive who is chairman of Wireless Ethernet Compatibility Alliance (WECA), an 802.11 trade group.
Securing the System
Dave Juitt, chief technology officer for BlueSocket, a wireless LAN security firm, recounts a scene from just off the onramp to Highway One in Silicon Valley. Bumper to bumper, rush-hour drivers would pull out laptops and hook into vulnerable wireless networks by using the default value for Cisco APs, "tsunami". No one was harmed, just some bored commuters checking their email, but Juitt says it is an important lesson in how open to attacks Wi-Fi can be.
Wireless LANs are encrypted through the Wired Equivalent Privacy (WEP) option, which most in the industry agrees is not very robust. Juitt calls WEP a "Band-Aid." Beginning with Jesse Walker's "Unsafe At Any Key Length" report in October 2000, various papers were published regarding WEP's shortcomings. Meanwhile, the practice of "war driving" for insecure wireless LANs received media attention.
However, not everyone agrees that the security situation is so dire.
"To some extent, there's been some scare-mongering out there," says Allied Business Intelligence's Sabharwal. "The reality is there's a lot of potential for mischief, but there haven't been a lot of instances."
IEEE is trying to remedy the problem with next-generation security standards. The IEEE's Task Group I is preparing three security enhancements, collectively known as Temporal Key Integrity Protocol (TKIP), as a short-term fix to WEP. WECA, which verifies product compatibility, would like TKIP to be available by the end of the year. In the long term, 802.11g is expected to include beefed-up security that is backwards compatible with 802.11b.
WECA's Eaton points out that the biggest problem is probably one of educating people that wireless communications are inherently less secure than wired. On top of that, Sabharawal says most enterprises running 802.11 networks would use a virtual private network (VPN) in any case, making them much more secure than just using WEP. One 802.11 aggregator, Boingo, for example, now offers VPN service for free to customers.
Rik Farrow, an independent security expert, says the threat to wireless LANs is not overblown at all "My bottom line is if someone wanted to do a directed attack against someone, finding a wireless network is wonderful," he says.
Life After MobileStar
Wi-Fi's popularity has democratic roots: community 802.11 groups, from NYCWireless to the Bay Area Wireless Users Group, showed its promise by setting up "hotspots" of publicly accessible wireless LANs across the country. Now, research group IDC estimates there are over 3,000 hotspots, a number forecasted to grow to 40,000 in 2006.
The most high-profile business trying to make money off the explosion of hotspots was Wi-Fi provider MobileStar Network, which inked a pact in January 2001 with Starbucks to bring 802.11 to the java-sipping masses.
Yet instead of becoming Wi-Fi's Amazon, MobileStar was destined to be its Kozmo. In October 2001, after running through $60 million in venture funding, the company filed for bankruptcy, leaving the nascent Wi-Fi industry with its own cautionary tale.
The reasons for MobileStar's demise, according to analysts, were not surprising: the company expanded too much, trying to be all things to all people. The remaining 802.11 service providers looked to develop niches, like WiFi Metro's urban hotzones, or to share the hefty start-up costs with hotels and airports, like WayPort.
In the end, however, the legacy of MobileStar might be what happened to it after bankruptcy. In November 2001, VoiceStream Wireless bought MobileStar's assets, giving the cellular carrier an instant foothold in the wireless LAN market, including over 500 Starbucks hotspots. In the aftermath of Deutsche Telekom's acquisition of VoiceStream, the MobileStar Wi-Fi network is part of T-Mobile.
The fate of MobileStar could augur a shift in cellular carriers approach to 802.11. Instead of viewing it as a threat to the billions the industry has spent on 3G, cellular companies might be changing their tune.
"Carriers have started realizing it's in their best interest to acquire or partner with these networks," says Allied Business Intelligence's Sabharwal. "They're worrying about cannibalization that doesn't exist."
Following up VoiceStream, Sprint PCs invested an undisclosed sum in EarthLink founder Sky Dayton's Wi-Fi play Boingo, which launched an aggregated national network of hotspots in January.
In Europe and Asia, cellular carriers have been more aggressive. Telia has dotted Sweden with hotspots, two carriers in South Korea announced plans for as many as 25,000 hotspots there by the end of the year, and Nokia will offer PC cards later this year to allow laptop users to move seamlessly between its cellular network and Wi-Fi.
Gartner's Delaney says carriers' entry is inevitable, since, despite their recent financial woes, they have the deep pockets necessary to pay the upfront costs to make 802.11 truly ubiquitous. "These [small] companies can't survive long term," he says, likening the fragmented public 802.11 market to the early days of ISPs.
"The biggest issue for the big carriers is the investment they have to make," Delaney says. "I think it will take three to four years before people will make money off this."
In the meantime, at least 20 companies have started making 802.11 chipsets. Despite sluggish tech spending and a disastrous telecom market, $1.45 billion of wireless LAN equipment was sold in 2001, up 34 percent from the previous year, according to IDC. The researcher estimates wireless LAN sales will reach $3.72 billion in 2006. Gartner Dataquest estimates the number of chipsets produced will quintuple by 2006, reaching over 45 million. The proliferation has also driven down prices, likely speeding mass adoption.
Businesses have embraced the technology, despite the widespread talk of security concerns. According to Gartner, more than half the companies it contacted had wireless LAN plans in the works.
And some analysts say the home-networking market will take off when consumer-electronics are brought into the mix. "The early market is connecting computers together," says Kurt Scherf, an analyst with Parks Associates. "The final frontier is multimedia and entertainment products in the home."
Even with the many strides 802.11 has made in the last three years, WECA's Eaton says its best days might lie ahead.
"We're very early in the development and adoption of the industry," he says. "We're seeing a significant ramp-up in Wi-Fi, but we think it's got a long ways to go yet."