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iPhone could drive citywide Wi-Fi

Wi-Fi enabled phones, like the iPhone, will drive demand for fast wireless broadband networks like the ones cities want to build using Wi-Fi, say experts.

SANTA CLARA, Calif.--Apple's iPhone and other Wi-Fi enabled handsets coming into the market could boost demand for citywide Wi-Fi networks, said experts Tuesday at the MuniWireless conference.

As cell phone operators push their 3G data services, new cell phones outfitted with Wi-Fi capability are also being introduced. Apple's iPhone was one of the first to reach the American market. And so far the phone has gotten rave reviews for Web surfing when it's on a Wi-Fi network. Conversely, critics have complained about the painfully slow surfing on AT&T's 2.5G cellular network. (The iPhone does not operate on a 3G wireless network, which is considerably faster than a 2.5G network.)

Bill Gurley, a general partner at the venture capital firm Benchmark Capital, told conference attendees that the Wi-Fi enabled iPhone, along with Research in Motion's newly announced Blackberry 8820 and other Wi-Fi enabled handsets will help drive the need for citywide Wi-Fi networks.

"The devices are coming," he said. "Most chip companies will soon be embedding Wi-Fi and 3G cellular capability into their chips, which will make just about every phone out there Wi-Fi capable."

Up until recently, most people using a citywide Wi-Fi network have done so using a Wi-Fi enabled laptop or PC. EarthLink built a whole business model on selling Wi-Fi broadband service as a replacement for DSL or cable modem service. The company also targeted some nomadic users, who would also typically connect to the networks using laptops. But this strategy has proved to be difficult, and EarthLink has greatly scaled back its citywide Wi-Fi plans.

But with Wi-Fi enabled cell phones users could benefit from true broadband mobile Web surfing, which would likely drive demand for the service.

Ken Biba, managing director at Novarum, a consulting firm that independently tests wireless broadband networks, said that in some cities the Wi-Fi networks are outperforming the carriers' 3G networks. For example, he noted the iPhone can connect at faster speeds over the Wi-Fi network in cities like St. Cloud, Fla., and Toronto much faster than other handsets can connect using a major carrier's 3G cellular network.

"In a city where Wi-Fi is deployed right, it can create a real paradigm shift," he said.

And with 1.39 million iPhones already in the market, according to Apple, demand will likely continue to grow.

Karl Garcia, a technical staff member at Google who is helping run the citywide Wi-Fi network deployed by Google in Mountain View, Calif., said that there are roughly 850 iPhones connecting to the city's free Wi-Fi network every day.

T-Mobile USA, the smallest of the four major operators, is already leveraging Wi-Fi, and could also be tied to citywide efforts. This summer it launched a service that allows people to switch between Wi-Fi and cellular.