Tech giants huddle on wireless union

Intel, IBM, AT&T Wireless, Verizon Communications and Cingular Wireless are discussing the creation of a company that would build a network of wireless hot spots across the country, according to industry sources familiar with the efforts.

The New York Times first reported the initiative Tuesday, saying it was led by Intel and was dubbed "Project Rainbow." Three sources said Tuesday that the project seeks to create a new network of hot spots, which are publicly available wireless networks that use the 802.11b standard, also known as Wi-Fi, to deliver Internet access.

Hot spots create a 300-foot zone where computers, printers or other devices can exchange files without being linked by wires. Hot spots are areas like cafes or train stations, where the networks are available for anyone to use. Some hot spots are free to use; others cost a fee.

Project Rainbow is the latest of a series of efforts begun in the last year to create a nationwide Wi-Fi network. There are now a handful of companies that sell monthly subscriptions to access to hundreds of different hot spots at a time. A growing number of free public networks, created by those who don't mind sharing their DSL (digital subscriber line) or cable modem connection with others free of charge, are also looking at ways to merge. But cable companies have recently begun an effort to crackdown on such efforts.

Equipment makers have also joined the fray. For example, 3Com has unleashed a way of using a high-powered wireless transmission to "bridge" together Wi-Fi networks in up to 15 different buildings at a time. Most recently, Toshiba and Hewlett-Packard launched bundled products that allow corporate customers and small businesses to build wireless hot spots around the country.

Toshiba has said it wants to increase the number of wireless hot spots--areas such as New York's Bryant Park and Starbucks throughout the country with wireless networks--from about 1,200 now to at least 10,000 by the end of the year.

Over the rainbow?
Companies said to be involved in the project all declined comment, but several industry sources say Project Rainbow is at a very early stage of development and its future remains, for now, unsure.

If the discussions bear fruit, the resulting company would build hot spots in public areas such as airports. People would be able to subscribe to the wireless services on the fly, accessing e-mail or the Web while passing through those hot spots. Typically, hot spots charge people by the hour or day.

Hot spots are "something everyone is thinking about as an additional revenue stream," IDC analyst Alan Promisel said. "Now consumers are getting wireless (capability) in their notebooks, so there's a much broader population (that companies) could tap in to."

Sources said the effort might include enlisting companies such as Boingo Wireless and Joltage Networks, which sell subscriptions to hot spots.

Joltage spokesman Michael Chaplo would not confirm if the project is underway. But he said companies like Joltage could be a natural addition to any effort to create a national Wi-Fi network. Joltage has already built the same kind of wireless Internet backbone that Project Rainbow is seeking to build.

"Joltage is really a key element for anyone looking to get in (wireless hot spots)," Chaplo said. "Everybody is going to get into this space. The real question will be build or buy."

The project also seeks to enlist wireless carriers like AT&T Wireless and Cingular Wireless, sources said. Nearly every wireless carrier is looking to add Wi-Fi into their collection of products. But so far, VoiceStream Wireless is the only one to jump into the game, selling Wi-Fi service inside about 600 Starbucks locations.

AT&T Wireless declined comment on whether it is part of Project Rainbow.

"We think that Wi-Fi is a good complementary technology and we are looking at integrating it," said an AT&T Wireless representative. "But we're exploring a variety of ways to integrate this stuff."