iPhone and Wi-Fi: the way to 4G?

Vendors have been talking long and hard about a mythical land where mobile phones automatically switch between mobile and terrestrially-linked wireless networks, depending on what's available at the time. Like so many dreams in the wireless world, this particular vision of 4G mobile services has been largely a pipe dream: until now.

(Credit: CNET.com)

I refer, of course, to the decision by South Australian ISP Internode, more usually in the news for CEO Simon Hackett's unbridled negativity against Telstra, to set up its Wi-Fi network so that iPhone users can automatically log onto its hotspots whenever they're in range. For free.

The implications of this are enormous: rather than constantly worrying about their 3G data allocation, users within range of Wi-Fi hotspots can download music and movies without fear of blowing their data budget (well, usually: reports suggest the iPhone could be a little better at automatically switching to Wi-Fi). MobileMe, assuming it's actually working, is just a button-press away, as is Web surfing, iTunes downloading and the like.

Now, before you hit the comment button and tell me what an unobservant and easily impressed person I am, two things. First, I am aware that Internode is SA-based and that if you are in other states, and not at their capital cities' airports, this network is about as much use to you as a knife in an ice cream factory.

Second, I am aware that both Telstra and Optus have included free access to their respective Wi-Fi hotspots as part of their iPhone plans.

(You knew that, right? Because when Optus first announced its plans, it was buried in the fine print way down at the bottom where they tell you just how much the phone is actually going to cost; I note that now, the iPhone 3G launch site is down and Wi-Fi has been promoted to get a mention on plan sites such as this one.)

I've always found public Wi-Fi to be one of those great ideas that just hasn't captured the critical mass it deserves, like the Segway or world peace, and have said so before as one ever-optimistic government body after another promised free Wi-Fi but delivered squat.

But this idea of bundling Wi-Fi with smartphones makes very good sense, and to have Internode come out explicitly supporting a single model of phone, even if it is only because Hackett is a rabid iPhone fan, opens up some very interesting possibilities.

The interesting thing about Internode's decision is that, unlike Telstra and Optus, it doesn't actually sell the iPhone, or any phone. So while those two carriers have big Wi-Fi networks just crying out for users, Internode actually has no incentive to provide free access to its Wi-Fi networks for any reason at all, apart from genuine love, and maybe the joy of finding a new way to flip Telstra the bird.

With a compelling Wi-Fi story, Internode could very well start reselling the iPhone itself — doing a Virgin Mobile and contracting a virtual mobile service from one of the 3G operators' networks, then bundling it with Wi-Fi access to create a pretty compelling offering for its quite sizeable customer base. The appeal of this would be even bigger if one of the ISPs could figure out a way to sneak their Voice over IP tool onto the iPhone.

Could Internode become the next telecoms provider to offer the iPhone? I asked Hackett and he gave me a big, fat, totally convincing "maybe". "It's certainly something we've been considering," he said, "and the hotspot network (and its expansion) are clearly compatible with that possible future path."

Simon Hackett
(Credit: Internode)

The iPhone, of course, isn't the only smartphone that supports Wi-Fi — but it does seem to be the first that convincingly switches between 3G and Wi-Fi (please correct me below if I'm wrong and you do this all the time) in something resembling the vision everyone sells for the future.

Vendors like to talk to business people about using Wi-Fi in the office and 3G on the road, but Internode's vision is that Wi-Fi will be more relevant on the street. "Usage is (by design) a function of mobile users moving in and out of those hotspot zones as they go about their work (or play)," says Hackett. "It's not a full-time internet access service for customers."

Cities have tried offering free Wi-Fi and failed. Enthusiastic entrepreneurs have started companies like Azure Wireless to blanket the earth with Wi-Fi and not so much failed, as refined its business model (and narrowed the scope of its network) significantly.

Pie-in-the-sky rich dudes with lots of imagination, and cash to fuel it, are arming the proletariat with the ability to take prepaid access cards and trying to blanket the suburbs with Wi-Fi, one sucker at a time.

But this thing Internode (and Telstra and Optus) is doing, could this be an actual real future for Wi-Fi — as a complement to 3G that gets people to stop being so uptight about their data allowances? (And yes, I know there is still a small core of people that regularly frequent Wi-Fi services.)

There is, of course, a major issue of geography — a customer of one telco could hardly expect to seamlessly roam onto another telco's Wi-Fi network. Yet, with the right peering agreements, it could: after all, it doesn't take too much thinking to remember a time when mobile phones couldn't deliver SMSes to phones on other networks, or when you couldn't withdraw money at an ATM owned by another bank.

Why not do the same with Wi-Fi — produce a federated, terrestrial backup network that encourages people to do cool things with their smartphones on 3G, and to do really amazing things with their smartphones when they're within Wi-Fi range — like actually watching mobile TV without constant jerkiness and rebuffering.

Who knows? If they can make this work, maybe other previously impossible things will look more achievable. Even world peace.