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Chrysler is turning cars and trucks into wireless hot spots.

The company announced Thursday a new feature that will let people purchase a "Uconnect" in-car wireless system as part of a dealer upgrade in 20 various 2009 Chrysler, Dodge, and Jeep models.

The system offers Wi-Fi and Bluetooth connectivity within the car to allow people to sync their cell phone address books with the car's 30GB hard drive or control their Apple iPods using the radio and steering wheel controls. And it provides navigation and real-time traffic features that can be controlled by voice recognition or a touch screen.

Using a cell phone network, the Wi-Fi hot spot can also be connected to the Internet, allowing passengers using laptops to surf the Web. My guess is that other Wi-Fi enabled devices, such as the iPhone and iPod Touch will also be able to use the in-car Wi-Fi to connect to the Net.

Chrysler didn't mention which cell phone network will be used to provide the Internet access. And it didn't list prices for the service, which will likely charge a monthly fee, according to an Associated Press article.

But pricing could be comparable to what is charged for the OnStar navigation and emergency roadside service. That costs between $17 and $70 per month. Or it could be priced similarly to satellite radio, which costs just under $13 per month.

Using Wi-Fi as the Internet access technology inside the car is a good idea, since almost every consumer electronic device these days has a Wi-Fi chip embedded. Wi-Fi is also shipped as a standard feature in most, if not, all laptops today. By contrast, the market for pre-installed 3G wireless in laptops has been relatively small.

I saw a similar in-car wireless system work with WiMax as part of an Intel/Motorola sponsored demonstration at CTIA in Las Vegas earlier this year. The purpose of the demo was to show how well WiMax works, but it used Wi-Fi inside the car to connect laptops and other Wi-Fi-enabled devices to the Net using WiMax.

I have to admit, turning the car into a hot spot was pretty cool. I was able to access Web sites and listen to the Web rebroadcast of National Public Radio's "Morning Edition." It was also easy to access Google Maps on the Web for navigation. And in this particular demo they showed how video could be streamed to watch movies on demand. Of course, Chrysler's system uses the 3G cell network instead of a high-speed WiMax network, so streaming audio and video won't likely work well. But it's still a very cool feature.

That said, I think price will be a major factor in whether the new feature and service are a success. As gas surpasses $4 a gallon in much of the country and the economy hits the skids, car sales are already in a slump. And if current trends continue, consumers will likely be more interested in getting better gas mileage than a potentially pricey in-car Wi-Fi system with Internet service that charges a monthly fee.

Anticipated wireless coverage areas in Beijing. If they work, they are advertised to be free until after the Olympics.

(Credit: Wicity via Sina)

Beijing Wicity is setting out to cover several key parts of Beijing with Wi-Fi access, and it is supposed to be free until after the Olympics, which will take place August 8-28, but service is spotty in advertised coverage areas.

Danwei reports that Wicity, not to be confused with WiiCity (which doesn't exist, but would be a pretty fun place), is a project of Chinacomm (中电华通). Wednesday is the first day of the test stage.

People in an office in Beijing's Central Business District, or CBD, report that they see the network but cannot get online. I'm sitting in a cafe in Sanlitun, and I don't see the network on either my MacBook or my HTC Touch.

A group of investors has agreed to take over Philadelphia's Wi-Fi network, just as EarthLink was set to pull the plug on the network.

The group of investors, which announced their plans Tuesday, includes Boathouse Communications Partners, a private equity firm based in Philadelphia, technology entrepreneur Richard Rasansky and former Philadelphia mayoral candidate Tom Knox.

Terms of the deal were not disclosed, but the group plans to change the business model. Instead of charging $20 a month for network access, the group will offer free Wi-Fi based on advertisements, according to a story in the Wall Street Journal.

The group also plans to expand the coverage of the network, which is about 80 percent built. EarthLink spent about $17 million to build the network.

The citywide Wi-Fi project in Philadelphia was the largest such network in the country. And at one time it served as the poster child for EarthLink's ambitions to build and own its own wireless infrastructure. It also served as a model to other cities that wanted to partner with private industry to help bridge the digital divide through low-cost wireless technology.

But when EarthLink came under new management last year after the death of its CEO Garry Betty, the company quickly began unwinding many of its Wi-Fi contracts. It eventually pulled out of deals it already had with several cities including San Francisco, Houston, and New Orleans.

Earlier this year, the company officially said it was putting its Wi-Fi business up for sale. And last month, it announced that it was shutting down the Philadelphia network after it was unable to find anyone who wanted to take over the network. Service was supposed to be shut off last week.

But even though the Philadelphia wireless venture has now been saved, the new investors have a long road ahead of them. Several low-cost and ad-supported Wi-Fi networks have failed. Service providers have found that the model just doesn't generate enough revenue to sustain the network.

MetroFi, which built its business around free Wi-Fi supported by advertising, said last month that it was putting its networks up for sale. The company operates service in several cities including Mountain View, Calif., San Jose, Calif., and Portland, Ore.

Local investors have rescued Philadelphia's citywide Wi-Fi network.

Former Verizon executive Mark Rupp is part of an effort to complete and improve the $17 million project that was built but abandoned last week by EarthLink, according to a report Tuesday in the Philadelphia Inquirer. Philadelphia Mayor Michael Nutter said during a news conference Tuesday that no public funds would be used to complete or operate the project, although no further financial details were released.

The group plans to create an ad-supported service that would be free to residents, but businesses would be charged, according to the investment group.

EarthLink, which had filed a proceeding in federal court to start removing Wi-Fi radios from city streetlights and cap its potential liability at $1 million, reportedly welcomed the announcement and said it would work with the new owners on a smooth transition.

EarthLink announced on June 10 that it was abandoning the project after being unable to find a buyer for the network, which has been 80 percent completed. It also claimed that after months of negotiations with the city and a nonprofit group interested in running the network, it was unable to close the deal.

EarthLink, which won the contract in 2006 to build what was at the time to be the largest citywide Wi-Fi deployment in the nation, said earlier this year that it's getting out of the Wi-Fi business.

After the death of EarthLink CEO Garry Betty in early 2007, the company began wiggling out of several contracts with cities such as San Francisco and Houston. Early this year it announced it was abandoning the business altogether, and it started negotiating with five cities in which networks had already been built or partially built.

U.S. cell phone operators are starting to embrace Wi-Fi in order to extend the reach of their high-speed wireless networks without breaking the bank, but some are being more cautious than others.

T-Mobile USA was the first major U.S. wireless carrier to see the merits of using Wi-Fi. Last year, the German-owned phone company, which is the fourth largest mobile operator in the U.S., launched its Hotspot @Home service that automatically switches between subscribers' home Wi-Fi networks and its cellular network. For $10 more a month, subscribers are able to talk as much as they like while on the Wi-Fi network.

Now it looks like other carriers are jumping on the Wi-Fi bandwagon. But operators, such as AT&T, are hesitating when it comes to offering Wi-Fi services for handsets. Recently AT&T, the largest mobile operator in the U.S., said it would allow its broadband subscribers and 3G, or third-generation, laptop data users to have free access to its 17,000 Wi-Fi hot spots around the country. The company also has launched a promotion with Starbucks coffee shops to give users two hours of free Wi-Fi access with the purchase of a Starbucks reward card.

AT&T primarily sees Wi-Fi as a way to fill in coverage gaps for its 3G wireless data service.

"Wi-Fi offers us a way to provide high-speed access in an area where we don't have 3G, like in a rural setting," said Mike Woodward, vice president of business mobility for AT&T. "There might be a coffee shop or some other hot spot in that area that offers our Wi-Fi service, and customers can connect that way."

But AT&T hasn't yet opened the free access to its mobile phone customers. Not even users of the iPhone--which has built-in Wi-Fi but doesn't yet allow the download of voice over IP clients like Skype--can get access to the Wi-Fi hot spots for free. What's more, AT&T seems cagey about putting any of its voice traffic over a Wi-Fi network.

"What we're offering today is about connecting laptop computers to a high-speed wireless network," Woodward added. "Right now, we don't do seamless hand-off from one network to another. And I have a hard time envisioning where that might happen."

Indeed, for Wi-Fi to be truly useful on mobile devices like handsets a seamless hand-off between the cellular and Wi-Fi networks is necessary. But carriers like AT&T do hand-offs between cellular technologies all the time. When AT&T subscribers travel between its 2.5G EDGE network and the 3G HSPA network, the device switches from one network to another and callers on either end have no idea.

Switching among networks
The same thing needs to happen between Wi-Fi networks and cellular networks. And while the technology for this hand-off is somewhat more complicated between Wi-Fi and cellular than it is between two cellular technologies, it already exists. T-Mobile uses a technology called UMA (Unlicensed Mobile Access), which detects when one signal fades and another comes into range.

Joe Sims, vice president and general manager of T-Mobile USA's Broadband and New Business Division, claims the hand-off between the two networks works very well.

"It's seamless," he said. "You can't tell that the call is switching from one network to another."

Cisco Systems also recently introduced a network-based hand-off technology that it's selling to its corporate customers. The software, which runs on its new mobility appliance, keeps track of devices and phones on the network. When it detects a device is leaving the Wi-Fi network , it automatically switches the connection to the cellular network and vice versa.

Even though the technology has been developed for large companies, Pat Calhoun, CTO for Cisco's wireless networking business, said carriers could eventually adapt the technology for use on their own networks.

Once seamless hand-offs between Wi-Fi and cellular are mastered, there are essentially no technical barriers that would keep a cell phone operator from using Wi-Fi technology. And, in fact, carriers could reap many benefits from using Wi-Fi to offload voice traffic, especially as the price for voice minutes continues to decline.

Better coverage, less cost
For one, Wi-Fi is an inexpensive way to improve in-home coverage. And as carriers migrate to 3G services, it's likely to get harder for them to provide in-home coverage because 3G service operates at higher frequencies, which don't penetrate walls as well. So if customers weren't getting good cell phone reception in their homes or offices with current cellular technology, the situation won't be much improved with 3G. But Wi-Fi could help because it allows operators to leverage a high-speed wireless network that already exists in consumers' homes to achieve full, "five bar" coverage.

What's more, because Wi-Fi mobile services are delivered over a consumer's own broadband connection, it reduces the transport cost that the carrier has to pay to get the traffic from the cell tower to its wired backbone network. Some experts say that Wi-Fi can actually help reduce this so-called backhaul expense by a factor of about 10.

And finally, Wi-Fi allows cellular operators to compete more aggressively on price. If the voice traffic is carried over a low-cost IP network instead of over a more costly cellular network, they can offer more aggressive prices and still make decent profit margins.

So why aren't more mobile operators jumping on the Wi-Fi bandwagon? The reason is simple: They're scared. Specifically, they are worried about cannibalizing their existing voice services and making their networks so open that subscribers can bypass their own services and applications completely.

When asked if its Hotspot @Home users could use a mobile version of Skype, T-Mobile's Sims said they could, but he added, "We're not necessarily going to advertise that."

This is a legitimate concern. Phone companies have already seen the same scenario play out on the broadband side of their businesses. Today, broadband providers compete on speeds and feeds. They have tried offering Web portals and content directly to consumers, but the reality is that consumers can bypass their traditional phone service with services like Skype or Vonage. And they can get content directly from the likes of Google or YouTube. Essentially, the broadband providers have been reduced to dumb pipe providers.

And their biggest fear is that the same thing will happen in their mobile businesses. Still, dual mode wireless devices are coming whether cell phone operators like it or not. In-Stat forecasts that the global supply of dual mode voice and data Wi-Fi handsets will increase by nearly 360 percent this year.

Popular devices such as Research In Motion's BlackBerry and Apple's iPhone already have Wi-Fi built in. Still some carriers, such as Verizon Wireless, say they don't need Wi-Fi. Instead, Verizon is focused on deploying a faster 4G wireless network. But in the meantime, there are already millions of Wi-Fi hot spots throughout the country, and with or without their mobile carrier, consumers will soon figure out ways to use them.

T-Mobile USA is suing Starbucks, accusing the coffee behemoth of a breach of contract by allowing AT&T to provide customers with free Wi-Fi access in its cafes.

In a complaint filed Thursday in New York State Supreme Court in Manhattan, T-Mobile says Starbucks "secretly" developed a plan with AT&T to provide Wi-Fi at its cafes, despite an exclusive partnership with T-Mobile. T-Mobile, which is seeking unspecified damages, alleges the companies broke an agreement over how Starbucks should transition the service from T-Mobile to AT&T, according to Reuters.

T-Mobile said that, under the agreement, it had the exclusive right to "sell, market, and promote" its services in Starbucks up until the stores were completely transitioned to AT&T's system, according to the lawsuit. T-Mobile says it is currently bearing the brunt of the cost of the service because it is providing the technology and equipment in all but two of Starbucks' U.S. markets--the San Antonio, Texas, and Bakersfield, Calif., markets.

In February, Starbucks ended its seven-year partnership with T-Mobile in favor of an agreement with AT&T. Under the old partnership with T-Mobile, customers would sign up for Wi-Fi for hourly and daily rates.

Under the new partnership, Starbucks in June began offering two hours of free Wi-Fi Internet service via AT&T to customers who purchase a Starbucks Reward Card with a minimum $5 credit on it. To keep the card active, customers must use their Starbucks Card at least once a month. New members of the service also get a voucher for a free drink.

JetBlue passengers, rejoice. Now there is yet another way to pass the time during flights. JetBlue's free in-flight Wi-Fi will no longer require Yahoo or BlackBerry accounts to check e-mail and chat with friends.

Starting Wednesday, JetBlue's plane equipped with in-flight Wi-Fi will let users with Gmail, AOL, Hotmail, and Windows Live Mail addresses check their e-mail while onboard. It also will offer Microsoft Exchange so travelers can communicate with their office on the ground. No Web surfing is available, but thanks to a deal with Amazon, passengers on the so-called BetaBlue plane can log on to the mobile version of Amazon.com's site and shop.

The BetaBlue plane, which often flies transcontinental routes, has been equipped with Wi-Fi since December. Several other airlines, including Southwest, American Airlines and Virgin, have plans to connect to the Web in the near future.

AT&T's free Wi-Fi access for Starbucks coffee shops is finally here.

Starbucks on 29th Street and Park Aveneue in New York City.

(Credit: Marguerite Reardon/CNET Networks)

Starting Tuesday, Starbucks coffee shops across the country are offering two hours of free Wi-Fi Internet service through AT&T. In order to get the free service, customers must buy a Starbucks Reward Card with a minimum of $5 credit on it. Customers also must sign up for the free Wi-Fi online at Starbucks.com. To keep the card active, customers must also use their Starbucks Card at least once a month.

The free service is only for two hours and must be used in a single session. New members will also get a voucher for a free drink.

The free AT&T Wi-Fi offer comes as Starbucks phases out a seven-year relationship with T-Mobile, which had provided its customers Wi-Fi under hourly and daily rates. While existing T-Mobile account holders will still be able to sign on and use the T-Mobile service, AT&T has officially taken over all of Starbucks' hot spots.

Free Wi-Fi in Starbucks is part of AT&T's broader effort to give customers more choices using Wi-Fi. The company is also enabling its broadband and wireless data users to get free Wi-Fi at any of AT&T's 17,000 hot spots around the country. Under this program, subscribers aren't limited to the amount of time they can access a hot spot. These AT&T broadband and wireless data subscribers can also use their existing AT&T account information in the Starbucks hot spots. But unlike non-AT&T customers, they don't need to purchase a Starbucks Rewards Card and there is no time limit.

"Our philosophy is that we want broadband to be on demand," said Mike Woodward, vice president of business mobility for AT&T. "People don't think that they want to connect to the network using DSL or 3G cellular or Wi-Fi. And now we've lined up our assets to deliver all these various flavors of broadband."

The free service is part of Starbucks Reward card program, which started in April. Under this program, members can get free syrup and milk options with drinks as well as free refills of hot and iced brewed coffees. They can also get a free drink when they buy a pound of coffee beans. And now they'll be getting two hours of free Wi-Fi Internet connectivity courtesy of AT&T.

Adding free Wi-Fi to the mix is supposed to help lure customers, who may be forgoing their tall lattes in an effort to save money. While the idea is certainly a nice one, it seems like Starbucks and AT&T haven't done a great job promoting it.

I went to the Starbucks right around the corner from the CNET office on 29th Street and Park Avenue in Manhattan on Tuesday expecting to see a packed house of free Internet users. But instead, the patrons I spoke to sipping coffee and tapping away on their laptops weren't even aware that they could get free Wi-Fi.

Laptop users at Starbucks in New York City.

(Credit: Marguerite Reardon/CNET Networks)

Even the Starbucks employees didn't know or understand the ins and outs of the new program. When I asked how I could get online, the Starbucks employee who was helping me said she thought I could just sign up for the free service on the Starbucks Web site from a connection at my home or office. She wasn't aware that I needed a Starbucks Reward Card. And she was unaware of the two-hour time limit on the free service. Still, as an employee who was given access to the service with no strings attached, she said she is excited to have free Internet access. Previously, Starbucks employees were only offered discounted T-Mobile access.

"The discounted service just wasn't worth it to me," she said. "And it certainly is about time that we offered free Wi-Fi. Every other cafe and coffee shop around here seems to offer complimentary Internet."

A start-up called Ozmo Devices is taking on the popular short-range wireless technology Bluetooth with a new flavor of Wi-Fi.

On Monday, the Bay Area start-up, which has raised $12.5 million since 2005, officially introduced a new low-powered Wi-Fi chip and software that will allow device makers to connect accessories like headsets, computer mice, speakers, and keyboards to laptops, mobile phones, and other consumer electronics using Wi-Fi.

For laptop and device manufacturers, using Ozmo's software means not having to include a separate Bluetooth radio in these devices to connect peripherals. With the Ozmo software installed on their devices, these manufacturers can simply use the Wi-Fi chips that already exist in laptops, gaming consoles, mobile handsets, and other devices.

(Credit: Ozmo Devices)

Wi-Fi is already integrated into almost every laptop that hits the market today. And as more mobile handsets such as Apple's iPhone and music devices like Microsoft's Zune come with embedded Wi-Fi, the market for Wi-Fi is growing. It's these mobile devices that Ozmo executives believe offer the biggest opportunity for their company. Unlike Bluetooth, which only provides short-range connectivity between peripherals and devices, Wi-Fi is used primarily to provide Internet connectivity.

"Manufacturers are putting Wi-Fi in devices because they want their devices to connect to the Internet," said Roel Peeters, co-founder and vice president of marketing and business development for Ozmo. "And now we're giving them the ability to use that same technology to also connect to low-powered peripherals, like headsets and speakers, as an added bonus."

In order for the Ozmo technology to work, device makers will have to embed Ozmo's software. And peripheral makers will have to integrate the Ozmo chip, which includes a subset of the Wi-Fi standard, into their devices. While it will certainly take time to seed the market with its technology, the small start-up is already off to a good start. Intel, the world's largest producer of Wi-Fi chips, has invested in Ozmo through its Intel Capital venture capital arm, and it plans to include the Ozmo software in its Centrino notebooks later this year. Intel has said the new technology will allow a single radio on a laptop to connect to the Internet while also connecting up to eight different peripheral devices.

While Ozmo executives claim there is enough opportunity for Wi-Fi and Bluetooth to co-exist, the fact is that the Ozmo technology is essentially a replacement for Bluetooth.

"We don't have to displace Bluetooth for us to be successful," Peeters said. "But we think of Bluetooth as a legacy technology. Ultimately, consumers will choose which experience they prefer. But I think we have strong differentiators."

For example, Peeters explained that Ozmo's technology offers faster data transfers and better battery life on the actual peripherals, such as headsets, than Bluetooth offers. And because security is already built into Wi-Fi standards such as 802.11n, Ozmo's Wi-Fi technology is also more secure than Bluetooth, Peeters said.

While it's unlikely that Bluetooth will disappear overnight, Wi-Fi will certainly give the technology a run for its money, especially if the performance and cost benefits live up to Ozmo's claims.