Telecom Regulatory Authority Technical Affairs & Technology Sector WiFi Technology

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2 Telecom Regulatory Authority Technical Affairs & Technology Sector WiFi Technology Technology Tracking Department July, 2003

3 WiFi Technology 1 Preface Wireless communication is becoming the standard in the business world. Remote wireless Internet connections and wireless computer networks are appearing on the scene and will dramatically impact the way business does in the future. It has truly become a wireless world. In the past five years, Wi-Fi (also known as b, g and a ) has emerged as the dominant standard for wireless LANs (WLANS) worldwide. Anyone can set up a Wi-Fi network and cover an area of typically feet with Internet access hundreds of times faster than a modem connection. It has become the TCP/IP of wireless, a single networking standard for all developers, equipment manufacturers, service providers and users. As with TCP/IP, any innovation in Wi-Fi benefits everyone else in the Wi-Fi community. This study aims to give an overview over WLANs from different point of views. For example, Part-1 handles the technical aspects of WLANs, including its network topology, radio topology, brief explanation of the IEEE standards and securing the WLAN, that s plus comparing WiFi with other technologies, for example 3G and Bluetooth. Part-2 discusses WiFi as a Market/Business model. This part presents some case studies for existing models that are already used in USA and Europe. This part must be taken into consideration, when establishing a well-defined WiFi market in Egypt. Part-3 discusses the regulatory aspects of WiFi. This part takes an overlook over the regulators of the advanced countries and how they deal with introducing WiFi to the market.

4 WiFi Technology 2 Index A- Part 1. Technical aspects of WLANs 1.1. Introduction Wi-Fi Network Topology Network Components Designing the WLAN Layout WLAN Network Implementation Consideration 1.3. Wi-Fi Radio Topology IEEE PHY Layer IEEE MAC Layer IEEE Network Layer 1.4. IEEE standards Wi-Fi Security Wi-Fi Vs Other technologies WiFi and Bluetooth WiFi and 3G B- Part 2. Marketing Study for WLANs Roadmap for WiFi Business Model for WiFi C- Part 3. Regulatory aspects of WLANs

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6 WiFi Technology Introduction. The Market for wireless communication has grown rapidly since the introduction of b wireless local area networking (WLAN) standards, which offer performance more nearly comparable to that of Ethernet. WLAN (or WiFi) was created specifically to operate as a wireless Ethernet. It is an open-standard technology that enables wireless connectivity between equipments and local area networks. Public access WLAN services are designed to deliver LAN services over short distances, typically 50 to 150 meters. In these cases, WLANs are connected to a local database, and give the end user access through a kiosk or portable device. Internet access through public WLANs is a new and very hot trend, providing many benefits and conveniences over other types of mobile Internet access. First, performance is 50 to 200 times faster than dial-up Internet connections or cellular data access. Second, users do not have to worry about cords, wires or sharing an access point, such as a phone jack. A global directory that would provide users with a search engine to locate the closest access point. Even without the directory, WLAN devices make it very easy to connect. Most WLAN- enabled devices have a software utility that indicates a user s proximity to a WLAN access point. Service providers place an antenna, or access point, at a designated hot spot. The antenna transmits a wireless signal to the adapter card in a user s computer or device. Users connect to the WLAN through a page in their Internet browser. Coverage extends over a 50 to 150 meter radius of the access point. Connection speeds range from 1.6 Mbps, which is comparable to fixed DSL transmission speed, to 11 Mbps. New standards promise to increase speeds to 54 Mbps. Today s WLANs run in the unlicensed 2.4 GHz and 5 GHz radio spectrums. The 2.4 GHz frequency is already crowded it has been allocated for several purposes besides WLAN service. The 5 GHz spectrum is a much larger bandwidth, providing higher speeds, greater reliability, and better throughput. Note that the terminology WLAN and WiFi are used interchangeably through out the document. Wi-Fi devices The cost of Wi-Fi components is dropping rapidly. Wi-Fi radio chips which cost around $100 in 2000 now cost only $15, and fierce competition amongst commodity radio manufacturers promises to push this price even lower. A future with ubiquitous Wi-Fi networks in homes, offices and in public spaces will be filled with all kinds of Wi-Fi enabled devices: Laptops According to market research firm In-Stat, 5.7% of all notebooks were shipped with built-in Wi-Fi radios in 2002, and this share will rapidly grow to 35% in 2003, and to 90% by This coming only a few years after Wi-Fi became a

7 WiFi Technology 5 widely-adopted standard, whereas it took at least ten years for modems and wired ethernet ports to appear as standard equipment on laptops. PDAs -- HP and Toshiba have already introduced PocketPC devices with Wi-Fi built in, and many more Wi-Fi-embedded PDA devices are coming. Cell phones -- Imagine a cell phone with a low cost Wi-Fi radio that could opportunistically connect to Wi-Fi hot spots, taking traffic off of overloaded (and expensive) cellular networks, and sucking in broadband content like streaming video. A more power-efficient Wi-Fi radio is necessary for cell phones with small batteries. Automobiles -- New cars are already packed with data-hungry devices that could make use of Wi-Fi. Soon you will pull into any service station (in the coming years, they will all be hot spots) and top up on your data along with your gas. Download MP3 s, update your navigation system with the latest traffic data, download the day s Wall Street Journal audio edition to listen to on the way to work. When you pull into your garage, your car will dock with your home Wi-Fi network. It could also upload data about itself to your dealer or your insurance company. Gameboys -- Gaming devices will connect to private and public Wi-Fi networks and become a platform for multi-player games. Again, a lowcost add-on to existing products. Consumer electronics devices -- Once super-cheap low-power Wi-Fi chips are available, it isn t a stretch to see them added to all manner of consumer electronics devices. Anything that could benefit from the ability to send and receive information, such as MP3 players (download music in any hot spot) and digital cameras (upload pictures right after you take them wherever you are).

8 WiFi Technology WiFi Network Topology A basic topology of an networks in its simplest form consists of two or more wireless nodes, or stations (STAs), which have recognized each other and have established communications. There are two different cases : Independent Basic service set(ibss) Within an IBSS, STAs with each other on a peer-to-peer level. This type of networks is often formed on a temporary basis, and is commonly referred to as an ad hoc networks. Ad hoc networks allow for flexible and cost-effective arrangements in a variety of work environments, including hard-to-wire locations and temporary setups such as group of laptops in a conference room. The Extended Service Set (ESS) consists of a series of BSSs (each containing an AP) connected together by means of a Distribution System (DS). Although the DS could be any type of network (including a wireless network), it is almost invariably an Ethernet LAN. Within an ESS, STAs can roam from one BSS to another and communicate with any mobile or fixed client in a manner which is completely transparent in the protocol stack above the MAC sublayer. The ESS enables coverage to extend well beyond the range of a WLAN radio. By using an ESS, seamless campus-wide coverage is possible. This service is commonly referred to as infrastructure mode.

9 WiFi Technology 7 Network Components An LAN is based on a cellular architecture where the system is subdivided into cells, where each cell (called Basic Service Set or BSS) is controlled by a Base Station (called Access Point or AP). There are three main links in the WLAN chain that form the basis of the network: Access Point: An AP operates within a specific frequency spectrum and uses an standard specified modulation technique. It also informs the wireless clients of its availability and authenticates and associates wireless clients to the wireless network. An AP also coordinates the wireless clients' use of wired resources. The access points generally have two main tasks: o They acts as a base station to the users. o They acts as a bridge between wireless and wired networks. It s a Physical/Data Link Layer device, it supports 1, 2, 5.5, or 11 Mbps connectivity depending on standard implemented. The coverage area of AP can be up to 375 ft.(114 m.). The number of users an AP supports varies but is generally users. A single access point should also be placed as close as possible to the center of the planned coverage area. If it s necessary to install the access point in an obstructed, for security purposes, an optional range extender antenna can usually be mounted to extend the range of the coverage area. Extender Antenna

10 WiFi Technology 8 Network interface card (NIC)/client adapter: A PC or workstation uses a wireless NIC to connect to the wireless network. The NIC scans the available frequency spectrum for connectivity and associates it to an access point or another wireless client. The NIC is coupled to the PC/workstation operating system using a software driver. Wireless NICs do same function as standard NICs : - change data from parallel to serial. - framing & make packets ready for sending. - determine the time to send or receive it. - transmitting & receiving. Bridge: Wireless bridges are used to connect multiple LANs (both wired and wireless) at the Media Access Control (MAC) layer level. It s used in building-tobuilding wireless connections, wireless bridges can cover longer distances than AP s The coverage range can be up to 25 miles(40 Km).

11 WiFi Technology 9 Designing the WLAN Layout: WLANs can be implemented in a number of ways, depending upon the complexity desired. Generally, WLANs are thought of in three ways: 1) Peer-To-Peer A peer-to-peer network is a WLAN in its most basic form. Two PCs equipped with wireless adapter cards are all that is needed to form a peer-to-peer network, enabling the PCs to share resources with one another. While this type of network requires no administration or pre-configuration, it does not allow either PC to access a central server, inhibiting client/server computing. Applications: Spontaneous and/or collaborative work groups Small/branch offices sharing resources Remote control of another PC Games for two or more players Demos Designing a peer-to-peer network involves three main considerations: 1. The stations must be arranged so that they are all within the proper distance limits. 2. All stations must send and receive on the same transmission frequency. (Most wireless NICs have a factory-set default frequency) 3. The hidden node problem must be avoided so that each station can communicate with all other stations. 2) Client & Access Point In a Client & Access Point network, users not only benefit from extended range capabilities, they are also able to benefit from server resources, as the AP is connected to the wired backbone. The number of users supported by this type of network varies by technology and by the nature and number of the transmissions involved. Generally, they can support between 15 and 50 users.

12 WiFi Technology 10 3) Multiple Access Points Although coverage ranges in size from product to product and by differing environments, WLAN systems are inherently scalable. As APs have limited range, large facilities such as warehouses and college campuses often find it necessary to install multiple access points, creating large access zones. APs, like cell sites in cellular telephony applications, support roaming and AP to AP handoff. Large facilities requiring multiple access points deploy them in much the same way as their cellular counterparts, creating overlapping cells for constant connectivity to the network. As network usage increases, additional APs can be easily deployed.

13 WiFi Technology 11 WLAN Networks Implementation Considerations When implementing a WLAN solution, customers are confronted with a number of options and trade-offs that may make one system more suitable than the next. No one WLAN solution at present can deliver all things to all customers, some, as we have mentioned, deliver higher speeds, some have better range, etc. The following is a list of considerations network managers must confront before implementing a wireless LAN: Interoperability and Compatibility The first, and most important job of any network manager, is to insure that any WLAN products conform to wired infrastructure interconnection standards. Standards-based interoperability makes the wireless portion completely transparent to the rest of the network, and is generally based on Ethernet or Token Ring. Also, older WLAN systems from different vendors may not always interoperate, even if they are using the same technology (DSSS or FHSS) and the same frequency band. A wireless NIC from one vendor may have difficulty connecting to an access point from another vendor, because vendors may adjust their hardware or software to meet their own customization requirements and quality standards. However, the Wireless Ethernet Compatibility Alliance (WECA) now certifies WLAN vendors whose products are interoperable. The WECA seal (Wi-Fi Certification) guarantees that WLAN products from different vendors will work together. Proprietary versus Standard Although WLANs that follow the standards are now widely supported and will likely continue to be so. However, there are actually a few situations today in which a proprietary WLAN is a choice. May be to add stations to an existing WLAN, however, replacing a proprietary WLAN with one that follows the IEEE standard is a more forward-looking choice. Another reason, to implement an Infrared WLAN. The Infrared WLAN doesn t interfere with other communication systems, which makes it the choice to be deployed near sensitive scientific or medical equipment. Also, because infrared signal doesn t penetrate walls, so an infrared WLAN may be suited for a network that handles a sensitive data, such as in government or military applications. Peer-to-Peer versus Infrastructure Mode The decision regarding whether to configure the WLAN for peer-to-peer or infrastructure mode should be based upon the purpose of the network. Peer-to-peer mode should be used when wireless stations need to communicate only with each other. This mode is good for a temporary network. Also it s advisable to connect the peer-to-peer network as a first setup before installing the infrastructure mode. For users that need to access the internet or intranet, or for covering a larger area, the infrastructure made is deployed. Range And Coverage Product design and RF and IR propagation determine the distance over which a signal can transmit information. Objects including walls, metal, desks, and people can affect how signals propagate, and, therefore, the range a signal can travel. As we have mentioned before, IR waves cannot travel through opaque objects and have shorter wavelengths, making them more susceptible to interference,

14 WiFi Technology 12 shortening the distance over which they can transmit and receive information. The RF systems will provide the most range, but sacrifice data rates, while Infrared will support high data rates with limited range. Throughput WLAN throughput rates are a constant source of debate, and invariably come down to product and setup choices. IR, as we have mentioned, supports the highest overall data rates, but implementation is difficult. Between the two RF technologies, it is often quoted that DS systems support a higher data rate than FH systems on the order of 5:2. While this is true in low usage systems, FH systems are capable of dividing the allotted spectrum into more channels than DS systems, and, while supporting slower speeds, can actually support more users and, therefore, experience fewer bottlenecks. Interference WLANs can experience interference from other devices operating on the same frequencies. The ISM bands, set aside for free usage by most governments, often have other devices using these same frequencies in close proximity to WLANs. The 2.4 GHz band, for instance, must compete with microwave ovens for spectrum. While most WLAN technologies are designed to resist these types of interference, it is sometimes unavoidable. In addition, FH and DS systems most often cannot be implemented in the same environment despite the different characteristics of transmission; networks of the same type, yet different vendors, can often interfere with one another. Licensing The regulators of the countries governs radio transmission, including those used by WLANs. WLANs are most often operated in the ISM bands we mentioned previously as they do not require the end user to obtain a license to use the airwaves. Most countries have declared it is important, when choosing a vendor, to make sure that they can deliver a product that will conform to the 2.4 GHz portion of radio spectrum as ISM, but some have not. Products must conform to the spectrum requirements of the country in which they operate. Battery Life Battery life for end-user products varies from vendor to vendor and technology to technology and can be an extremely important consideration when designing a wireless network. All vendors typically employ design techniques to maximize the host computer s battery life, and some are more successful than others. Between DS and FH systems, the battery life issue is tilted in favor of FH systems as they have less bandwidth requirements. Generally, the more bandwidth it takes to transmit a signal, the greater degree of battery drain. Safety And Health Concerns WLAN system output is even less than that of cellular phones and no illness has ever been attributed to WLANs. Yet, there are concerns in hospitals when it comes to WLANs as monitoring devices and some medical devices (heart monitors and pacemakers) operate in the same frequency range. Hospital network administrators must make sure that any products they purchase have a sufficient track record of avoiding interference with these types of devices.

15 WiFi Technology 13 Summary This section presents the basic topology of WLAN networks. There are two main Service Set : o Independent Basic Service Set(IBSS) this represents the Ad hoc network with no base station to serve the users. o Extended Service Set(ESS) this represents the infrastructure mode where more than a Basic Service Set is deployed, to serve more users in a larger area. There are three main links in the WLAN chain that form the basis of the network: o Access Points which acts as the base station to the users, and acts as a bridge between the wireless and wired networks. o Network Interface Cards A PC or workstation uses a wireless NIC to connect to the wireless network. o Bridge Wireless bridges are used to connect multiple LANs. WLANs can be implemented in more than one form, depending upon the complexity desired: o Peer-to-Peer which represents the Ad Hoc (or IBSS) networks. o Client & Access Point where one access point is deployed to serve the users in a certain area.(bss) o Multiple Access point which represents the infrastructure mode (or ESS), where more than one access point is deployed and they are connected to the backbone existing network (for example Ethernet or Token Ring). There are some points must be taken into consideration when designing the WLAN network: o Interoperability and Compatibility. o Proprietary versus Standard. o Peer-to-Peer versus Infrastructure Mode. o Range and Coverage. o Throughput. o Interference. o Licensing. o Battery Life. o Safety And Health Concerns.

16 WiFi Technology WiFi Radio Topology The IEEE began to address the need for an interoperability standard among wireless LANs in After six drafts, the final proposal was ratified in June of 1997, specifying WLAN operation in the 2.4 GHz frequency range. The proposal specifies two layers, the Physical (PHY) and the Media Access Control (MAC). The physical layer refers to the three technologies supported by the standard, Frequency Hopping Spread Spectrum (FH), Direct Sequence Spread Spectrum (DS), and Infrared (IR). The Media Access Control (MAC) layer is concerned with the rules for accessing the wireless medium IEEE PHYSICAL LAYER The PHY layer is divided into two sublayers : 1. The Physical Medium Dependent (PMD) Sublayer: It includes the standards for the characteristics of the wireless medium (DSSS, FHSS, or IR). It defines the methods for transmitting and receiving data through the medium. 2. The Physical Layer Convergence Procedure (PLCP) sublayer: It reformats the data received from the MAC layer into packets (Frame) that the PMD sublayer can transmit. It listens to the medium to determine when the data can be sent. Spread Spectrum Technology Spread spectrum, a digital technology designed to trade off bandwidth for reliability and security. It comes in two forms, Frequency Hopping Spread Spectrum (FH), and Direct Sequence (DS). Both forms of Spread Spectrum consume more bandwidth than a typical narrowband transmission, but this enables a louder signal, far easier for the receiver to detect than a narrowband signal. Spread spectrum technologies have security advantages over narrowband technologies as well. Although spread spectrum technologies share a common background, there are certain advantages and disadvantages to the two forms implemented in WLAN applications, so we offer here a brief comparison. Frequency Hopping Frequency Hopping Spread Spectrum (FHSS)combines the bandwidth advantages of a narrowband signal with the security and clarity advantages of a wideband signal. FH uses a narrowband carrier, as little as one MHz in WLAN applications, that changes frequencies at a predetermined rate known to both the transmitter and receiver. This rate places the signal on a frequency for a very short period of time, called the dwell time, and then directs it to hop to the next frequency in the sequence. When synchronized in this way, the net effect is to maintain a single logical channel. To an unintended receiver, FH appears as impulse noise and is ignored. Without the hopping algorithm, FH signals are nearly impossible to intercept.

17 WiFi Technology 15 Advantages Limitations Low susceptibility to interference. FH systems are also highly scalable as numerous segments can be placed in the same area. Each access point creates its own LAN segment capable of transmitting multiple transmissions simultaneously. In dense user environments, many access points can be connected with overlapping coverage, enabling load balancing. Load balancing enables the clients to choose the access point that optimizes performance. This provides for both a greater number of users as well as an overall increase in the system performance. It doesn t support more than 2 Mbps. Direct Sequence DS systems spread signals over a wider bandwidth than FH systems. For each signal burst sent by a DS system, a redundant chipping code or chip is generated. Large chips increase the likelihood of recovering the original signal as statistical techniques embedded in the receiver can recover the original data without the need for retransmission. However, longer chipping codes consume more bandwidth than FH transmissions, supporting fewer overall channels, and therefore fewer users. Yet, as the signal is spread over a larger channel, higher data rates can be supported by DS systems, making them ideal for data intensive environments with less overall network traffic. DS systems are also extremely secure.

18 WiFi Technology 16 In order to intercept a DS signal, an intruder would have to know the frequency range in which the signal was being sent, in addition to the algorithm used to decode the chipping sequence. As the transmission amplitude in DS systems is small, it appears as noise to an unintended receiver, making interception extremely difficult. Advantages Secure. DS supports higher data rates, 1, 2, 5.5, 11 Mbps. Limitations The spreading of the chipping code is over an 22 MHz channel. Although this lessens the possibility of interference of the entire signal, it remains more susceptible to interference than FH systems, which are spread over an 83 MHz channel. It also limits the number of overlapping cells in a DS network to three, making continuous coverage in large facilities more difficult than with FH systems. Infrared Infrared technologies use extremely high frequencies, just below visible light in the electromagnetic spectrum, and are therefore unable to penetrate solid objects. Infrared is currently capable of higher data rates than RF, but, due to the range characteristics, it is not yet cost-effective in WLAN environments. Infrared requires directed (line of sight) or diffuse (reflective) capabilities for transmission. Directed WLANs that use line of sight principle, are impractical for mobile users. Instead they are best designed for a setting where the network devices are fixed in a stationary position without the possibility of something interfering with the line of sight. While diffused WLAN doesn t require line of sight. Instead it relies on reflected light. Emitters in a diffused WLAN have a wide-focused beam instead of a narrow beam. Emitters are usually pointed at the ceiling and use it as the reflection point. When the emitter transmits an infrared signal, it bounces off the ceiling and fills the room with the signal. Diffused WLANs covers up to 16 m.

19 WiFi Technology 17 Personal area networks and peer-to-peer networks of a few feet in distance are suited for infrared technology, as is the implementation of fixed sub-network connections such as LAN bridges. But, as infrared is unable to penetrate opaque objects, we don t believe RF technologies are threatened in the near term for enterprise-wide WLAN solutions. Advantages Limitations Infrared light doesn t interfere with other communication systems as it works in the optical region. Infrared signal doesn t penetrate walls, so the signal are kept inside the room. This makes less interference and prevents eavesdropping. Limited range of coverage (up to 16 m.). Not applicable for mobile users. slow data rate (only up to 4 Mbps). Note: Microwave WLAN technologies are also being used, mainly in WLAN bridge applications. Data rates and range for microwave products fall between RF and IR technologies. Microwave has been inhibited thus far by cost and safety issues, as well as the need for direct line of sight. The FCC has set aside spectrum in the 18.8 to 19.2 GHz bands for use in microwave applications however. A comparison of the features of light-based infrared, FHSS and DSSS wireless networks is summarized in the following table. IR FHSS DSSS Causes No Yes Yes Interfernce Can be No Yes Yes interfered Power Low Moderate Moderate Consumption Coverage Limited Broad Broad BW (Mbps) IEEE MAC LAYER: The Medium Access Control (MAC) Layer addresses the following issues: Accessing the medium The standard uses an access method known as the Distributed Coordination Function (DCF). The DCF specifies the use of Carrier Sense Multiple Access with Collision Avoidance (CSMA/CA) algorithm as the media access scheme. Association This establishes the wireless links between clients and access points in the network. Association begins by scanning where the station first scans the air to know the access points from beacons sent by the access points. Then the association process begins. Reassociation This is concerned with the handoff of clients as they roam the network.

20 WiFi Technology 18 Authentication The Standard has two ways of addressing authentication. By default the standard is an open system, allowing any client with a wireless connection device to address the network without authentication. The standard does provide, however, for a more secure network with the Wired Equivalent Privacy option, by configuring a Shared Key into the AP and its wireless clients. Only those equipped with the proper key will be allowed to access the AP. Power Management provides for two separate power modes for the operation of wireless clients, Active mode and Power Save mode. Active mode is enabled when a client is transmitting or receiving while Power Save mode is used when there is no communication to the network. The power management is used to preserve the power of laptops as they depend mainly on batteries IEEE Network Layer: Although IEEE specifies the PHY and MAC layer, yet the Network Layer needs enhancements to allow mobility. This enhancement involves the standard protocol of sending and receiving data, TCP/IP. TCP/IP: Each station on the network is assigned a unique IP address, which consists of 4 bytes. 3 bytes of them represents the IP address of the network, and 1 byte represents the host IP (or the station IP). The IP address is unique and fixed to each station, which prevents the mobility and roaming between networks. Mobile IP: Mobile IP provides a mechanism within TCP/IP protocol to support mobility. In mobile IP, computers are given a home address, which is a static address, on their home network. The computer also has a home agent, which keeps track of where the mobile computer is located. When the mobile computer roams to another network (called a Foreign Network),a foreign agent provides routing services to the mobile computer and it assigns him a new, but temporary IP number. So when a data is sent to the mobile computer, to its home address, the home agent forward it to the foreign agent. To respond to the original sender, the mobile computer uses traditional IP routing instead of tunneling back toward its home agent.

21 WiFi Technology 19 Summary This section describes the specification of the PHY and MAC Layer of the WLAN networks, besides the enhancements in the network layer. The IEEE PHY Layer is divided into two sublayers: o Physical Medium Dependent (PMD) Sublayer which includes the standards for the characteristics of the wireless medium (DSSS, FHSS, or IR), and defines the methods for transmitting and receiving data through the medium. o Physical Layer Convergence Procedure (PLCP) sublayer reformats the data received from the MAC layer into packets (Frame) that the PMD sublayer can transmit, and listens to the medium to determine when the data can be sent. The IEEE standard specifies three technologies to be deployed in the air interface: o Infrared technology. o Spread Spectrum technology: Direct Sequence Spread Spectrum. Frequency Hopping Spread Spectrum. The choice of the required technology depends upon the speed, bandwidth, coverage, interference... The IEEE MAC Layer addresses the following issues: o Accessing the medium. o Association. o Re-association (Roaming). o Authentication. o Power Management. Although IEEE specifies the PHY and MAC layer, yet the Network Layer needs enhancements to allow mobility, so it introduces the Mobile IP protocol as an enhancement to the TCP/IP protocol. In the Mobile IP the user is assigned a temporary IP address, if he is roaming outside his home network.

22 WiFi Technology IEEE Standards Today there are a lot of standards used for wireless networking, the attention of this section is to give a brief overview of the standards defined by IEEE, but with focusing on the most popular standard which is IEEE b. The IEEE specifications are wireless standards that specify an "over-the-air" interface between a wireless client and a base station or access point, as well as among wireless client. IEEE standard primarily addresses two separate layers of the ISO networking model: Physical network layer(phy) - lowest ISO layer that defines the physical transmission characteristics of the signal - in this case, radio signal such as the frequency, power levels, and type of modulation. The Media Access Control layer (MAC), is mostly made up of softwarebased protocols that enable devices to talk to each other. These IEEE standards are specifying 9 standards, IEEE a-i. IEEE a (also called WiFi5): It is a Physical Layer (PHY) standard, that works in unlicensed 5-GHz radio band using Orthogonal Frequency Division Multiplexing (OFDM).It supports data rates from 6 Mbps up to 54 Mbps. It will use the same MAC layer as Products started appearing in 3Q 2001 and 1Q The a standard includes features like priority for certain types of traffic, also it offers much less potential for radio frequency (RF) interference than other PHYs (e.g b and g). With high data rates and relatively little interference, a does a great job of supporting multimedia applications and densely populated user environments. IEEE b (also called WiFi): Slightly older standard that supports speeds of 5.5Mbps and 11 Mbps in addition to the 1Mbps and 2Mbps data rates. It's deployed in 2.4 GHZ radio band. IEEE b uses CCK(Complementary Code Keying) to provide the high data rates. IEEE finalized this standard (IEEE Std b-1999) in late Several vendors offer products conforming to this standard. IEEE c : c provides required information to ensure proper bridge operations. This project is completed and product developers utilize this standard when developing access points. There is really not much in this standard relevant to wireless LAN installers.

23 WiFi Technology 21 IEEE d : When first became available, only a handful of regulatory domains (e.g. U.S., Europe and Japan) had rules in place for the operation of WLANs. In order to support a widespread adoption, the d task group has to define PHY requirements that satisfy global harmonization. This is especially important for operation in the 5-GHz bands because the use of these frequencies differ widely from one country to another. IEEE e: This standard works on QoS (quality of service) issue in LANs to optimize the transmission of voice and video. There's currently no effective mechanism to prioritize traffic within As a result the e task group is refining the MAC to improve QoS for better support of audio and video. The e group should finalize the standard by the end of 2002, with products probably available by mid Because e falls within the MAC layer, it will be common to all PHYs and be backward compatible with existing WLANs. As a result, the lack of e being in place today doesn't impact your decision on which PHY to use. The standard, which is still under development, will use a method called Hybrid Coordination Function, or HCF. A final standard is expected in the first half of (2003) and will support legacy devices via firmware and device driver updates. IEEE f: Today, a user roaming between access points may lose some packets during the handoff between different vendors' devices. The existing working group purposely didn't define this element in order to provide flexibility in working with different distribution systems. The problem, however, is that access points from different vendors may not interoperate when supporting roaming f standard ensures multi-vendor access-point interoperability through the Inter-Access Point Protocol, or IAPP. The final standard, expected by year's end (may be, more likely in early 2003), will arrive as a flash update to legacy access points. The inclusion of f in access point design will eventually open up your and add some interoperability assurance when selecting access point vendors. IEEE g: g is an extension to b. It will broaden b's data rates to 54Mbps within the 2.4 GHz using OFDM(Orthogonal Frequency Division Multiplexing)technology. Because of the backward compatibility, an b radio card will interface directly with an g access point(and vice versa)at 11Mbps or lower depending on range. A big issue with g, which also applies to b, is considerable RF

24 WiFi Technology 22 interference from other 2.4GHz devices, such as the cordless phones. It's possible to manage the problem by limiting sources of RF sources of RF interference; however, you can't always eliminate the problem. Initial approval in August Final specification expected during the first half of IEEE h : The a standard faces interference problems in Europe, where it shares the 5-GHz frequency band with radar and satellite communications. The h provides Dynamic Frequency Selection (DFS)and Transmit Power Control(TPC) to deal with this problem, this will make h the successor to a. Dynamic Frequency Selection, or DFS, allows devices to detect such transmissions and switch to an alternative channel. The Transmit Power Control (TPC) protocol will allow users close to an access point to reduce transmission power in order to reduce interference with other users. A final standard, expected the end of 2003, will require client device driver and access-point firmware updates. IEEE i -- Security (Expected to be ratified in September 2003) i is actively defining enhancements to the MAC Layer for Enhanced Security to counter the issues related to Wired Equivalent Privacy(WEP).The existing standard specifies the use of relatively weak, static encryption keys without any form of key distribution management. This makes it possible for hackers to access and decipher WEP-encrypted data on your WLAN. Two encryption methods replace the discredited WEP protocol. Temporal Key Integrity Protocol (TKIP), is an interim method. It will support legacy clients and access points through software updates, but cryptographers say TKIP will be broken eventually. The other scheme, based on the Advanced Encryption Standard(AES), will offer the best security but will likely require new hardware. While the specification won't be final until sometime next year, vendors are collaborating to produce an interoperable version of TKIP that should be available this year.

25 WiFi Technology 23 Summary This section handles the IEEE standards and gives a simple explanation of the functionality of each of the present nine standards. IEEE a (WiFi 5) It is a Physical Layer (PHY) standard, that works in unlicensed 5-GHz radio band using Orthogonal Frequency Division Multiplexing (OFDM).It supports data rates from 6 Mbps up to 54 Mbps. IEEE b (WiFi) Slightly older standard that supports speeds of 5.5Mbps and 11 Mbps in addition to the 1Mbps and 2Mbps data rates. It's deployed in 2.4 GHZ radio band. IEEE b uses CCK(Complementary Code Keying) to provide the high data rates. IEEE c provides required information to ensure proper bridge operations. IEEE d In order to support a widespread adoption, the d task group has to define PHY requirements that satisfy global harmonization. IEEE e This standard works on QoS. IEEE f ensures multi-vendor access-point interoperability through the Inter-Access Point Protocol, or IAPP. IEEE g g is an extension to b. It will broaden b's data rates to 54Mbps within the 2.4 GHz using OFDM(Orthogonal Frequency Division Multiplexing)technology. IEEE h The a standard faces interference problems in Europe, where it shares the 5-GHz frequency band with radar and satellite communications. The h provides Dynamic Frequency Selection (DFS)and Transmit Power Control(TPC) to deal with this problem. IEEE i i is actively defining enhancements to the MAC Layer for Enhanced Security.

26 WiFi Technology Wi-Fi Security Special precautions must be taken to maintain security in wireless network. However, no one approach works for all environments and situations. The optimal solution(s) in a particular network depends on factors such as the level of security required, size of the network, whether access is required for remote workers, and so forth. Securing WLANs is provided through two process: Authentication and Encryption. Authentication is the means by which one STA is verified to have authorization to communicate with a second STA. In the infrastructure mode, authentication is established between an AP and each STA. Authentication is a prerequisite for association. Association is the establishment of communication services between the STA and the AP, and mapping the STA to the AP to provide the mobile node with access to the wired LAN. Authentication can be either Open System or Shared Key. An Open System, any requesting STA may be granted authentication. However, success is not guaranteed. The STA receiving the request may still deny authentication. In Shared Key system, only stations which possess a secret key can be authenticated. Obviously transmission of the Shared Key could lead to its interception by unauthorized users. It is therefore encrypted prior to encryption. Shared Key authentication is available to systems having the optional encryption capability. Encryption is intended to provide a level of security comparable to that of a wired LAN. The encryption algorithm is designated as Wired Equivalent Privacy (WEP). WEP uses the RC4 PRNG algorithm from RSA Data Security, Inc. The WEP algorithm was selected to meet the following criteria: Reasonably Strong. Self-Synchronizing. Computationally Efficient. Exportable. Optional. Three well-known methods to secure access to an AP are built into networks. These basic methods are widely available and may be sufficient for some deployments: Service set identifier (SSID) Media Access Control (MAC) address filtering Wired Equivalent Privacy (WEP) Service set identifier (SSID): Network access control can be implemented using an SSID associated with an AP or group of APs. The SSID provides a mechanism to segment a wireless network into multiple networks serviced by one or more APs. Each AP is programmed with an SSID corresponding to a specific wireless network. To access this network, client computers must be configured with the correct SSID. A building might be segmented into multiple networks by floor or department. Typically, a client computer can be configured with multiple SSIDs for users who require access to the network from a variety of different locations. Because a client computer must present the correct SSID to access the AP, the SSID acts as a simple password and, thus, provides a measure of security. However, this

27 WiFi Technology 25 minimal security is compromised if the AP is configured to broadcast its SSID. When this broadcast feature is enabled, any client computer that is not configured with a specific SSID is allowed to receive the SSID and access the AP. In addition, because users typically configure their own client systems with the appropriate SSIDs, they are widely known and easily shared. Media Access Control (MAC) address filtering: While an AP or group of APs can be identified by an SSID, a client computer can be identified by the unique MAC address of its network card. To increase the security of an network, each AP can be programmed with a list of MAC addresses associated with the client computers allowed to access the AP. If a client's MAC address is not included in this list, the client is not allowed to associate with the AP. MAC address filtering (along with SSIDs) provides improved security, but is best suited to small networks where the MAC address list can be efficiently managed. Each AP must be manually programmed with a list of MAC addresses, and the list must be kept up-to-date. In practice, the manageable number of MAC addresses filtered is likely to be less than 255 clients. In addition, MAC addresses can be captured and spoofed by another client to gain unauthorized access to the network. Wired Equivalent Privacy (WEP): Wireless transmissions are easier to intercept than transmissions over wired networks. The standard currently specifies the WEP security protocol to provide encrypted communication between the client and an AP. WEP employs the symmetric key encryption algorithm, Ron s Code 4 Pseudo Random Number Generator (RC4 PRNG). Under WEP, all clients and APs on a wireless network typically use the same key to encrypt and decrypt data. The key resides in the client computer and in each AP on the network. The standard does not specify a key-management protocol, so all WEP keys on a network usually must be managed manually unless they are used in conjunction with a separate key-management protocol. For example, 802.1X provides WEP key management. Support for WEP is standard on most current cards and APs. WEP specifies the use of a 40-bit encryption key and there are also implementations of 104-bit keys. The encryption key is concatenated with a 24-bit initialization vector (IV), resulting in a 64- or 128-bit key. This key is input into a pseudorandom number generator. The resulting sequence is used to encrypt the data to be transmitted. (WEP keys can be entered in alphanumeric text or hexadecimal form). WEP encryption has been shown to be vulnerable to attack. Because of this, static WEP is only suitable for small, tightly managed networks with low-to-medium security requirements. In these cases, 128-bit WEP should be implemented in conjunction with MAC address filtering and SSID (with the broadcast feature disabled). Customers should change WEP keys on a regular schedule to further minimize risk. For networks with high security requirements, the VPN or emerging i standards-based solutions are preferable. These solutions are also preferable for large networks, in which the administrative burden of maintaining MAC addresses on each AP makes this approach impractical. The point at which the number of wireless client systems becomes unmanageable varies depending on the organization s ability to

28 WiFi Technology 26 administer the network, the choice of security methods (SSID, WEP, and MAC address filtering), and its tolerance for risk. If MAC address filtering is used on a wireless network, the fixed upper limit is established by the maximum number of MAC addresses that can be programmed into each AP used in an installation. This upper limit varies, but the practical problem of manually entering and maintaining valid MAC addresses in every AP on a network limits the use of MAC address filtering to smaller networks. Virtual Private Network (VPN), as well as the upcoming IEEE i standard addresses weaknesses in native security. Both VPN and i-based security solutions provide better security and scale well to large networks. As The IEEE i standard was explained in the last section, we will discuss now the VPNs. VPN: Virtual Private Network technology (VPN) has been used to secure communications among remote locations via the Internet since the 1990s. A familiar and already widely used technology in the enterprise, it can readily be extended to Wi-Fi WLAN segments on existing wired networks. Although VPNs were originally developed to provide point-to-point encryption for long Internet connections between remote users and their corporate networks, they have recently been deployed in conjunction with Wi-Fi WLANs. When a WLAN client uses a VPN tunnel, communications data remains encrypted until it reaches the VPN gateway, which sits behind the wireless AP. Thus, intruders are effectively blocked from intercepting all network communications. Since the VPN encrypts the entire link from the PC to the VPN gateway in the heart of the corporate network, the wireless network segment between the PC and the AP is also encrypted. This is why VPNs have been recommended to help secure Wi-Fi.

29 WiFi Technology 27 Summary In this section, Securing of WLANs is discussed. Securing WLANs is done through two processes; Authentication and Encryption. Authentication is the mean by which one STA is verified to have authorization to communicate with a second STA, or with the access point. Encryption uses certain algorithms to encrypt the data sent between stations, so as to prevent intruders from eavesdropping. There are three well-known methods to secure access to an AP: o Service set identifier(ssid). o Media Access Control (MAC) address filtering. o Wired Equivalent Privacy (WEP). Virtual Private Network (VPN), as well as the upcoming IEEE i standard addresses weaknesses in native security.

30 WiFi Technology Wi-Fi Vs Other technologies: To fairly judge WiFi, we have to compare it with other wireless technologies. So in this section we will compare it with two important technologies; Bluetooth and 3G WiFi and Bluetooth: Speed: Bluetooth operates at about 720kbps, WiFi at 11Mbps--a big speed difference. Bluetooth is too slow for video transfers, and probably too slow to move a bunch of large images off a digital camera. And you wouldn't connect a hard drive to your computer using Bluetooth. Applications: Bluetooth is a cable replacement, designed to connect devices point-topoint. WiFi is designed to hook up an entire network; it can be used to connect one computer directly to another, but that's not its real purpose. However, there will be Bluetooth access points to bridge the two networks, but they won't be the best choice in most applications. Security: Bluetooth is probably a bit more secure than WiFi. For one thing, Bluetooth is designed to cover shorter distances than b; if someone hacks your Bluetooth network, how much damage can they do? Print to your printer? Also, Bluetooth offers two levels of (optional) password protection. WiFi has all the security risks associated with other networks: Once someone has access to one part, he can access the rest. Ease of use: Bluetooth devices "advertise" their capabilities to others, and a single device can be connected to up to seven other devices at the same time. This makes it easy to find and connect to the device you are looking for or to switch between devices, such as two printers. WiFi is more complex; it requires the same degree of network management as any comparable wired network. Power: Bluetooth has a smaller power requirement than WiFi, and devices can be physically smaller, making it a good choice for consumer electronics devices. Interference: Bluetooth and WiFi share the same band of frequencies and could, therefore, interfere with one another. For a variety of technical reasons, Bluetooth is more likely to interfere with WiFi than vice versa. Bottom Line: Bluetooth is the choice for connecting single devices when speed isn't a major issue; it's best suited to low-bandwidth applications such as sharing printers, syncing PDAs, using a cell phone as a modem, and (eventually) connecting appliances to one another within a 30- to 60-foot range. Bluetooth isn't a good replacement for all cables. It's not a great way to connect highbandwidth devices, such as external drives or digital video cameras and computers, Bluetooth is probably not a good choice for downloading stills from your digital camera to your PC. And WiFi is the best choice for connecting your computers to one another and to the Internet.

31 WiFi Technology WiFi and 3G: Although the two technologies reflect fundamentally different service, industry, and architectural design goals, origins, and philosophies, each has recently attracted a lot of attention as candidates for the dominant platform for providing broadband wireless access to the Internet. It remains an open question as to the extent to which these two technologies are in competition or, perhaps, may be complementary. How are WiFi and 3G alike? It might appear that 3G and WiFi address completely different user needs in quite distinct markets that do not overlap. While this was certainly more true about earlier generations of mobile services when compared with wired LANs or earlier versions of WLANs, it is increasingly not the case. The end- user does not care what technology is used to support his service. What matters is that both of these technologies are providing platforms for wireless access to the Internet and other communication services. A. Both are wireless Both technologies are wireless which: (1) avoids need to install cable drops to each device when compared to wire line alternatives; and (2) facilitates mobility, avoiding the need to install or reconfigure local distribution cable plant can represent a significant cost savings, whether it is within a building, home, or in the last mile distribution plant of a wire line service provider. New base stations are added as more users in the local area join the wireless network and cells are resized. This has implications for the magnitude of initial investment required to bring up WLAN or 3G wireless service and for the network management and operations support services required to operate the networks. However, it is unclear at this time which type of network might be lower cost for equivalent scale deployments, either in terms of upfront capital costs (ignoring spectrum costs for now) or on-going network management costs. B. Both are access technologies Both 3G and WiFi are access or edge-network technologies. This means they offer alternatives to the last-mile Wireline network. Beyond the last- mile, both rely on similar network connections and transmission support infrastructure. For 3G, the wireless. For WiFi, the wireless link is a few hundred feet from the end-user device to the base station. The base station is then connected either into the Wireline LAN or enterprise network infrastructure or to a Wireline access line to a carrier's backbone network and then eventually to the Internet. C. Both offer broadband data service Both 3G and WiFi support broadband data service, although as noted earlier, the data rate offered by WiFi (11Mbps) is substantially higher than the couple of 100 Kbps

32 WiFi Technology 30 expected from 3G services. Although future generations of wireless mobile technology will support higher speeds, this will also be the case for WLANs, and neither will be likely to compete with wireline15 speeds (except over quite short distances). Both services will also support "always on" connectivity which is another very important aspect of broadband service. Indeed, some analysts believe this is even more important than the raw throughput supported. How different they are? A. Current business models/deployment are different. As noted above 3G represents an extension of the mobile service provider model. This is the technology of choice for upgrading existing mobile telephone services to expand capacity and add enhanced services. In contrast, WiFi comes out of the data communications industry (LANs) which is a by-product of the computer industry. The basic business model is one of equipment makers who sell boxes to consumers. The services provided by the equipment are free to the equipment owners. B. Spectrum policy and management One of the key distinctions between 3G and WiFi that we have only touched upon lightly thus far is that 3G and other mobile technologies use licensed spectrum, while WiFi uses unlicensed shared spectrum. This has important implications for (1) Cost of service; (2) Quality of Service (QoS) and Congestion Management; and (3) Industry structure. Second, while licensed spectrum is expensive, it does have the advantage of facilitating QoS management. With licensed spectrum, the licensee is protected from interference from other service providers. This means that the licensee can enforce centralized allocation of scarce frequencies to adopt the congestion management strategy that is most appropriate. In contrast, the unlicensed spectrum used by WiFi imposes strict power limits on users (i.e., responsibility not to interfere with other users) and forces users to accept interference from others. This makes it easier for a 3G provider to market a service with a predictable level of service and to support delay-sensitive services such as real-time telephony. In contrast, while a WiFi network can address the problem of congestion associated with users on the WiFi network, it cannot control potential interference from other WiFi service providers or other RF sources that are sharing the unlicensed spectrum (both of which will appear as elevated background noise). This represents a serious challenge to supporting delay-sensitive services and to scaling service in the face of increasing competition from multiple and overlapping multiple service providers. Third, the different spectrum regimes have direct implications for industry structure. For example, the FreeNet movement is not easily conceivable in the 3G world of licensed spectrum. Alternatively, it seems that the current licensing regime favors incumbency and, because it raises entry barriers, may make wireless- facilities-based competition less feasible.

33 WiFi Technology 31 C. Status of technology development is different. The two technologies differ with respect to their stage of development in a number of ways. These are discussed in the following subsections. 1. Deployment Status While 3G licenses have been awarded in a number of markets at a cost of billions of dollars to the licensees, we have seen only limited progress with respect to service deployment. In contrast, we have a large installed base of WiFi networking equipment that is growing rapidly as WiFi vendors have geared up to push wireless home networks using the technology. The large installed base of WiFi provides substantial learning, scale, and scope economies to both the vendor community and endusers. 2. Embedded Support for Services Another important difference between 3G and WiFi is their embedded support for voice services. 3G was expressly designed as an upgrade technology for wireless voice telephony networks, so voice services are an intrinsic part of 3G. In contrast, WiFi provides a lower layer data communications service that can be used as the substrate on which to layer services such as voice telephony. For example, with IP running over WiFi, it is possible to support Voice services would be implemented and quality assured over WLAN networks. Another potential advantage of 3G over WiFi is that 3G offers better support for secure/private communications than does WiFi. 3. Standardization It is also possible to compare the two technologies with respect to the extent to which they are standardized. Broadly, it appears that the formal standards picture for 3G is perhaps more clear than for WLAN. For 3G, there is a relatively small family of internationally sanctioned standards, collectively referred to as WCDMA. However, there is still uncertainty as to which of these (or even if multiple ones) will be selected by service providers. In contrast, WiFi is one of the family of continuously evolving x wireless Ethernet standards, which is itself one of many WLAN technologies that are under development. There are also some form factor issues that may impact the way these services will be used. Initially, it seems likely that the first 3G end-user devices will be extensions of the cell phone while the first WiFi end- user devices are PCs. Of course, there are also 3G PC cards to allow the PC to be used as an interface device for PCs, and with the evolution of Internet appliances (post-pc devices), we should expect to see new types of devices connecting to both types of networks. However, for mobility, we should expect to continue to see constraints on size and power requirements that will impose constraints on the services that are offered.

34 WiFi Technology 32 Summary In this section, WiFi will criticized through comparing it with other wireless technologies, and we took for example; Bluetooth and 3G. Bluetooth is used mainly as a cable replacement while WiFi is used mainly for connecting stations to each other and to the internet. We can t decide whether 3G and WiFi are in competition or may be complementary, as for example the 3G operator may establish WiFi services in hotspots as a supplementary service to his customers. 3G and WiFi are similar in that: - Both are wireless. - Both are access technologies. - Both provide broadband data services. 3G and WiFi are differ in : - Current Business model. - Spectrum policy and management. - Status of technology development is different.

35 WiFi Technology 33

36 WiFi Technology Roadmap to WiFi Four key developments have taken place that are contributing to WLAN market development: 1. Standards are established. The standards have been stable since 1997 and are widely supported by several manufacturers. 2. Technology has advanced. Wireless LAN developers have made significant strides in addressing issues of security, reliability, speed and distance. 3. Key vendors have added credibility. With companies like 3Com, Alcatel, Breezecom, Cisco, Enterasys, and Wavelink all shipping products, the category is far more credible. 4. Competition has resulted in reduced prices. Wireless LAN access points and NICs can be purchased today for $600 and $200 respectively. On the demand side, four key factors are contributing to growing WLAN opportunity: 1. Laptop-equipped employees need network access. In fact, the need to support laptop-equipped workers is a key driver for WLAN adoption. 2. PDA-equipped employees increasingly need network access. Increasingly widespread use of PDAs is creating a whole new category of WLAN demand. 3. LAN-related moves/add/changes are costly and disruptive. Much of this difficulty relates to the cabling itself. Cabling infrastructure requires ongoing expansion and sometimes even replacement. 4. WLANs are increasingly perceived as a viable substitute to wired LANs. Awareness of, and favorability to, the category is rising. In fact, over 40% believe their organizations will use WLANs as commonly as they do wired by the year Wireless Local Area Networks (WLANs) are experiencing significant growth, due to cost and convenience factors. In many corporate enterprises, WLANs have replaced or are complementing traditional cabled networks, enabling enterprises to create and maintain a wireless network throughout their facility single or multiple buildings without the costs and physical limitations experienced with traditional cabling. WLANs provide unprecedented levels of flexibility for workers, increasing their productivity by allowing them to roam throughout the corporate facility, easily collaborating with colleagues, without losing access to network resources. Demand for roaming access extends outside enterprise boundaries into the public space. Busy mobile business users want access to their corporate information while on the road, which has spawned the creation of public wireless access hot spots in a variety of venues, such as airports and hotels. While public wireless LAN services often called Wi-Fi are still relatively new, user demand for ubiquitous wireless access is growing rapidly. As with any new market, the Wi-Fi market offers opportunities to existing and new players. We believe Carriers can capitalize on their existing infrastructure, billing systems and downstream customer relationships to incorporate this complementary service offering into their portfolio of services for revenue opportunities, whether they re Wireline or Wireless Service Providers. By 2007, it s expected that revenue from hot-spot users is projected to equal $3.518 billion and the number of public WLAN hot spots in North America is expected to

37 WiFi Technology 35 grow to 38,834, [according to Gartner, Inc. s Public Wireless LAN Hot Spots: Market Trends and Forecasts report from August 8, 2002]. The public WLAN access market Wi-Fi is growing by leaps and bounds and is, without a doubt, here to stay. Carriers can t ignore the changing preferences of their customers, and in fact, should be deliberately looking at the market now in order to identify their opportunities and position themselves to capture this business. We believe Carriers have two very attractive opportunities in the Wi-Fi market space: to offer roaming and hot spot access as part of their overall subscriber service offering, and to provide managed WLAN services to their enterprise customers. However, Carriers have their work cut out for them: in the public hot spot market that means developing hot spot footprints, establishing roaming agreements, and ensuring that they have the authentication and billing integration to support the business. And for managed WLAN services, the key challenge will be to create a profitable service offering that delivers superior customer service. We believe the opportunities are significant enough to warrant this work, and many Service Providers are ideally placed to leverage their existing systems, infrastructure and customer relationships to reap the Wi-Fi rewards.

38 WiFi Technology Business Model for WiFi To establish a good market for WiFi, there must be a well-established Market model with its players (and the relation between them) are well-defined. For that we will present in this report two case studies from two different organizations; one is Boingo which is a wireless ISP launched in 2001,and it was founded by the chairman of Earthlink(one of the largest ISPs in US). The second is Bridgewater Systems which offer solutions for subscriber access & management, provisioning, mediation and network & service management.

39 WiFi Technology 37 Boingo Case Study: Taking a page from the ISP business - In the mid 1990 s, EarthLink created a segmentation map to plot its course in a rapidly evolving ISP industry. Unlike all previous attempts to provide nationwide ISP service, EarthLink elected not to build its own coast-to-coast network. Instead of spending time and money building a big network, EarthLink focused on providing great software, support and service to its customers, and it left the network build-out to specialist companies who were great at that business and who got economies of scale by also being focused. - EarthLink s segmentation map had three primary industry layers. The physical layer companies owned the physical infrastructure, such as phone and cable lines. They sold to the next layer up, the network layer companies that built and operated Internet backbones with hundreds of points of presence around the country. Those companies in turn sold to the brand layer companies on the top of the stack who served end users. Here s the model showing a sampling of one or two companies at each layer: - Instead of trying to vertically integrate and do it all, the most successful industry players focused primarily on one layer of the stack.

40 WiFi Technology 38 Hot Spot industry segmentation - A similar segmentation is taking shape in the Wi-Fi hot spot industry, which has four layers: o The Venue Layer consists of the companies that own the physical locations where hot spots will be deployed. o Companies in the hot spot operators Layer contract with venues to deploy Wi-Fi gear and operate commercial hot spots. o Because of the inherent fragmentation of hot spots, HSOs will partner with companies on the Aggregation Layer to provide roaming, software and settlement services and drive traffic to their networks. o Aggregators in turn enable the Brand Layer companies to offer Wi-Fi access to end users. - Here is the segmentation map of the hot spot industry with a small sampling of companies competing at each layer: - As in the ISP space, the most successful companies will focus primarily on one industry layer, partner between the layers and compete within their own layer.

41 WiFi Technology 39 Venue layer: -Venue owners make money in Wi-Fi by either vertically integrating and operating their own hot spots, or more commonly by licensing the right to deploy hot spots to an HSO. - In general, if the HSO pays for 100% of the cost of deploying and managing the hot spot infrastructure, they will share very little or none of the revenue with the venue owner, at least until the HSO s costs are recouped. The more of the up-front costs paid by the venue owner, the higher their revenue participation. - Many venue owners are more interested in providing a hot spot as an amenity and convenience to their customers than in generating direct revenue. Operators of airports, hotels and cafés are quickly realizing that not providing a hot spot in their venues will soon mean lost revenues and even lost customers. Hot spot operators layer: - Hotspot Operators (HSOs) are the network provider who deploys and manages Wi-Fi networks in public spaces. - HSO success is determined by operating the lowest cost networks with the highest volume of traffic and revenue. An HSO s monthly per location costs are mostly fixed: depreciation of equipment, hot spot maintenance and backhaul costs for a DSL line or T1. Once there s enough traffic to overcome these fixed costs, all additional revenue is pure margin. - The network provider may pay the venue a rental fee or revenue split for the right to own the network in the venues location. Under other arrangements, a network provider acts strictly as an integrator and therefore receives a fixed payment for network deployment and management and the venue (such as a hotel) receives 100% of the revenue. Aggregation layer: - Aggregators such as Boingo strike wholesale access agreements with HSOs and consolidate their hot spots into a single seamless network. They turn around and provide a single network to brands, along with software, technical support and back-office services. - In some cases, brands will have direct relationships with larger HSOs to gain access to their hot spots. However, they will still need an aggregator to tie those hot spots together into a single network along with thousands of smaller HSOs that the brand is unlikely to want to deal with. - The brand charges their end user and pays the aggregator fees for network aggregation, roaming, settlement, support and software. The aggregator in turn settles with each HSO, paying a wholesale connect fee for each of the brand s user connections.

42 WiFi Technology 40 - After the industry shakeout, there are likely to be only one or two major aggregators. HSOs are unlikely to want to work with more than one aggregator, especially if that aggregator already has partnerships with many brands representing millions of potential users. Brands layer: - Brands include cellular carriers, ISPs, PC manufacturers and enterprise remote access providers seeking to offer a Wi-Fi hot spot service to their customers. - An aggregator and roaming are essential to brands, both to provide coverage and to drive additional demand to their hot spots. - As competition heats up, the most successful players will be the ones most focused and who can get economies of scale within a layer. For a company with a multi-layer approach, this may mean running each layer as though it were an independent entity. - For example, several large cellular carriers are now deploying commercial hot spots, at the hot spot operators layer, and are launching branded Wi-Fi services, at the brands layer. Certainly, they have the capital and expertise to deploy networks, and they have relationships with millions of existing customers to whom they can promote a Wi-Fi hot spot service.

43 WiFi Technology 41 Bridgewater Systems Case Study: - Bridgewater Systems believes the WLAN market will develop through three distinct phases over the next two years. Phase 1: Basic WLAN Access 2002, to mid Deployment of basic WLAN service: capitalize on immediate opportunities. Define pricing structure for WLAN service, understand operational costs, and refine business processes Phase 2: Supplementary Services Latter half of 2003, basic services should be in place. Revenue expansion through supplementary services to enhance user experience. Business beginning to grow, margins improving. Phase 3: Seamless Access, Service & Management Most of Major opportunities in seamless and ubiquitous access. Solid return on investment - especially for carriers who've invested in equipment & infrastructure, and have positioned themselves for success.

44 WiFi Technology 42 - Bridgewater Systems proposed a business model and defined its players as: WLAN Hotspot Provider. WLAN Service Provider. WLAN Clearinghouse. Managed WLAN Service Provider. WLAN Hotspot Provider: WLAN hotspot providers are deploying hotspots at premium public venues to take advantage of the increasing subscriber demands for the high-speed access. Market Model - The Hotspot Service Provider does the following: Set up a network of hotspots for geographical or vertical coverage. Develop profit-sharing agreements with venue owners. Exploit existing copper or coax to optimize backhaul costs, or share the venue's facilities. Ensure on capitalizing revenue opportunities from pay-as-you-go users, new value-added services. Invest in remote monitoring & management capabilities to provide strong cost savings.

45 WiFi Technology 43 Key Revenue Opportunities & Operational Considerations Phase 1: Basic WLAN Access Revenue Credit card payment portal Wholesale services Phase 2: Supplementary Services Usage sensitive pricing Tiered service offerings Prepaid services Pay-per-use access Phase 3: Seamless Access, Service & Management Settlement for service portability Settlement for roaming session continuity Services Access Roaming Bandwidth and time limits Quality of service guarantees Bandwidth on demand Network based VPN Download user profile to visited hotspot Roaming to/from 3GVoice over WLAN

46 WiFi Technology 44 WLAN Service Provider: WLAN Service Provider offers WLAN access as an add-on service for the existing subscribers, and to attract new subscribers. It also creates a satisfactory coverage area, by signing roaming agreements with WLAN hotspot providers and clearinghouses. Market Model -WLAN Service Provider can do the following: Creating hot-spot roaming services for their direct subscribers. Creating vertical market offerings to appeal to direct subscribers, such as café hot spots, hotel hot spots, and so on. Creating or increasing geographic coverage in strategic markets. Authorizing users based on strong policies, passing these policies in real time to the roaming partners in order to establish the subscriber s service and entitlements. (For example, tunnel setup.) Tracking usage to support a variety of billing models, including minutes of use, megabytes of data, pay-per-view and so on. Aggregating all usage related to a single Wi-Fi session including bytes, time and chargeable resources into a single session record, which makes it easier for billing systems to translate into a single line item on the user s bill. And eventually, aggregate usage records for a session that roams across a variety of access technologies such as , CDMA plus GPRS services.

47 WiFi Technology 45 - Like Service Providers, Hot Spot Aggregators connect Wi-Fi users to the network, and tend to offer monthly or hourly subscription services direct to subscribers. In some cases, these Aggregators will own the hot spots, and in others, they will have roaming agreements with hot spot Facility Providers, and offer their service either at the wholesale or retail level. - What may differentiate Hot Spot Aggregators is that some of them tend to offer their services around a theme or specific vertical market, such as an Aggregator that offers hot spot access at hotels, one that offers access at cafés, or one that offers services at a variety of airports. Key Revenue Opportunities & Operational Considerations Phase 1: Basic WLAN Access Revenue Flat-rate billing Bundling with DSL, Dial, 3G Phase 2: Supplementary Services Usage sensitive pricing Tiered service offerings Prepaid services Pay-per-use access Bundling with services Phase 3: Seamless Access, Service & Management Charging and settlement for service portability Charging and settlement for roaming session continuity Services Roaming Bandwidth and time limits Quality of service guarantees Bandwidth on demand Network based VPN Download user profile to visited hotspot Roaming to/from 3G Voice over WLAN

48 WiFi Technology 46 WLAN Clearinghouse: A Clearinghouse focuses on brokering relationships - and in particular roaming agreements - between WLAN hotspot providers and WLAN service providers, it does the following: Offer mediation, settlement and reconciliation functions to calculate and validate payments between service providers and hotspot providers. Provide comprehensive reports to these providers. Broker supplementary service requests. Provide authentication and mediation for roaming between hotspot networks and to/from 3G networks. The revenue will likely be calculated as a percentage of this revenue flow. Clearinghouses may also provide settlement and network management services, but have neither wireless facilities nor subscribers. Market Model

49 WiFi Technology 47 Managed WLAN Service Provider: - Many enterprises will opt for as a managed service, opening up opportunities for carriers to act as the managed WLAN service provider. Enterprise-wide WLAN deployments can be quite complex. Enterprise IT departments may, simply, not have the time or expertise to deal with issues such as proper antenna placement, channel selection and security. This creates an opportunity for carriers to bundle WLAN managed services with their existing connectivity services, particularly since many carriers already have customer premises equipment (CPE) in place. - As a provider of Managed WLAN Service, his focus is on the enterprise, installing and managing WLANs for organizations. As part of his service, he manages authentication and access services, allowing enterprise employees to reach the enterprise's private network. - One can also operate the managed WLAN as a hotspot, allowing visiting business partners such as customers or suppliers to reach the Internet or tunnel to their home network, through the enterprise WLAN. Market Model

50 WiFi Technology 48 Key Revenue Opportunities & Operational Considerations Phase 1: Basic WLAN Access Revenue Flat-rate billing Bundling with DSL, Dial, 3G Phase 2: Supplementary Services Usage sensitive pricing Pay-per-use access Bundling with services Phase 3: Seamless Access, Service & Management Charging and settlement for service portability Services Quality of service guarantees Network based VPN Download user profile to visited hotspot Voice over WLAN

51 WiFi Technology 49 Summary In this section, we presented two case studies from two large organizations that work in WLAN solutions. The two case studies may be a little similar, which indicates that the business model of the WiFi is nearly clear in the market. In Boingo company, they segment the WiFi industry into 4 layers: o The Venue Layer consists of the companies that own the physical locations where hot spots will be deployed. o Companies in the hot spot operators Layer contract with venues to deploy Wi-Fi gear and operate commercial hot spots. o Because of the inherent fragmentation of hot spots, HSOs will partner with companies on the Aggregation Layer to provide roaming, software and settlement services and drive traffic to their networks. o Aggregators in turn enable the Brand Layer companies to offer Wi-Fi access to end users. Bridgewater Systems proposed a business model and defined its players as: o WLAN Hotspot Provider WLAN hotspot providers are deploying hotspots at premium public venues to take advantage of the increasing subscriber demands for the high-speed access o WLAN Service Provider WLAN Service Provider offers WLAN access as an add-on service for the existing subscribers, and to attract new subscribers. o WLAN Clearinghouse A Clearinghouse focuses on brokering relationships - and in particular roaming agreements - between WLAN hotspot providers and WLAN service providers o Managed WLAN Service Provider The provider of the managed WLAN Service Provider focuses on the enterprise, installing and managing WLANs for organizations. As part of his service, he manages authentication and access services, allowing enterprise employees to reach the enterprise's private network.

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53 WiFi Technology 51 Regulators Trends Regarding WiFi The spectrum regulatory body of each country restricts signal power levels of various frequencies to accommodate needs of users and avoid RF interference. Most countries deem WLANs as License free. In order to qualify for license free operation, the radio devices must limit power levels to relatively low levels. So it will be demonstrated shortly the status of some regulators. USA: - In the U.S., the FCC (Federal Communications Commission) defines power limitations for wireless LANs in FCC Part Manufacturers of products must comply with Part 15 to qualify for selling their products within the U.S. Regulatory bodies in other countries have similar rules. - Part provides details on limitations of EIRP (equivalent isotropically radiated power). EIRP represents the total effective transmit power of the radio, including gains that the antenna provides and losses from the antenna cable. - Radio NICs in user devices and access points generally have omni-directional antennas that propagate RF energy in most directions, which maximizes connectivity for mobile applications. When using omni-directional antennas having less than 6 db gain, the FCC rules require EIRP to be 1 watt (1,000 milliwatts) or less. - The FCC eases EIRP limitations for fixed, point-to-point systems that use higher gain directive antennas. If the antenna gain is at least 6 dbi, the FCC allows operation up to 4 watts EIRP. This is 1 watt (the earlier limitation) plus 6 db of gain. For antennas having gain greater than 6 dbi, the FCC requires you to reduce the transmitter output power if the transmitter is already at the maximum of 1 watt. The reduction, however, is only 1 db for every 3 db of additional antenna gain beyond the 6 dbi mentioned above. This means that as antenna gain goes up, you decrease the transmitter power by a smaller amount. As a result, the FCC allows EIRP greater than 4 watts for antennas having gains higher than 6 dbi. - As it could be see, the deployment of a wireless LAN for typical mobile applications using omni-directional antennas is fairly straightforward in terms of EIRP limitations. The problems come into play when installing systems to connect buildings within a metropolitan area. In this case, attention is paid to the FCC rules. - FCC modified Part 15 of its rules to permit new digital transmission technologies to operate in the MHz (915 MHz), MHz (2.4 GHz), and MHz (5.7 GHz) bands under the current rules for spread spectrum systems. The Commission also provided flexibility in the design and operation of frequency hopping spread spectrum (FHSS) systems in the 2.4 GHz band and eliminated the processing gain requirement for direct sequence spread spectrum (DSSS) systems. - The Part 15 rules permit the operation of DSSS and FHSS systems on a nonlicensed basis where the power density of the transmission signal is reduced,

54 WiFi Technology 52 which lowers the possibility that the transmitter will cause interference to other devices operating in the band.(annex 1 ) Europe: All WLAN equipment to be used in the 2.4 GHz band must comply with the European Commission s Radio and Telecommunications Terminal Equipment Directive,1999/5/EC (R&TTE) governing radio equipment self-certification and conformity in accordance with the applicable standards (ETS for WLANs). National regulators are responsible for controlling the use of the 2.4 GHz band in their respective jurisdictions. As a result, regulation varies across different European countries, with dramatic results on the development of the WLAN market place. The most advanced markets are in the Nordic region. Finland, Norway and Sweden: Public access WLANs have moved beyond the pilot phase and are being deployed on a commercial basis, where the services are 50% cheaper than ADSL. Now in Norway, they are launching a hybrid WLAN/GPRS service to offer roaming between WLANs and more extended GPRS networks. France: The major impediment to the growth of the WLAN market in France is the limited amount of frequency available and the associated potential problems of frequency saturation, interference and service degradation. That is because the concerned frequency bands are managed jointly by the Authority and the Ministry of Defence. When the 2.4 GHz band is released, it shall be possible to use an Effective Isotropic Radiated Power (EIRP, thereby including the antenna gain) of 100 mw on the entire band. From 2004, on the entire territory and on the entire band, the effective isotropic radiated power (EIRP) authorised shall be 100 mw inside the buildings and 10 mw outside the buildings. On this date, for frequencies comprised between 2400 to 2454 MHz, the effective isotropic radiated power authorised shall be 100 mw inside and outside the buildings. The Authority of France has oriented its action in favour of opening the WLAN to public according to two priority criteria: - The establishments of networks open to the public as part of local development projects: These networks shall be established experimentally. These experiments shall allow testing, on a real scale, the performance of this technology in terms of service and usage, as well as the economic models that can be obtained from such projects. In addition, the Authority shall monitor these experiments. - The installation of WLAN access terminals in hotspots:

55 WiFi Technology 53 The installation of WLAN in public places consists in connecting the external terminals to the network open to the public. These terminals are located beyond the termination point of the network. As soon as the decision relaxing the use of frequency bands is taken by the Authority and approved by the Ministry in charge of telecommunications, such installations shall not require an individual authorisation in the following two cases: -The terminal is connected directly to an existing network open to the public. -The terminal is connected to the network open to the public by an operator already authorised. In a certain number of cases, the installation of WLAN access terminals may require the establishment of a new network or the use of an existing private network by a player not having the operator authorisations. The Authority desires to find a satisfactory regulating solution that is sufficiently flexible to meet the needs of the market and to allow the experiments to start rapidly. These networks can be granted an experimental authorisation for networks open to the public. It is proposed to implement a simplified procedure for processing applications for experimental licenses following the spirit of a future general authorisation system. - Results of Experiments must include: - A technical evaluation, presenting the number of users of the services, peak and average output observed per user, the traffic graphs, the measures taken by the applicant to ensure continuity of services network and the security, particularly against pirating as well as the confidentiality of communications. He shall present the user authentication, metering and billing procedures. - An evaluation of usage for studying effective use of the resources as well as a satisfaction survey conducted among the customers and other inhabitants of the coverage zone. This survey shall evaluate the possible jamming caused by the experiment and shall be followed by a monitoring and corrective procedure. - An economic review for evaluating the commercial conditions of the offer (number of subscribers, cost of services) as well as economic feasibility of the project.

56 WiFi Technology 54 England: The WLANs market in England is in danger due to the following: 1- The 2.4 GHz band is inherently polluted. It is used by applications as diverse as microwave ovens, cordless phones and license-exempt WLAN equipment. In the UK, the band is also used by the Military and for licensed applications such as outside broadcasting and electronic newsgathering. The proliferation of WLAN services, along with other applications, in this band could therefore lead to congestion particularly in some areas, e.g. business centers, likely to attract ISPs deploying public access WLAN services. 2- ISPs would not be able to provide guarantees regarding quality of service, or protection from interference for their commercial services. From the perspective of good frequency management, this is reason enough to not allow commercial deployment of public access WLANs. 3- The issues raised in the UK about the 2.4 GHz band congestion, are also directly relevant to the on-going consideration in other European countries, so there is a direction to move to the 5 GHz band for next generation WLAN applications. to achieve higher performance and more resilience to interference. This up-band migration will ease congestion in the 2.4 GHz band and free frequency for use by home users and Bluetooth applications. 4- Another argument against commercial WLAN applications is that unlicensed use of the 2.4 GHz band will give ISPs an unfair competitive advantage in the provision of wireless data services. Providers of 3G networks, as well as fixed wireless access networks, have spent enormous sums to secure licenses for their wireless services. In the UK, Kingston Communications and Atlantic Telecom have also been awarded licenses to provide public telecoms services on a regional basis in the 2.4 GHz band. Asia: Information from other administrations in this region is difficult to obtain however there is some information regarding arrangements in Japan which support or could support the use of IEEE devices. The Japanese spectrum regulatory arrangements support unlicensed low power services in the 2.4 GHz band on specific frequencies. They also support unlicensed low power data transmission systems in the band MHz band. The IEEE standard includes channel selection arrangements specifically for operation in Japan. There appears to be little overlap with current arrangements in Europe or America. The band appears to have been segregated to differentiate between other equipment and data specific communications devices, including IEEE devices. In the band MHz the Japanese have a frequency allocation for unlicensed low power transmission systems limited to indoor use but no allocation in the band MHz. The band MHz has an allocation to the unlicensed low power service (Dedicated Short Range Communication services). The bands MHz and MHz are used for indigenously developed ultra high speed WLAN service and a mobile data access service. They could potentially support IEEE a devices operating with fewer channels than are used in the USA, however, here is insufficient data available to confirm this arrangement.

57 WiFi Technology 55 Summary This section demonstrates the status of some regulators. USA: - In the U.S., the FCC (Federal Communications Commission) defines power limitations for wireless LANs in FCC Part which provides details on limitations of EIRP. - It also specifies the operation of DSSS and FHSS systems on a non-licensed basis, and this done by specifying the channel bandwidth, the type of hopping(in FHSS), etc. And this reduces the power density of the transmission signal which lowers the possibility that the transmitter will cause interference to other devices operating in the band Europe: All WLAN equipment to be used in the 2.4GHz band must comply with the European Commission s Radio and Telecommunications Terminal Equipment Directive,1999/5/EC (R&TTE) governing radio equipment self-certification and conformity in accordance with the applicable standards (ETS for WLANs). Finland, Norway and Sweden: - The most advanced markets are in the Nordic region. - Public access WLANs have moved beyond the pilot phase and are being deployed on a commercial basis. - Now in Norway, they are launching a hybrid WLAN/GPRS service to offer roaming between WLANs and more extended GPRS networks. France: - The major impediment to the growth of the WLAN market in France is the limited amount of frequency available because the concerned frequency bands are managed jointly by the Authority and the Ministry of Defence. - The Authority of France has oriented its action in favour of opening the WLAN to public according to an important criteria, which is the establishments of networks open to the public as part of local development projects, which shall be established experimentally, and the Authority shall monitor these experiments. Japan: - They support unlicensed low power data transmission systems in the band MHz band. - The IEEE standard includes channel selection arrangements specifically for operation in Japan. There appears to be little overlap with current arrangements in Europe or America. - In the band MHz the Japanese have a frequency allocation for unlicensed low power transmission systems limited to indoor use but no allocation in the band MHz. - The band MHz has an allocation to the unlicensed low power service (Dedicated Short Range Communication services).

58 WiFi Technology 56 Annex 1 Part of FCC

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