How to Play the Wireless Web

So who will make money in Wi-Fi? Unfortunately, the prices of Wi-Fi chips and access points are plunging and the revenue for the entire nascent industry isn't expected to top $3 billion until 2006, according to an industry research group. That leaves a cloud over battered Wi-Fi chip makers Intersil(ISIL) and Broadcom(BRCM), and even microcap hotspot aggregators like GRIC Communications(GRIC).

But Mark Anderson, publisher of the influential Strategic News Service technology trends letter and a longtime booster of the technology, said he thinks surprise winners could be the likes of Global Crossing, WorldCom and Level 3 Communications(LVLT), since vastly higher broadband usage would finally get their fiber-optic networks' usage up to levels that make economic sense. "Wi-Fi goes around the regulators and the monopolists to get broadband to consumers, which has to happen for the Internet backbone to be used more efficiently," he says.

If broadband speeds greater than 2 Mbps on average are achieved, thus allowing video advertising, he added, all the ad-based dot-com business models that were annihilated in the past three years might be reawakened.

Over the next year, I will follow the progress of Cometa and the Boxer-Allen bill and monitor the Wi-Fi movement. If you have any ideas on which public players are the most likely to make the best bets for investments in the space, let me know at [e-mail] and I'll pass on the suggestions in a future column.

In the meantime, if you care about the prospect of affordable, widespread wireless broadband, write to your representatives in Congress and encourage them to back the Boxer-Allen legislation when it surfaces in 2003.

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