Intel, IBM and three of the nation's largest mobile carriers have begun discussions to form a separate company that would provide nationwide high-speed wireless data services based on the 802.11b, or Wi-Fi, wireless LAN standard. The effort is called Project Rainbow.
Laura Anderson, a spokeswoman for Intel Capital, Intel's investment arm, said that the company views the development of a nationwide public-access wireless LAN "as an interesting area". She added that Intel Capital is considering investments in "a couple of companies that can put wireless LANs together to make them into a wireless WAN".
IBM already offers a product called the Everywhere Wireless Gateway, which lets users roam from mobile to wireless LANs. Analysts said this is an essential architectural element for any mobile company considering a move into wireless LANs.
The mobile carriers said to be involved in the Project Rainbow talks include AT&T Wireless Services, Cingular Wireless and Verizon Wireless. All three declined to comment.
But Mark Siegel, an AT&T spokesman, said Wi-Fi is viewed "as a complementary technology for us, and we are looking to see where it fits in".
Craig Mathias, an analyst at Farpoint Group, said he has no doubt that one or more mobile carriers will launch nationwide public-access wireless LANs. "We could have as many as five networks," he said.
Dennis Eaton, chairman of the Wireless Ethernet Compatibility Alliance, an industry trade group, said that large, well-heeled players are needed to fully develop the public-access wireless LAN market.
"Right now, coverage is sort of spotty," Eaton said, adding that the problem could be resolved by a nationwide network backed by mobile carriers and equipment manufacturers. Any such network would take at least two years to develop and deploy, he added.
Intel Capital has already made investments in six wireless LAN start-up companies, Anderson said, and it intends to continue making investments in emerging wireless technologies. Two of the companies, STSN and iPass, are focused on the public-access wireless LAN market, Anderson said.
IPass provides global, remote access to enterprises and offers users access to 120,000 dial-up and hotel room Ethernet connections and 400 wireless LAN "hot spots" worldwide, according to spokesman John Sidline.
When asked about Project Rainbow, Jon Russo, vice-president for marketing at iPass, said he expects "larger companies to join a market currently dominated by smaller start-ups, which are driving growth in this industry".
Christian Gunning, a spokesman for Boingo Wireless, which offers public-access wireless LAN service in a few areas, said his company welcomes Project Rainbow.
"We think the concept is great," Gunning said. "Any sign that large companies are taking an active interest in Wi-Fi is good for the industry."