Reporter: At San Francisco International Airport, Diana Shea, a trade show specialist at a high-tech Silicon Valley firm, doesn't want to waste time while waiting for her flight. In the food court, she has logged onto the Internet to transact business without attaching her computer to a wire. She is using a technology called Wi-Fi, wireless fidelity. And for her, it has become almost a necessity.
I mean, these days, there's not much you can do if you don't have connection to the Internet. I can connect back to work and get access to my e-mail, all my documents, everything I'm using.
Reporter: Before wireless connections, business travelers who wanted to go online had a tough time.
You'd try to find places where you can get a phone line and dial in, you know, but that's really slow. I mean, you managed as best you could, but this is just so much better.
Reporter: Wireless technology is becoming ubiquitous. To attract travelers, companies like Way Port and T-Mobile broadcast Internet signals in hotels and airports. Those who want to be connected subscribe and pay a fee. Wi-Fi is also now available at certain restaurants, the Seattle Mariners' ballpark, and a few airline flights, and in homes and offices where laptop computers can be moved from room to room, or even outdoors. Here's how it works. The Internet signal that a private user subscribes to and pays for arrives by TV cable or telephone line. Instead of being plugged directly into a computer, it is connected to a device that converts it to radio waves, which are broadcast for a distance of 100 feet or so. Computers equipped with wireless receivers pick up the signals and are then connected to the Internet. Many new computers come with Wi-Fi built in. Older models can use the technology by inserting an adapter card with an antenna into the computer. The equipment that converts and broadcasts the Internet signal costs a minimum of about $100. For some techies, the world of Wi-Fi has become a hobby.
Wow, did you see how many just popped up?
I got, like, three.
Reporter: These two tech workers drove the dark streets of Palo Alto recently, their computers in their laps, searching for free Internet connections. Their laptops pinged as they passed so-called hot spots, where they picked up radio signals from homes and businesses equipped with Wi-Fi.
Okay, here's one. Riley's funky network. Riley's funky network, nice.
So now we're connected to the Internet. We're on. I mean, we can pretty much do whatever we want on the Internet.
Reporter: Scott Croatiaier and Boris Popcoff were doing what's called war driving.
I mean, it blew my mind when I found out that you can be connected to the Internet without any wires, you know, and that these hot spots were popping up everywhere.
Reporter: One research firm predicts that there will be 28 million Wi-Fi users in America this year, and triple that worldwide by 2008. Companies that make wireless equipment expect the technology to take off and revive an industry that has been in the doldrums. Intel recently showed off its wireless system, called Centrino, at this well-attended gathering of high-tech developers. The company, which makes chips for computers, is spending $300 million just promoting its wireless system. Julie Ask, an industry analyst, attended the forum. Says consumer demand for wireless will soon catch up to industry hype. You talk about the hype for Wi-Fi. What has that hype been?
That it will change our lives, that it's the next big thing. And the truth is, it probably is the next big thing. Wi-Fi is huge. I think it's going to be a great big market. I think whether or not it's a great big profit center is left up to the company themselves.
Reporter: Intel is one of very few companies providing wireless access throughout its headquarters. Employees can go online wherever they are. Kurt Senert got the system running. This is like a radio wave coming into the computer here.
There's antennas in the notebook here, and they're connected to the access point in the ceiling. So, I'm on the Internet.
Reporter: For officials of the South San Mateo Fire Department, Wi-Fi means better coordination at an emergency. They are pioneering the use of wireless Internet in fighting fires. Command vehicles have recently been outfitted with Wi-Fi computers, which allow fire officials to talk to each other, control mobile remote cameras placed near the fire, and plan strategy. Richard Price engineered the system.
I do believe that this will become a standard operating procedure in the next year or two. It's inexpensive technology, it's relatively easy to deploy, and it gives us a lot more capability to see all the way around an incident, to see above an incident.
Reporter: But using Wi-Fi brings up questions of security that the fire department has yet to deal with. Last year, the Department of Homeland Security said terrorists could easily gain access to company and government secrets by using wireless Internet. It recommended the government not use Wi-Fi until it became more secure. The department later backed off from that position. But Stanford law professor Jennifer Granick says wireless shouldn't be used for confidential communications until the technology improves.
I think that's a wise thing to do, just not just for our government, but also for individuals and for companies because of security problems in wireless. It may not be the best way to transmit highly confidential data.
Reporter: Arthur Keller, who teaches computer science at the University of California in Santa Cruz, agrees that wireless connections can be breached.
Inherently wireless networks are not as secure as wired networks because you can listen in to the network. It is relatively easy to break into a Wi-Fi network, and either to snoop on our computers or to steal our Internet access.
Reporter: Keller is also concerned that a hacker could use someone else's wireless internet connection to spread a computer virus or steal personal information. That's one reason he refuses to have Wi-Fi in his own home.
Reporter: Intel admits that security is a valid concern and was a problem. But now the company says business and home networks can be made secure. Popkoff and Crochere found that while war driving, most wireless users don't bother with even the simplest security fixes like passwords and encryption.
It's easy, it's so easy to lock your network. It's password protected. Basically we can see the network, but we can't get access to it because it's locked. You kind of almost have to assume that people who don't lock it are welcoming you to at least use it.
All right, this is the main Palo Alto Freenet web page.
Reporter: Paul Gregg welcomes everyone to use his wireless connection for free. As founder of Palo Alto Freenet, he and cohorts in other cities say Internet access costs too much, and should be available to everyone. So that's the antenna up there?
Reporter: A big antenna on Greg's roof sends his Internet signal more than a mile.
It's like, you can imagine there's like a donut of signals going out.
Reporter: Freenet has put another powerful antenna on top of a tall redwood tree in a nearby neighborhood, serviceable only by climbing the tree. The signal emanates from a single Internet Service Provider.
If I can take a... you know, a single connection and show that I can hook up dozens of people, or even treads of... Hundreds of people to it, that it's much better than having to drag wires all over the place.
Reporter: Greg admits that if more people, or even hundreds of people began sharing their Internet connections with multiple users, it could have economic implications. Several large Internet Service Providers, companies like Comcast, Earthlink, S.B.C., and Verizon, hope to play a profitable role in the expanding wireless market. Yet they are uncomfortable with their subscribers sharing their Internet service for free, although they don't like to talk about it publicly for fear of being perceived as greedy. Granick, who directs the Stanford Center for Internet and Society says enforcing rules against sharing Internet connections is difficult.
It would be kind of like if a cable TV company said, "We don't want you to have your friends over to watch TV with you. Each one of you has to buy a separate cable TV subscription."
Reporter: The use of wireless technology is so new, Granick says, that the law regulating its use is undeveloped and technology is changing and expanding.
This is an access point, so here...
Wi-Fi entrepreneurs are betting that this technology will soon control a plethora of economic gadgets in and outside the home. Appliances, TV's, stereos, even vending machines, all connected to the Internet any time, any place, without wires.