Can Wi-Fi Work Citywide in New York?

Imagine if smartphones always worked as fast as home Wi-Fi networks, and no one had to pray that a cellular signal was strong enough to send an e-mail or retrieve a map. A company called Towerstream (TWER) hopes to make that dream come true for New Yorkers in late June, when it turns on a network of about 1,000 wireless routers—souped-up, weatherproof versions of the Wi-Fi devices in millions of homes. The goal, says Towerstream Chief Executive Officer Jeff Thompson, is to provide a superfast mobile network that covers seven square miles of Manhattan, and sell access to the system to wireless carriers that can use it to fill in areas prone to spotty service. (Lots of those in New York.)

In theory—the company hasn't announced any deals with carriers—consumers may never know they're using Towerstream's network. Behind the scenes, Carrier X would seamlessly switch a customer's smartphone or tablet to Wi-Fi mode when that person comes within range of one of Towerstream's hotspots, and the connection speed would go up dramatically. During a demonstration recently on the corner of West Broadway and Broome Street in New York's SoHo district, an iPhone's data speed leapt from .35 megabits per second to 26 Mbps. That's fast enough to stream high-def video, and much faster than most home connections in the U.S.