AT&T Launches Times Square WiFi Hotzone

Pressed to find a solution to the 5,000% growth in its mobile data traffic, AT&T said Tuesday it is exploring establishing public Wi-Fi "hotzones" to relieve pressure on its mobile phone network, most of it caused by iPhone users.

AT&T said it has launched a "pilot deployment" in New York City's Times Square, the nation's symbolic public crossroads.

Wi-Fi hotspots have been proliferating in New York City, but most of them are for use by customers already paying for other services. For instance, Cablevision, Comcast, and Time Warner Cable currently offer Wi-Fi service across a vast New York-New Jersey-Connecticut region, but users must already be a paid customer of one of the providers.

AT&T itself has some 20,000 Wi-Fi hotspots that can be utilized by users who have an AT&T service. The Times Square service is free to AT&T customers with certain smartphones, laptops, and AT&T Internet plans.

With the Federal Communications Commission already sounding the alarm of an approaching "spectrum crisis" due largely to the rapid proliferation of smartphones and their insatiable thirst for data, carriers are seeking ways to encourage subscribers to use non-carrier spectrum. The FCC has suggested that Wi-Fi and femtocells be utilized to ease the spectrum crunch. AT&T recently began marketing its 3G MicroCell femtocell devices to its customers.

AT&T, which has an exclusive contract to market Apple's popular -- and data-guzzling -- iPhone, has seen its mobile traffic grow 5,000% in three years and the New York City area has been particularly affected.

"With this pilot AT&T Wi-Fi hotzone, we're examining new ways to combine our Wi-Fi and 3G networks to help ensure that AT&T customers in Times Square always have a fast mobile broadband connection," said John Donovan, AT&T chief technology officer, in a statement. "It's another example of how AT&T is exploring the ideal blend of technologies to maximize the mobile experience for our customers in New York City."

Verizon Wireless offers a public area Wi-Fi service to many of its customers through a partnership with Boingo. If Verizon eventually markets an iPhone, as is rumored, the development would take at least some of the spectrum pressure off AT&T.