What’s up for the Internet in 2003?

Eat your heart out, Miss Cleo. Our forecast for the Internet in 2003 is based on much more than psychic insight or a crystal ball.

Among the predictions: faster, more reliable service, both wired and wireless; monthly dial-up charges that go up as the volume of spam goes down; and gadgets like a wristwatch through which your spouse reminds you to pick up a quart of milk on your way home.

Clearly, the Internet has more in store for us than spy-camera pop-up ads and tribute Web sites to rapper Eminem.

Bandwidth’s Long Boom

Broadband Internet access into the home will continue to drive Internet adoption in 2003, said Jed Kolko, senior analyst at Forrester Research Inc. Whether in search of faster Web browsing or the capability to link a growing cadre of entertainment devices, more of us will sign up for high-speed Net access at home in 2003.

By this time next year, 23.3 million households will have broadband connections, according to an EMarketer Inc. report. That’s a 38 percent jump from the 16.8 million broadband-equipped households in the United States today.

Give it another year, and broadband users will overtake the number of dial-up customers in 2004, Kolko said.

If you haven’t switched by then, you’ll get a financial push to do so: Dial-up access will jump as high as US$40 monthly in 2004, said Vernon Keenan, Internet analyst with Keenan Vision Inc.

“The real cost of bandwidth is going to start to hit the wallets of dial-up users,” Keenan said. Higher dial-up cost won’t impact broadband users, who already pay a premium for higher speeds, he said.

Why higher dial-up prices? The telecom meltdown that drove dozens of Internet backbone providers out of business and into bankruptcy will finally be billed to consumers, Keenan said. Also, broadband may become more inviting when it bans spam; as backbone providers start skimping on bandwidth, they may be motivated to block the massive amounts of junk e-mail that sap much of their network capacity.

Something in the Air

Also, Internet access will take flight, whether from your living room or a city block. Wireless technology – Wi-Fi, or 802.11 – is among the most promising for 2003, according to analysts.

Soon you’ll be able to connect wirelessly in many more places, thanks to Wi-Fi companies like Cometa Networks and Vivato Inc.

AT&T Corp., IBM Corp., and Intel Corp. recently jointly launched Cometa, hoping in 2003 to make wireless Internet access as commonplace as Starbucks in Seattle (which, incidentally, is also a hotbed of hot spots).

By the end of 2003, Cometa expects to have about half-completed its network, rolling out 5,000 Wi-Fi hot spots in 50 U.S. metropolitan areas, said Steve Harris, Cometa’s vice president of corporate affairs. By 2004, the company wants hot spots to be so common in those 50 markets that you will never be more than a five-minute walk from wireless Internet access.

Meanwhile, a start-up named Vivato is working on 802.11 antenna technology that boosts the range of a Wi-Fi hot spot from the current 300 feet to as far as 4 miles.

Couple Vivato technology with Cometa and a number of burgeoning Wi-Fi initiatives like service provider Boingo Wireless Inc., and the result resembles a cellular network, said Howard Locker, chief architect for IBM client systems.

On the device side, semiconductor giant Intel plans to unveil in 2003 a wireless-enabled chip, code-named Banias, that integrates Wi-Fi capability into notebooks and other mobile devices. Within three years, as many as 30 million laptops and gadgets could be wired for Wi-Fi, Intel estimates.

Locker said 2003 will be the year of trial hot-spot business models, as many new services test consumers’ appetite for fee-based services. Airports, for example, will charge their captive customers. Meanwhile, a cafe might offer free access as an extra lure.

The Net Begets the Gadget

Thanks to faster, more reliable wireless Internet access, whether next-generation cellular or Wi-Fi, networks will handle more sophisticated tasks.

Cometa’s Harris expects such applications as fast-food restaurants accepting orders placed through Wi-Fi-enabled PDAs (personal digital assistants) instead of the drive-through intercom. Or when you hear a song you like on the car radio and you’re in a Cometa Wi-Fi hot spot, you can download the entire CD to a digital media player in the car.

“Devices will evolve and so will the applications on those devices,” said John Ankcorn, principal research scientist at Hewlett-Packard Co.’s Hewlett-Packard Labs. Devices will be location-aware, bandwidth-smart, and able to adapt to your needs, he said.

The next killer app for the wireless Internet is the location-based community, said Hank Nothhaft, chief executive officer of device maker Danger Inc. In 2003, new services will let you rate your neighborhood pizza parlor the same way you rate a seller on EBay or a product on Amazon.com, Nothhaft said.

“If the pizza stinks, a location-based service will allow you to rate the food so anyone walking by will be forewarned,” Nothhaft said.

Promoting these new functions will be wireless prices that come down from the stratosphere. Look for wireless data plans to debut in 2003 priced at about US$15 monthly for 10MB of data, Nothhaft predicted. Monthly fees today run about US$40.

“Wireless Internet only becomes ubiquitous when service plans are affordable,” agreed Michael Gartenberg, research director at Jupiter Research.

Keeping Things in Context

Once wireless-data prices drift down, we will see a proliferation of location-based services married with relevant data, Gartenberg said. He envisions a car device that provides voice-enabled driving directions by pulling data from the Net, a PDA that offers automobile price comparisons because you’re at a car dealership, or a cell phone that links to your bank account so you can tell whether you can afford that new projection screen TV.

Wristwatch maker Fossil Inc. is working on a PDA wristwatch that can connect to a cellular network. Along with PDA functions, the Fossil wristwatch will support text messaging so you can receive a message anytime, anywhere, via your wrist — no clunky PDA required, said Donald Brewer, Fossil’s vice president of technology.

Microsoft has been tight-lipped about its network technology called Smart Personal Object Technology (SPOT). However, at a recent technology conference, Microsoft Chairman Bill Gates teased the audience with a few hints.

In 2003, Microsoft will push SPOT technology that uses a wireless Internet connection to automatically update everything from keychains to refrigerator magnets to wristwatches with contextually relevant information, according to Gates. For example, Microsoft describes an alarm clock with an online link to an atomic clock and weather feeds so you know exactly what the time and weather are before you get out of bed. Gartenberg goes further, saying that by 2004 our daily routine will be filled with “smart objects” that have been enhanced with contextually relevant information.

In 2003 we may still be decades away from creating the kind of interaction between computers, the Internet, and people that is portrayed every summer by Hollywood. The ubiquitous Internet may not yet be real, but the new technology won’t be boring.