APPLICATION CASE STUDY:
                                VERIZON HOTSPOTS
                                  May 28, 2003

By Michael F. Young

Introduction

On May 13th, Verizon launched its wireless broadband Internet access service in
New York City as a free feature for Verizon DSL customers. Verizon's Wi-Fi
HotSpot service is available from Central Park to Battery Park in Manhattan,
Brooklyn Heights and Queens. Verizon Online customers can check sports scores,
stocks, and e-mail from more than 150 hotspots.

Verizon's New York Wi-Fi HotSpot service garnered national and European
attention. YDI played a part in Verizon's announcement as the primary wireless
equipment provider. In less than six weeks, YDI was able to test, build, and
ship the first production unit meeting Verizon's unique requirements.

Below is a snapshot of YDI's efforts to quickly activate 150 hotspots in New
York City using existing Verizon public phones.

The Project

YDI began working with Verizon in late 2002. At the time, Verizon was
investigating the feasibility of enabling wireless Internet access in
residential complexes. In January 2003, Verizon retained YDI to assist with
Verizon's New York project.

Based on the wild popularity of sharing one DSL connection via wireless routers
in homes and small businesses, Verizon decided to take the service to the
street, for customers on the go. The YDI team developed a wireless solution
using Wi-Fi compatible 802.11b systems.

Verizon's goal was two fold -- retain current customers and attract new ones.
Giving customers untethered access to the Internet increases the value of its
DSL service and differentiates it from competitors' offers.




The Strategy

The strategy was to leverage underutilized existing public phones with little
incremental investment. To accomplish this, Wi-Fi compatible access points were
collocated with existing strategically placed Verizon public telephones, making
those locations "Wi-Fi microbase stations" serving about a 300 feet radius.
(Note: The creation of a HotSpot does not interfere with the normal operation of
the payphone). Installing access points at payphones is quick and
straightforward since these payphones have electric power, wireline access to
the telephone network for backhaul connectivity, and provide some degree of
protective shelter for the equipment. Often the selected sites are sufficiently
tall to permit the installation of the antenna above pedestrians and most street
traffic, which results in a greater operating range.

With the proper equipment installed at the payphone, an outdoor HotSpot is
created with the Wi-Fi access point. Since there are many payphones in most
cities, it is relatively easy to select those that needed to be equipped with
the wireless equipment to "illuminate" the desired geographical areas and
provide over-lapping coverage. Thus, any computer or PDA equipped with a Wi-Fi
compatible wireless LAN device would have ubiquitous high-speed wireless
Internet access anywhere in an enabled metropolitan area.

Verizon Online DSL customers who are on the move (for example, sitting in a
park) can use the HotSpots with Wi-Fi equipped laptops and PDAs to gain access
to the Internet, whether they live in the city or are visiting. Just as we are
seeing a migration of people using their cell phone as their primary phone, the
opportunity exists for Verizon's HotSpot offering to become a significant
catalyst for increased Internet usage supplementing traditional dial up and
tethered broadband access.

The Technology

YDI developed a Wi-Fi solution for Verizon based on the companies' specific
needs. The specifics of the technology are proprietary.

The Future

We defer to Verizon for information on their future plans but some general
industry developments are apparent. More and more new laptop computers, PDA's
and next generation cellular telephones come with Wi-Fi compatible devices
installed. Wi-Fi devices incorporating VOIP (voice over Internet protocol)
capabilities, which permit the wireless transmission of voice traffic, are
becoming widely available. In general, the amount of Wi-Fi enabled devices is
rapidly increasing. Picture if you will, a world where every one had a cell

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phone but there were almost no cellular base stations with which to connect.
This should give you an idea of the pent-up demand for WiFi infrastructure
build outs. The demand for broadband wireless Internet connectivity utilizing
license-free frequencies is exploding. Verizon sees this grassroots groundswell
and is building out infrastructure today to respond to this demand. YDI builds
the equipment that lets them do it.

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