What is a WiFi Hotspot?
A WiFi Hotspot is an area that has WiFi access to the Internet. The term Hotspot is now used interchangeably for the both area where the signal is available and the device (WiFi Router or WiFi Access Point) that is broadcasting the signal. Likewise the terms "WiFi Router" and "WiFi Access Point" (AP) are often used interchangeably.
Simple Hotspot – The Open or Unencryped Router.
The easiest way to run a Hotspot is to purchase a local WiFi router, hook it up to the Internet and set the wireless security settings as "Disabled" or "Open". This would allow anyone to access the Internet and potentially access other computers connected to the router. You would have very little control over who connects and how much bandwidth is used. If you have no security concerns and are not looking at making any money this is a simple way to go. Cost ~ $ 50-100
Simple Hotspot – The Encrypted Router with WPA or WEP
Another option is to enable security on the router, there are two types of WiFi security WEP and WPA – WPA is the newer and more secure. With both types you specify a "key" which is a code you need to connect. You could tell your customers what the WPA or WEP key is and they could connect. This offers some security and I guess you could change the WPA or WEP key every day, however there is nothing to stop someone telling their friend the key so it's not ideal for generating revenue.
Almost all commercial Hotspots are Captive Portals, this appears as an Open or Unencrypted WiFi signal but then redirects any traffic to a specific web page called a "Splash Page" where your often asked to login or purchase internet access. This is a clever way of doing things as most laptops will automatically connect to an open WiFi signal, then when a customer runs Internet Explorer (or which ever Web browser they use) they are sent to your splash page no matter what site they try to connect to.
When discussing Captive Portals the term "Walled Garden" is often used. This is a website or websites that a customer can connect to without paying. For example a customer connecting to your Hotspot will be diverted to the Splash Page. They will then be given a choice of paying for internet access or access free websites you have chosen, for example your hotel website or local attractions websites.
Hosted Hotspot Services.
There are several companies offering business owners a hosted hotspot service. These services typically involve installing a modified Linksys WRT54GL router on the customer promotions that redirect traffic to a splash page hosted by the hotspot company. The hosting company normally also processes payment for Internet access. These services typically work on a revenue sharing basis where the hosting company pay the hotspot owner a percentage of the income from the hotspot. Some companies also charge the hotspot owner a monthly fee for using their services.
DIY Captive Portals.
If you do not want to use a hosted hotspot solution there are a few options for a DIY Captive Portal. There are some commercial software packages that run on Windows or Linux PCs and act as a captive portal, with these the PC has to be turned on 24 hours a day. Another approach is to run the Hotspot software on the WiFi router itself, replacing the stock firmware with a Linux based OS such as OpenWRT or DD-WRT. The challenge here is to fit the software required on the small amount of memory available on a domestic router.