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WiFi hotspots refer to public locations, such as libraries, hotels, restaurants or coffee shops that offer free wireless Internet connection to its customers. The hotspot's server is already connected to the Internet and has a wireless router installed as well. The wireless router allows the users to connect to the network and access the Internet for free. Keep in mind that this is a public connection open to anyone, which might compromise your computer security.
Read more: http://www.ehow.com/how-does_5427635_do-wifi-hotspots-work.html#ixzz2yi4Tu5dJ
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