When we first heard about a dual-mode CDMA/GSM-capable mobile hotspot, we imagined a device that would play nice with foreign GSM networks on trips overseas. And this is true—if those networks are Verizon-contracted roaming networks. And if you are willing to pay a premium price to use them.

The age of hotspots

A mobile Wi-Fi hotspot is one of the easiest ways to bring mobile Internet service to a variety of portable devices. Since Wi-Fi is a universal standard built into almost every laptop, netbook, portable game player, tablet, and smartphone being manufactured today, a mobile hotspot makes the mobile Internet available just about everywhere to all of these devices, almost everywhere.

Sadly, all of these hotspots are limited to a specific carrier and cellular technology, which is frustrating for global travelers who would like the same access to the mobile Internet anywhere in the world there is cellular service. It’s particularly frustrating for Verizon customers since the version of 3G used by Verizon in North America (DMA Rev. A) is only poorly available in a world dominated by the other version of 3G, GSM.

Global promise

The Fivespot (made by ZTE) is a global version of the mobile hotspot, supporting both major versions of 3G technology (CDMA and GSM) and laying the foundation for Verizon’s claim to provide global data service in over 200 countries, with more than 120 of these at 3G speeds.

The Fivespot is a small, compact device measuring 3.92 by 2.11by 0.55 inches. It supports the two major global cellular data technologies: CDMA 1xEvDO Rev. A/Rev. 0 (the core Verizon North American service) and the worldwide GSM standards of GSM/GPRS/EDGE and WCDMA/HSDPA/HSUPA.

The Fivespot has a good, robust feature set that serves not only basic but also more sophisticated mobile hotspot applications. It can be used both as a Wi-Fi hotspot and as a USB tethered modem to a laptop.

It has an internal battery to provide up to 4 hours of mobile hotspot service for up to five Wi-Fi users. The battery can be recharged via a separate charger or for road warriors via a mini USB cable from a laptop.

Messy setup

Setup is a more complex than necessary. The need to use a laptop to activate the device limits the Fivespot’s utility for tablet and smartphone users who don’t have, or wish to use, a laptop. The Virgin Mobile MiFi 2200 sets the standard for ease of setup--it requires nothing more than a browser on a Wi-Fi-connected smart device to activate and use the mobile hotspot.

To set up the device, we attached the included USB cable to a laptop and then installed Verizon’s VZAccess software. This software is available for most versions of Windows and Mac OS X and comes on internal Fivespot storage, eliminating the need for a software installation CD.

VZAccess is then used in the Fivespot’s USB wired tethering mode to activate the device on the Verizon CDMA network—essentially as a USB 3G modem for the laptop.

Once activated, the Fivespot is disconnected from the laptop. After you power it down and start it up, it functions as a Wi-Fi hotspot. The Fivespot’s Wi-Fi default SSID and password (printed on the bottom of the device) quickly gives browser access to the configuration Web pages of the device.

The default configuration is perfectly adequate, and once powered up, the Fivespot delivered a high performance bubble of Verizon mobile Internet with no further configuring. The Fivespot provides a full range of firewall and VPN features for more sophisticated applications.

Solid performance

We put the Fivespot through an unusually rigorous performance testing regime, several hundred performance tests with an assortment of Wi-Fi devices in a variety of indoor and outdoor locations in San Francisco.

The device delivered outstanding 3G performance on Verizon’s 3G CDMA Rev. A network, matching the performance of the category-defining Novatel MiFi and exceeding the performance of several smartphones that double as mobile hotspots.

We found that the laptop reliably had over 1.5 megabits per second in average download speed via Wi-Fi, but that an iPhone 3GS, an iPad, and Sprint’s HTC Hero all achieved only 80 percent of that speed. We suspect that there is some performance issue here with handheld devices, as we have seen a similar throughput problem with other mobile WAN gateways.

We wanted to test the Fivespot not just in CDMA mode, but in GSM mode, as it would be overseas. However, when we tried to replace the Verizon-provided SIM with a data SIM from another carrier, it would not work. We suspect that this is Verizon’s way of making sure you activate the Verizon SIM for roaming when you go overseas.

The catch: steep costs

The Fivespot is available from Verizon Wireless for $100 (after a $100 mail-in rebate) with a two-year contract. Domestic data plans run from $20 for 1GB per month to $80 per month for 10GB of data. Fair enough.

Your problems begin when you decide you want to use the Fivespot outside the United States—the raison d’etre of the device. It would be nice to pop in a (prepaid) SIM card from the local GSM service wherever you happen to be, native data access being far less expensive than roaming access. But Verizon doesn’t allow you to insert other carriers’ SIM cards into the Fivespot for GSM/EDGE/UMTS/HSPA service.

You’re forced to buy out-of-country data access via Verizon’s (often substantially more expensive) mobile data roaming plans. If you are already paying for such service for your global-ready phone, you can’t use the SIM from the phone in your Fivespot; the Fivespot has to have its own dedicated SIM.

The international data roaming plans give you a low monthly data usage allowance, at a high monthly price, and with high overage rates. Here are the two month-to-month plans available:

The $130 per month plan gets you only 100MB of data access per month. Do a few movie uploads or video chat sessions, and before you know it you’re at your limit. And at that point, you face a $5.12 charge for every megabit of data you go over. In the U.S. and Canada, the plan buys you 5GB of data per month, with a 5-cent charge for every megabit of data you go over your plan.

A $220 per month plan gets you 200MB of data service overseas, and 5GB per month of data service in the U.S. and Canada. The overage penalty rates are the same as the $130 plan.

The pay-as-you-go plan for less-frequent global travelers may sound like a good deal, but it has its own perils. First of all, this plan requires that you already have a $60 per month domestic data service contract with Verizon.

The real problem is the cost of data roaming. From the Verizon Wireless FAQ: “PLEASE NOTE: Data Roaming while travelling outside of the U.S. will incur charges as high as $20.48/MB.” So that 32MB MP3 file you pulled down from your Drop.io account during your vacation overseas may have cost you $655.36.

$655.36! Hope you enjoyed it.

There’s got to be a better way. Wouldn’t it be easier and cheaper just to buy a GSM hotspot from a vending machine in the airport when you land at your destination country? For instance, for a week-long trip to Spain, you could buy a prepaid SIM card locally from Orange, and end up paying about $34 for a week of 3G access. But this is the rate for connecting a single device, like an iPad, not for connecting a hotspot.

Macworld’s buying advice

The Fivespot is the forerunner of a new generation of mobile devices that have the innate capability to work on more than one network technology, and on more than one carrier. New mobile hotspots and smartphones with these capabilities will begin to appear in the first half of 2011. And we can hope that the cost of connecting all around the world with a single device will become much less expensive.

There’s nothing wrong with the technology inside ZTE’s Fivespot. The device plainly illustrates how, for now, our ability to enjoy the promise of anywhere/anytime Internet access is limited not by technology but by the business model of the carrier.