Twenty-two-year-old Hasanen Nawfal studies computer science at a private college in Baghdad, but he may be learning more on the streets. He and his buddies honed their computer skills looking for ways to circumvent the censorship of Saddam Hussein. When most Web services were banned, they accessed the Internet by hacking into the government network. Now they've picked up a new hobby: "war driving," or stealing other people's wireless bandwidth while driving past with a laptop. The practice has become popular among Baghdad's increasingly high-tech denizens. "Hijacking wireless networks has become a bad habit for us," says Nawfal. "All you need is to be about 100 meters away from the target access point," he says. "Then you sniff and decode the packets."

Baghdad's worsening security has crippled efforts to reconstruct fixed-line telephone networks--only about a third of the million or so lines have been restored--to say nothing of complicated fiber and cable systems. Cell phones and to a lesser extent Wi-Fi have become indispensable tools for thousands of Iraqis, journalists and U.S. officials. Although Baghdad doesn't have the Wi-Fi hotspots of San Francisco or Seoul, it is arguably the most wireless-dependent city on the planet.

Independent Iraqi entrepreneurs do a brisk business providing Wi-Fi to Iraqi and foreign customers. More than 35 companies sent in over 100 bids for rights to construct the country's future commercial-telecom industry, including what analysts believe will be a huge wireless component. The technology has already caught on with people who have had hard times with cable connections. "We used to have a DSL line that would go down for days at a time," says Adam Davidson, a correspondent for U.S. public radio. He switched to wireless. Soon his house's six tenants were surfing the Net on Wi-Fi, beamed to a receiver connected to a satellite dish on the provider's roof.

Although analysts say that the market for cell phones and Wi-Fi could reach $1.2 billion by 2008, commercial services haven't taken hold. That doesn't mean there's no innovation. The U.S. military is working up emergency networks for Baghdad's police and firefighters. After all, Baghdad is already a hotspot as it is.