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A recent thread contained a number of misstatements about how Location Services works. Rather than write multiple individual replies to the erroneous posts, I decided to just start a new thread:

HotSpot streaming is via BlueTooth.
No, it's not. It can't be, since not all devices support Bluetooth for internet access. HotSpot uses Wi-Fi.

My understanding is that without cellular (3G) you don't get true GPS, but you will still get "location services" as the iPad estimates your location via wi-fi.

iOS Location Services rely on 4 methods for determining your location:
• GPS (Location satellites owned and controlled by the US government)
• GLONASS (Like GPS, but owned & controlled by Russia)
• cell tower triangulation
• Wireless Access Point MAC address database

Virtually all iOS devices with cellular radios also have GPS chips. (The only exception is the original 2007 iPhone.) They receive signals directly from GPS satellites, and will work without any Wi-Fi or cellular signal.

Starting with the iPhone 4S and the LTE iPad models, Apple started using a GPS chip that also supports the Russian GLONASS system.

(It isn't well known, but one of the benefits of getting a cellular-capable iPad is that you also get a GPS chip, a feature that's missing from the WiFi-only models.)

the location service works off your IP address

No, it doesn't. Location via IP address has never been very accurate, and Apple has never used it for Location Services.

Starting with the original iPhone, Apple's Location Services used cell-tower triangulation and a database of WAP MAC addresses and their locations.

The original database Apple used was provided by a company called Skyhook Wireless. They built their database in a manner somewhat similar to the way Google built their Street View database. Skyhook equipped computers with both WiFi and GPS receivers, and put those computers in cars that drove over pretty much every public road in the US and other countries as well. Every time it could sense a WAP, it recorded the WAP's MAC address along with its exact latitude and longitude.

Starting a few years back, Apple started to build their own database, using iPhones and iPads to collect the same data. This database is unquestionably more up-to-date than Skyhooks, because it's updated continuously in real time.
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