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how exactly does it work. there saying i have to pay 20 bucks for wifi hotspot for facetime or something. please someone tell me how exactly wifi hot spot works for a iphone 4

I've taken Media for my A-levels, but i haven't got a clue for what i'm in for. Well, i did take it for GCSE so i've got a vague idea, but a deeper insight would be appreciated! Thanks in advance:)