Raspberry Pi Personal WiFi Hotspot (part 1)

I recently bought a Nexus 7 16GB WiFi with the hopes that it could replace my aging and heavy laptop. My first thought for remote connectivity was to use the personal hotspot feature on my phone... until I saw the prices. $20/month on top of what I already pay for a service I will rarely use? No thanks! Here's what I did instead. I already had everything except for the 4G* usb adapter I bought off of Amazon. 

*The 4G service is Clearwire wimax (now owned by Sprint). Sprint is replacing wimax with LTE, but will be keeping the wimax online until sometime in 2015. 

Equipment
- Raspberry Pi - Model A will work for this project, but I only have a Model B. 
- 4GB or greater SDCard 
- 1A or greater micro usb phone charger. I have successfully used the stock HTC charger, and a generic 1 amp car charger with both USB devices connected directly to the  pi.
- USB WiFi Adapter - I used a Belkin F9L1005 (rtl8192cu) - I DO NOT recommend using this model!
- USB 4G Adapter - I am using a FreedomPop branded adapter which appears to be this: http://www.ubeeinteractive.com/products/mobility/ubee-4g-wimax-usb-pxu-1960. I purchased one from amazon here: http://www.amazon.com/Freedom-Stick-Bolt-Modem-Black/dp/B009FCGASA/ref=sr_1_3?s=wireless&ie=UTF8&qid=1377739418&sr=1-3&keywords=freedompop

There are undoubtedly cheaper ways to get internet connectivity, you could probably buy a MiFi device for cheaper than the total cost of this setup, but I have another project in mind that I plan on using the same Raspberry Pi for. 

Part 1 - Prepare the Raspberry Pi OS

Start with the official Rasbian distro.  Instructions and the download can be found here: http://www.raspberrypi.org/downloads

Run the raspi-config utility and configure your desired settings. 
* Set your password
* Expand Filesystem
* Disable boot to desktop
* Enable SSH
* Use the 16MB memory split if possible. I had some problems booting my revision 1 pi on the 16MB setting and had to go with 32MB.

Reboot and update assuming you are plugged into a network.
sudo apt-get update 
sudo apt-get upgrade 

Remove the Desktop environment for a little extra space on the SD card. The only reason for this is to allow a larger squid disk cache size.
apt-get remove --auto-remove --purge libx11-.*
apt-get auto-remove

Install the software we will be using.
apt-get install hostapd hostapd-utils dnsmasq squid3 adzapper

At this point the software components need to be configured.

Part 2 - Configure WiFi AP

Plug in your wifi adapter and make sure the system recognizes it by running ifconfig. It will probably be listed as wlan0.
Configure the interfaces at /etc/network/interfaces. The sample below includes dhcp setting for eth1, which will be the USB 4G adapter.

auto lo

iface lo inet loopback
iface eth0 inet dhcp

iface eth1 inet dhcp

iface wlan0 inet static
address 192.168.254.1
netmask 255.255.255.0

Configure hostapd. If using the rtl8192cu usb adapter then you will need a custom hostapd binary available here: http://blog.sip2serve.com/post/38010690418/raspberry-pi-access-point-using-rtl8192cu
Edit /etc/hostapd/hostapd.conf to something like the sample below. 

interface=wlan0
driver=rtl871xdrv
country_code=US
ssid=Mobile-Wifi
hw_mode=g
channel=1
wpa=2
wpa_passphrase=Your_Password
wpa_key_mgmt=WPA-PSK
wpa_pairwise=TKIP
rsn_pairwise=CCMP
auth_algs=2
macaddr_acl=0

Configure dnsmasq as a dhcp server. Create a new /etc/dnsmasq.conf file or add the following sample to the top of the existing one. This specifies the dhcp pool as 192.168.254.100-200 with a 12 hour lease.

domain-needed
interface=wlan0
domain=mobile-wifi.local
dhcp-range=192.168.254.100,192.168.254.200,255.255.255.0,12h

Now we need to make the pi act as a gateway and forward packets. This is just a matter of uncommenting a line in /etc/sysctl.conf. Add or uncomment:
net.ipv4.ip_forward=1


That should be all that's needed for a simple AP. Shut down the pi and plug in the USB 4G adapter. Start it back up and attempt to connect to the wifi. If connected, open an ssh connection to 192.168.254.1 and see if you can ping google.
That's all I have time for at the moment. I'll work on posting a quick howto for saving a little bandwidth using squid and adzapper. 

Raspberry Pi with Wifi and 4G USB adapter.