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I have always been using my macbook(10.6.8) as a hotspot and everything worked fine. But of recent, my iPhone and iPod just can recognize the presence of the macbook wifi but they can't connect to it. The load "spinning wheel" keeps spinning but there is no connection from my iPod or iPhone. where could the problem be?

PS: I have crosschecked again and the airport option in system preferences says "AirPort has the self-assigned IP address and will not be able to connect to the Internet." I am not sure how to proceed from here.

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Is the iPhone not able to connect to the MacBook (as in "checkmark doesn't appear in the iPhone WiFi list") or does the connection work but you can't access the internet? – patrix Mar 15 '13 at 15:44
@patrix the checkmark does not appear(thus the unending "spinning wheel") – Muk Mar 15 '13 at 15:52
The behaviour you're seeing in system preferences is normal when you're sharing your connection via wifi. Have you tried resetting network settings on the ios devices? – Chris A Mar 15 '13 at 16:49
Chris A, i have tried that too but it does not change anything. my macbook wifi is listed but the check mark is not there at all.(just the trying-to-load "spinning wheel", as stated above, is all i can see) – Muk Mar 15 '13 at 17:05

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