Yes, my car has an integrated hotspot available. It requires a separate subscription for service, which I'm not paying for. But if I use it (i.e., taking advantage of the free trial), then everything works. Note that the phone can connect to the car wifi separate from the hot spot (i.e., I have 2 separate check boxes -- one for wifi connection, and one for the hot spot). But all this probably doesn't matter, as I figured out the problem and it has nothing to do with the hot spot. First, let me recap the situation. Whenever the iPhone was connected to the car via wifi, the phone stopped being able to access the internet (hence Pandora stopped, but additionally a browser wouldn't work -- there was no internet connection). What should have happened is that the phone should access the internet via the cell network if wifi doesn't have internet access -- as with this situation. Note that wifi is required for Apple CarPlay, but the wifi connection itself cannot access the internet unless you pay a subscription fee to enable the BMW hot spot -- which shouldn't be required. So the problem was the phone not using cell service to get to the internet. After trying lots of solutions, the one that worked was resetting the phone's network connections by going to settings / general / reset / reset network settings. Note that simply cycling the phone (turning it off and on) was not sufficient -- I had to reset the network. I don't know exactly what this did or how it fixed the problem, but it worked! Note that this also resets the name of your phone, and you'll have to re-establish some logins, but it's worth it to solve the problem.
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