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The SSID differentiates one WLAN from another, so all access points and all devices attempting to connect to a specific WLAN must use the same SSID. Because an SSID can be sniffed in plain text from a packet it does not supply any security to the network.
Each Access Point advertises its presence several times per second by broadcasting beacon frames that carry the ESS name (SSID). Those who have installed NetStumbler on their WiFi-equipped laptops and cruised around town can relate how many SSID's pop up, many of them announcing their location, and whether they are secured or not.
SSID from a security point of view acts as a simple single shared password between base stations and clients, but this should not be considered anything other than a very basic level of security. An SSID can be easily discovered by network sniffing.
With proper configuration, only clients that are configured with the same SSID should communicate with base stations having the same SSID. Knowing the SSID name does not necessarily mean that rogue clients will be able to join the network. It depends on how the network administrator has configured their WLAN, particularly WEP or WPA security.
By default, the SSID is part of the packet header for every packet sent over the WLAN.