In my opinion this is only good solution proposed so far. With Instant one gets most benefits of controller based solution without actually purchasing controller.
I assume provider you described is Ziggo? There's technical description of their solution on http://www.technischweekblad.nl/hotspot-groningen.297341.lynkx. Google translate turns it to good enough English.
Ziggo tunnels visitor traffic so customer that hosts access point don't need to worry about cops knocking on door due someone else abusing connection. It's same way Finnish provider "Wippies" did years ago before closing down. This is also right way to solve this problem and also fixes at least routing and session persistence issues with roaming between access points. Other roaming issues such as client sticking to distant AP may still be present if there's no AP-to-AP RF management features like those in Aruba, Cisco etc. enterprise wireless (controller based) solutions.
Don't forget Hauppauge i486 motherboard that had i860 on it. Not quite i960, but still RISC. Pretty much only thing you could do with i860 side was running sample application included on floppies that rotated some characters on upper right corner of screen - and that rotation persisted over reboot with ctrl+alt+delete. Whoo, multi-processing! I think i860 processor on that motherboard was intended to be used together with bundled non-standard display adapter for some sort of CAD use.
I actually had one of those, got it from some bankrupt company with full manuals, compiler for i860 etc. Shame I've lost it over years as I doubt there's many of those left today. Even had that custom display adapter and bunch of technical information from factory as it was some sort of pre-production sample sent to company importing Hauppauge products.
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