Hi,
When you say 'rebooted' did you mean a factory restore?
If not, try a factory restore and if this doesn't resolve the WiFi problem, verify the purchase date of the phone and then consult the manufacturer's warranty statement in the documentation that came with the phone as to what to do to make a claim for a warranty repair or replacement. There is a 12 month manufacturer's warranty on the phone.
Here is a link if you can't find it.
http://www.alcatelonetouch.us/warranty
''Before performing a factory restore (or reset) using the phone's factory restore feature:''
1. '''Backup the phone''' using the phone's back up feature. ''(A factory restore '''will erase all your user data and downloaded apps''' and will restore the phone to a factory default condition. It will be like when you first bought it).''
2. Ensure that the battery is fully charged and remove the external SD Card (if installed).
3. Do not leave the charger connected when performing the factory restore.
Once it has completed the restore check the Wifi.
''If it is still faulty'' you have a hardware problem, (see warranty claim above).
''If the WiFi now works properly'', restore the phone from the backup you made earlier, using the phone's restore feature.
Once it has restored, check the WiFi.
''If it is still working correctly'' the reset has fixed the problem.
''If it now faulty again'' then a downloaded app may be causing the problem. The trick is to find out which one. You will have to uninstall each downloaded app one by one and test the WiFi after each uninstall to see if it is working properly again. Once it does the last app that you uninstalled will be the culprit.