We took the trip almost a year ago and did not notice any problems due to the current conditions. There was a peaceful teachers protest in Madrid while we were there.
On the question of WiFi, here is my trip report posted in the Tips sections of this forum:
Spain and Portugal in Depth WiFi Report, 3 November 2011:
This is a great trip and covers a lot of cities in 14 days. There’s not much free time to spend surfing the internet but access was free in all but Lisbon. My Android Tablet PC was WiFi only so I did not test Ethernet drops in the hotel rooms but noted if they had them.
Madrid Spain – Hotel Catalonia Gran Via (Guadi) - Free WiFi in room had a good strong signal. Ask the front desk for the User ID and Password. There was an Ethernet Drop in the room.
Cordoba Spain – Hotel Cordoba Center – Free Wifi but signal too weak to use in room. Had to go to the lobby to use Wifi. User ID and Password are printed on the key envelope they give you at check-in. There was an Ethernet Drop in the room.
Torremolinos Spain – Hotel Melia Costa Del Sol – Free Wifi in room, but signal weak. I Got better signal on the balcony so I checked e-mail and enjoyed the view of the beach. Ask the front desk for User ID and Password. There was an Ethernet Drop in the room.
Seville Spain – Hotel Sevilla Center – Free WiFi in room with good signal. User ID and Password are printed on the key envelope they give you at check-in. There was an Ethernet Drop in the room.
Lisbon Portugal – Hotel Mundial – No free WiFi. Purchase access card from front desk 3.50 Euros for one hour of WiFi access. Note this is a one-time use access card, so if you use 15 minutes to check e-mail and then try to get back on the next day it will not work. You must purchase a new card for each use. The WIFi signal was good in the room. There is no Ethernet drop in the room so WiFi is you only in-room option.