October 27, 2006 4:00 AM PDT

Taking Wi-Fi power to the people

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FON was founded less than a year ago in Madrid, Spain, by entrepreneur Martin Varsavsky. The grassroots Wi-Fi network provider caught the attention early on of big financial backers. And in February, Google and eBay, along with the venture capital firms Sequoia Captial and Index Ventures, which had also backed Skype, invested more than $21 million in the start-up.

Despite its own municipal Wi-Fi interests, Google executives say they aren't threatened by FON's grassroots efforts.

Photo: Wi-Fi giveaway

"FON is one of a number of interesting companies working to make the Internet more available to end users, and this is a mission in which Google deeply believes," said Chris Sacca, head of special initiatives for Google. "FON's approach is very different from Google Wi-Fi, yet we support experimenting with a variety of means of making the Internet more available to end users around the world. We are friends with anyone innovating to make the Internet more widely available to end users."

While FON's concept of grassroots Wi-Fi may sound like a good idea, it's not without issues. For one, many Internet service providers, such as AT&T and Time Warner, consider the very concept a violation of their customer contracts.

"Sharing bandwidth outside of a dwelling without our consent is a violation of our terms of service," said Maureen Huff, a spokeswoman for Time Warner cable. "People need to know that sharing their broadband service amounts to theft. It's analogous to running a cable line outside your window and giving free video signals to your neighbor, which I think everyone recognizes that's wrong."

While it might be difficult for service providers to pinpoint who's using a FON router, Huff said there are ways find out if someone is illegally sharing broadband service. If illegal usage continues, Time Warner can cut off service.

But FON's Rees said the company is working to partner with several broadband providers. She said that the FON network will actually help cable operators, phone companies and other Internet service providers encourage broadband adoption. She added that FON would also offer financial incentives.

"We are working hand-in-hand with ISPs," she said. "And there are many benefits we can bring to them, such as sharing some of the revenue generated from the service fees from non-FON members."

Critics of the FON model say there are also technical hurdles to FON's network. Because Wi-Fi operates in unlicensed radio spectrum, signals can interfere with each other, degrading the performance of the network. This is a big issue for citywide Wi-Fi deployments too. But because the city or a service provider controls the network, it can re-engineer the network for maximum reliability and performance.

By contrast, a FON Wi-Fi network is completely unmanaged. And it can falter if the individuals using it don't keep their routers turned on.

Ron Sege, CEO of Tropos Networks, whose gear is being used to build San Francisco's Wi-Fi network, said he doesn't believe FON's network will replace the need for cities or service providers to build and manage citywide Wi-Fi networks.

"I'm sorry, you don't put devices like that inside homes and get ubiquitous coverage," he said. "These are telecommunication networks, and users expect a certain level of reliability and speed. And believe me you won't get that with consumers hanging little devices off their DSL connections."

To a certain extent, Rees of FON agrees. While she believes that cities could achieve the same Wi-Fi coverage without building a network themselves or contracting someone else to build it for them, the FON network can work with municipal Wi-Fi networks to improve coverage.

"We think we can save cities and residents, who need to pay $125 for a device to boost signals indoors, a lot of money with our network," she said. "But I think our networks can co-exist and complement each other."

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Economics says this is a silly idea.
Unless service providers are will to cut down the price of providing internet service to the home, I don't see the benefit of sharing my internet service so that FON can make money.
Posted by techisgood (3 comments )
Reply Link Flag
Your profit is in the fact that you will be able to access the Internet via other foneros's , so Fon users are called, wi-fi access point. You trade part of your bandwith at your home with some of the bandwidth "owned" by others... it's the same concept behind P2P, and recent history told us P2P was not killed by economy's rules at all, it rather told us that those rules were shaken to their very foundations by P2P. The only enemy Fon can fear is the law... I live in Italy, and here you can't transmit on the wi-fi wavelength if you're not an internet provider or an authorized institution, so a fonero sharing his/her bandwith would be abusively transmitting and therefore an outlaw. Thus, I think you should just appreciate to be able to, at least, try and evaluate such a chance.
Posted by cxar71 (13 comments )
Link Flag
see the point
you don't see the point of sharing, uh?,
if you share you'rer conection for free you can conect to internet with your laptop for free, everywhere in the "fon network" with your login username. This is called "linus"
Also if you don't want this fon offers to pay you some of the revenue generated by the "aliens". this is called "Bill's". :)
Posted by jonytk (18 comments )
Link Flag
Economics says this is a silly idea. Not.
Sharing services with free riders in order to share their services AS a free rider makes eminent sense. Whether you personally value the service provided you by others depends, of course, on whether you have any need for it. If you do home swapping, then you are using the same model as Foner. If you never travel then you'll not have any need of it and therefore will value it low enough that your resentment of the profit made by the coordinator (Foner in this case, the home-swapping agency in the example) trumps your enjoyment of the opportunity.
Posted by terrasegura (2 comments )
Link Flag
Why not satelite or Cell?
If I can get streaming media over a cell phone why do we ned all of these silly routers and wi fi terminals?
Posted by Blito (436 comments )
Link Flag
Researcher will claim this would put people in higher risk of cancer.
Posted by iRhapsody (46 comments )
Reply Link Flag
Looks good but...
How about security?

Otherwise, I think it's ok. It's like peer-ro-peer on an infrastructural level.

Hope this one kicks-off well.
Posted by Mendz (519 comments )
Reply Link Flag
Looks good but...
How about security?

Otherwise, I think it's ok. It's like peer-to-peer on an infrastructural level.

Hope this one kicks-off well.
Posted by Mendz (519 comments )
Reply Link Flag
Fon Security -- or Lack of
Fon is unsecured, shared text among users.

Posted by darhsiung (4 comments )
Link Flag
Free computer, Free million, now free AP
First we had free computers, if you tolerate ads. I can't remember the company names.

Then we had iwon with chance to win one million dollars.

Now, it's Fon blowing $20 million giving away APs. In 60 days, the 500 APs will disappear into the closet of old junk. Users who install it, risk losing their broadband service for reselling.

I guess we never learn that technology should be cool products first, and marketing second. Fon clearly has no product and no web2.0 sense.

- www.AeONsafe.com
Posted by darhsiung (4 comments )
Reply Link Flag

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