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.
"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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