Martin announced today that FON as accepted 18 million Euros in funding from Google, Skype, Sequoia Capital, and Index Ventures. They are also going to support FON strategically. I blogged about FON earlier when I joined the advisory board, but FON is an innovative company that is starting a movement to allow people who have Internet access to create wifi hotspots.

If you’d like to join the FON Community, register with us at www.fon.com. You can select the user profile that most suits you. FON is now working in a Beta phase and is only available for Linus. A Linus is any user who shares his/her WiFi in exchange for free access throughout the Community wherever there is coverage. In the future, FON will also be available for Bills. Instead of roaming for free, Bills are users who prefer to keep a percentage of the fees that FON charges to Aliens. And Aliens are those guys who pay to connect.
The strategic relationship with Google and Skype is quite amazing and a key point. The telephone companies have been trying to prevent Internet companies from "free-riding" on "their" infrastructure. For instance:
"(Telecoms) and the cable companies have made an investment, and for a Google or Yahoo or Vonage or anybody to expect to use these pipes (for) free is nuts!"

-- SBC Communications CEO Ed Whitacre

There is clearly a battle between telephone companies who believe they deserve to recoup their investment in infrastructure by gouging people for voice and soon wifi access. On the other hand, companies such as Skype and now FON are trying to push the bottom-up Internet philosophy to one of the final layers where the monopolistic dinosaurs still reign. FON's ability to get Skype and Google who are natural competitors to work together to try to lower the cost of access to for users reminds me of Yahoo and Google both supporting Firefox to provide users with an free and open alternative browser.

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What I can't quite grasp is how the FON model is compatible with (personal) users' ISP contracts which (mostly) explicitly prohibit the sharing of the user's ISP user account details which are implicitly used by all connections routed through the user's internet connection?

fukumimi: i don't think that being incompatible with most users' networking is a big problem, as long as they're compatible with _enough_ users' infrastructure to be viral. i.e. _my_ ISP has no problem with me sharing my bandwith ;-)

on the other hand, i seem to be unable to find information on how to participate in my city (zurich/switzerland): seems like only spain and the U.S. are supported (mapped) at this moment? but maybe that's just because i'm not getting through to the (slashdotted) information ;-) clarifications would be most welcome...

Is that eBay money? Probably not. Sounds like Niklas and Janus. its not the same!

I like FON's idea. In our country (Philippines), the telecom giants are asking for more for a service of less. With FON we can outsmart these giants for good. I wish FON will expand it's reach in our country as soon as possible.

I guess I should have qualified my statement to read: " with (personal) users' ISP contracts which (mostly, in Japan at least) explicitly prohibit the sharing of the user's ISP user account details"

I think the FON idea is a great one, but at least here in Japan ISPs have the ability to reframe ULAs as and when they feel like it, and where there are ISPs providing (paid) wireless access services, it would seem only natural for these ISPs to attempt to block out what they would deem parasitic usage.

FON has something on their website aimed at ISPs, touting revenue sharing opportunities for ISPs, claiming that ISPs are in a price war and that this is an opportunity for ISPs to increase revenue opportunities. I guess this would be true in locales where various wireless access options are not widely available, but where there are such options, FON would appear to actually be a factor in reducing revenue opportunities by inducing heavy wireless access users (who are most likely to be the ones who will be favorably inclined to the FON model, and be willing and able to set up hotspots in exchange for free use of other hotspots) to adopt FON and reduce usage of the existing wireless network services.

It's all well and good to talk about "monopolistic dinosaurs" "gouging" the consumer, but unless the corporations that provide the physical lines are able to make a viable business out of their portion of the business, the businesses that do rely on the presence of the physical connections do not have access to their customers. Would anyone in their right mind oppose businesses recouping their investment costs, with an equitable profit for their efforts? If businesses are not rewarded for their risk taking, where does that lead us?

Mobilecrunch has coverage of the FON deal, and they seem to share my concerns regarding compatibility with ULAs and competition with paid wireless access services:

http://mobilecrunch.com/2006/02/06/google-skype-sequoia-and-index-fund-fon-mobilecrunch-wonders-why/

i don't have a whole lot of background info on this topic, but for what it's worth, i would like to point out that in my particular case, the ISP is not the owner of the physical cable. they are just the provider of an adsl modem "on the other side of the last mile".

so tying in the article you referred to (emphasis added):


I am hard pressed to imagine that the revenues generated will be sufficient to entice the big providers, who in the USA control some 90% of the market.

i agree with them that big providers will not be very happy about FON. i can also very well imagine that small providers, with little interest in (or lack of power to achieve) end-to-end control (such as mine), might have few objections to such a model: it would likely increase my peak bandwidth usage, thereby requiring a connection upgrade, therefore making more money for them. i win, they win, and in my particular (but quite possibly transferrable) case, those actually owning the cable don't seem to care very much either way.

again, i would like to stress that FON does not need the 90% of the market your article refers to -- the remaining 10% should be more than sufficient for FON to become a success. and make small, more specialized ISP's more attractive in the process.

so maybe phrasing it as "monopolistic dinosaurs" "gouging" the consumer is really hitting the nail on the head -- though maybe a bit aggressively ;-)

Of course as a general user I'll support FON and not phone companies. But how do they get money if they provide service almost for free?

I just found out that my ISP, who I thought was cool, is very uncool as they do not allow me to share my connection. Anyone know of an ISP in the UK that does?

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Listed below are links to blogs that reference this entry: FON signs with Google, Skype, Sequoia Capital, and Index Ventures.

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I wouldn't have believed it could be done if I didn't watch it happen first hand for myself. FON is now partners with Google and Skype/Ebay. Martin Varsavsky has announced on his blog that we have just closed an investment with Index Ventures (early Sk... Read More

Google and Skype joined VCs Index Ventures and Sequoia in funding Spanish WiFi startup FON. Founded by serial entrepreneur Martin Varsavsky, FON is building a global WiFi network bottom up, with one million hot spots by 2010. FON allows subscribers ... Read More

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