It’s nice to hear that FON, the share-your-Wi-Fi network founded by entrepreneur Martin Varsavsky, has gotten an investment from Google, along with Skype founders Niklas Zenstrom and Janus Friis – but while that is a huge vote of confidence, it doesn’t remove some of the uncertainties surrounding the FON business model. For one thing, as more than one person has mentioned (including in the comments on Scoble’s post) almost every major ISP specifies in their contracts that this kind of wide-open sharing isn’t allowed.

According to comments Martin sent to Om, the company is trying to bring ISPs on-side, but has so far only managed to strike a deal with Speakeasy (Update: According to Om, Speakeasy says it has no arrangement with FON). Alec Saunders of Iotum says that most ISPs don’t enforce these agreements, and that’s true – but they might decide to change their minds about that if they find widespread sharing of the type FON has in mind.

Glenn Fleishmann of Wi-Fi Networking News, who has been a major skeptic on FON, says the investment by Google and the Skype gang (as well as Index Partners, which made a bundle on its investment in Skype) makes him a little less skeptical, but he still has concerns – including the difficulty of getting ISPs on-side, but also the difficulty of building out a robust enough wireless network to make what the company has in mind actually feasible.

Not only that, but how many people are going to feel the same concerns over security that the commenter on Scoble’s post feels? FON has a response here, but that might not satisfy enough people to open up their networks – especially after everyone has been telling them to lock them down so no one piggy-backs on them. FON has a response to the ISP question too, but that amounts to trying to convince the ISPs they will share revenue with them (assuming there is any). Like my friend Rob Hyndman, I think many providers (particularly in Canada) would be skeptical.

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Mathew 2430 posts

I'm a Toronto-based senior writer with Fortune magazine, and my favorite things to write about are social technology, media and the evolution of online behavior

7 Responses to “FON sounds great, but will it work?”
  1. FON Sounds Great, But Will It Work? Matthew Ingram 2/06/2006 06:31:00 PM

  2. $22-million or so from Google, Skype and Index Ventures, but it might have a bit of a credibility problem as well, after reports from one U.S. Internet service provider that contradicted what founder Martin Varsavsky said when he announced the deal. He said the company

  3. […] I hope I’m wrong about the ISP reaction – plans like FON and groups like Wireless Toronto are to my mind fantastic tools for quickly and efficiently deploying the ubiquitous wireless broadband we ought to be enjoying right now. Update: FON’s founder, Martin Varsavsky, is quoted by the AP on the ISP issue to the effect that someone who wants to share their bandwidth using FON needs Internet service to be a member. “So in fact, FON is an incentive to become a customer of an ISP,â€? he’s quoted as saying. Well, having access to bandwidth is an incentive to having an ISP account. Since one can share with many, FON is an incentive for at least (and at most?) one member of a group to have an ISP account. How that works out in numbers is the issue. Update: Mathew Ingram notes the security concerns that some observers have and FON’s answer. I’m willing to bet that Steve Gibson will take a close look in an upcoming episode of the Security Now! podcast (even though he’s just finished a multi-episode series on wireless security) – stay tuned. Related Posts […]

  4. Any questions for Martin Varsavsky?

    Martin Varsavsky is the founder and CEO of FON (as well as being the founder of highly successful companies such as Viatel, Jazztel and Ya.com). FON is a community of people who share WiFi. If you sign up with FON you share your WiFi broadband access …

  5. mathew,
    i share your skepticism. VC gone mad again…

  6. On the other hand, if I had as much money as the Skype guys and that guy from Index Partners, I might figure blowing $12-million or so was chump change :-)

  7. I would imagine they will do something more on the lines 2hotspot.com. A downloadable software that runs on Windows just like Skype. But Fon runs only on Linksys routers that are no longer manufactured.
    They need a quite a large Linksys user base to this working…

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