Google and Skype shell out on community WiFi

You know your proposition is hot when you are attracting investment from the likes of Google and Skype.

This seems to be the case for a new Internet access network called Fon, which works by users pooling available bandwidth, to enable free WiFi roaming. Only people who already have a local Internet connection are able to take advantage of others’ sharing.

The company has now secured 18 million euros in initial financing from Skype, Google and venture capital firms Index Ventures and Sequoia Capital, reports Reuters.

Clothing itself as a grassroots movement to build a collective WiFi network – the company’s slogan is ‘FON: share a little, benefit a lot!’ – the Madrid-based company will welcome the boost to both its legitimacy and its capital resources.

The man behind Fon, Martin Varsavsky – the founder of the Spanish portal ya.com and the Spanish telco Jazztel – describes it as ‘a global community of people who share WiFi connections’. In order to become a ‘Fonero’, as the company dubs it, you have to install Fon’s software in your (compatible) router, place it near a window and then share bandwidth with other users around the world. Essentially, the aim of Fon is to create a free WiFi roaming environment for those who contribute WiFi signals via a local ISP.

Such ISPs, however, represent a potential obstacle for Fon. Standard service agreements have no place for the ad-hoc sharing of connections to the Internet, but Fon is reportedly making progress in talks with European ISPs.

The Google and Skype interest will certainly be welcomed by Fon. Like other commercial attempts to build online communities – such as Skype and eBay – the more people who sign up and download the software the better.

Varsavsky boldly declares: ‘The FON movement, as we call it, can achieve what 3G or EVDO has not – a truly broadband wireless Internet everywhere. 3G/EVDO are great for coverage, but their throughput is pitiful compared to WiFi and they are way too expensive.’

What is the business model? The company’s FAQ states: ‘The Fon revenue model is based on Aliens, the users who will pay for connectivity since they do not share bandwidth with the Community. For the time being, Fon is neither available for Aliens or Bills. Eventually, a Bill will be able to share his/her connection in exchange for a percentage of the revenue generated from his/her Hotspot.’

What are your thoughts on Fon? A clever eBay-like attempt to profit from the inter-communication of its own customers and build on their resources or a pointless extension of WiFi usage to give purpose to a business that’s been set up to be bought up? Leave a comment via the link below.

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