On Friday, the company will give away its Wi-Fi routers, which will allow broadband subscribers to share their Internet connections with Wi-Fi users throughout their communities. "Freedom Friday," as the company is calling the event, will kick off at noon in San Francisco's Union Square.
, which are built and managed by a city alone or in partnership with a private company, have become popular in the last couple of years as large cities such as , New Orleans and have promised ubiquitous Wi-Fi coverage within their borders.
While access to Wi-Fi itself is cheap--it doesn't require expensive radio licenses and is readily accessible by just about every laptop on the market today--building and operating these citywide networks still costs money. Philadelphia estimates it will spend $10 million to build and maintain its network over the next several years. And San Francisco said it will spend $15 million--including maintenance and upgrades--over the next decade.
In total, network providers and local governments building their own networks, according to MuniWireless.com, a Web site that tracks the market. And by 2010, more than $3 billion will spent on these networks, the Web site said in a recent report.
Despite all the hype, only a handful of major cities have Wi-Fi networks up and running. San Francisco, for example, is still negotiating its contract with EarthLink and Google, which were selected to build the network. And New York City is still studying its options.
This is where FON comes in. The company, which, ironically, counts Google as one of its backers, says it has a solution that can be deployed now at very little cost to the city or its residents.
Video: Free Wi-Fi anyone?
Spain-based FON handed out free "La Fonera" routers in San Francisco, and CNET News.com's Neha Tiwari was there.
"San Francisco or any other city doesn't have to wait for new Wi-Fi networks to be built," said Joanna Rees, chairman of U.S. operations for FON. "There are 400 million Wi-Fi connections around the world. If we could get all of them to become part of the FON community and share their Wi-Fi, we would have ubiquitous coverage around the world today. And we wouldn't need to build municipal Wi-Fi networks."
FON's software allows broadband subscribers to split their Internet connection so that it offers a secure connection indoors and an open connection to people outside the home. Initially, the software could be downloaded onto existing home routers. But this proved too difficult for most people, so FON built its own, small router, called La Fonera.
The La Fonera router, which uses standard 802.11g technology, was introduced only a few weeks ago. It was designed for easy installation. Users simply plug the device into their existing broadband modem, and, voila, their broadband connection is converted into a FON access point.
Currently, about 112,000 La Fonera and FON-enabled routers have been registered with the company. To help spur adoption it's been offering the routers on its Web site for $5 apiece. It's also taking its promotion on the road, offering routers for free in cities such as San Francisco and in New York, where it's planning an East coast "Freedom" event for later this year.
Once users have registered, they become part of the FON community, which allows them free access to any FON hot spot in the world. Non-FON members can also access the network, but they must pay $1 or $2 for 24 hours of access. This small fee is actually how FON generates revenue.
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."