Big Name Backers Add Money To Gimmicky WiFi Sharing Plan

Overhype

from the but-will-it-work? dept

Back in November, we wrote about what seemed like a silly plan for getting people to share their WiFi by letting people choose whether they were more like Bill Gates or Linus Torvalds. The two plans meant that either you shared your WiFi for free and got access to others’ for free — or, you sold access to your WiFi and got a cut (but no free access yourself). The plan has a ton of problems with it that aren’t hard to see. Similar things have been tried before a few times, and none got very far for very good reasons. First, and most importantly, nearly every ISP out there forbids you from sharing the connection. While the company claims it will convince ISPs that offering this service makes them more desirable, it seems unlikely that too many will buy into it. It’s also worth noting that very few people actually have WiFi in what might be considered desirable locations. Also, if this plan actually catches on (which still seems unlikely), there will be an adverse selection problem. It’s become quite clear by now that there’s a very small percentage of people who will pay for WiFi, and only when there are no real alternatives. On top of that, anyone who seriously would use this service often enough to matter would obviously choose to be on the Linus plan — thereby destroying what little business model this offering already had. Apparently, however, some big names disagree with our assessment. The offering, dubbed FON (which might get a lawsuit from Sprint, who used to trade under the ticker FON), has convinced some big names to hand over a bunch of cash. Both Google and Skype invested — along with venture capitalists Sequoia (original investor in Google) and Index (original investor in Skype). Big names like that obviously grant the startup some credibility, but unless there’s something more to the business plan, it’s hard to see this going anywhere.