Maybe If We're Cheap Enough, No One Will Notice We're Breaking Everyone's Terms Of Service

from the now,-there's-a-strategy dept

We've never quite understood the strategy of the ridiculously hyped up "Fon". It's a pure gimmick with a ton of problems that are likely to block it from ever being successful. Basically, the company wants people to offer up their home WiFi for sharing as a network. There are different plans if you share your own home WiFi or offer it for a fee (and that, in turn, determines whether you get to use others' access points for free or for a fee). Among the many problems is the idea that you can actually get near ubiquitous coverage from just random home users. How many people are really going to jump on board? It's going to take an awful lot -- and even then the dead spots may be a problem. At the same time, with the "fee/free" alternatives, the business model makes almost no sense. If people share, they won't pay, and how many people actually pay for WiFi access these days? Fewer and fewer, especially as alternatives keep popping up. However, the biggest roadblock has always been the fact that most ISPs forbid any kind of sharing of their connection. While Fon keeps saying that it will convince ISPs otherwise, not many seem to be excited about this sort of thing. Yet, they keep pushing forward, and the latest is a plan to offer a heavily subsidized WiFi router for $5 to anyone who agrees to share their connection -- again, pretty much ignoring that almost no one is actually allowed to do so. Perhaps their strategy is to just throw away all the millions of dollars of VC money they've raised, and hope that as they're finally out of money, enough of these devices are out there that the ISPs really can't do anything about it and decide to cooperate. That seems like a stretch though, and it's surprising that some investors would bet over $20 million on such a risky strategy.

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  1. identicon
    stuart, 20 Sep 2006 @ 8:43am

    Check your facts please

    Breaking everyone's T&Cs?

    I use two different ISP services. Both allow sharing. One forbids me from reselling more bandwidth than I buy ;-)

    Who pays for WiFi nowadays?

    Almost everybody in city centres in many countries. Open networks are fast disappearing. Even in the surburbs some countries it looks like the suppliers have defaulted APs to encryption eg Belgium is wide open but neighbouring Netherlands is much tighter. In a Paris or London Hotel you will probably be paying BTZone, Orange or T-Zone to collect your US mail!

    Ubiquitous coverage?

    OK but the competition have NO coverage outside the commercial urban areas so suburban coverage is a USP. Urban coverage is a problem for FON but judicious use of entrepenaurs with directional kit creaming hotel & other traffic is a dream that may be partially realised. FONs cheaper prices reflect that the user may need to more to find the service rather than the service finding them. This was the position of competing mobile phone networks when some had much better coverage than others. Funny how it all evened out in the end.

    No - not defending FON. There are a lot of risk and mis-executed development and i wouldn't bet my pension on them. But please don't misdirect your attack for the sake of a catchy but dodgy headline.

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