Spanish Wi-Fi Co. Backed by Google, Skype

Madrid-based Fon Technology has won financial backing from Google and Skype for its peer-to-peer approach to providing Wi-Fi Internet access.

Spain’s Fon Technology aims to improve wireless Internet access by encouraging users to share their Wi-Fi connection, and the idea just won $21.7 million in financial backing from Internet heavyweights including Google and Skype, despite potential legal challenges from ISPs.

Fon is part a class Internet business model and part door-to-door social movement: Fon aims to become a block-by-block global community of people who share their Wi-Fi connections to other Fon members (or “foneros”) for free. Members of the Fon community donate access to their Wi-Fi connection to other Fon members; in turn, members receive free Wi-Fi Internet access when they’re on the go. Fon’s goal is to create a worldwide network of Fon members, so no matter where users go, Wi-Fi internet access via Fon will be available. Fon is designed to operate on Linux-enabled Wi-Fi access points; in its current beta phase, Fon software is limited to versions 1.x to 4.x of the Linksys WRT54G/GS/GL routers, though wider compatibility is planned.

Fon eventually plans three (amusingly-named) levels of access: so-called “Linus” users share their Wi-Fi connection and in turn receive Fon Wi-Fi access for free wherever they go, while “Alien” users do not share their ow Wi-Fi and pay a small fee to access Fon Wi-Fi routers. A “Bill” user shares their access point in exchange for 50 percent of the fees charged to “Aliens” using their access point.

Fon plans to earn money by partnering with ISPs in various markets, permitting an ISP to provide Wi-Fi routers with Fon software already installed. ISPs would then be able to market Fon service as part of their monthly Internet charges, but also promote free roaming Wi-Fi roaming capabilities across the entire Fon network, worldwide. In turn, Fon shares revenue from “alien” users with the ISPs supporting Fon.

Fon may face legal challenges from some non-partner ISPs who do not permit their users to share their Wi-Fi connections. ISPs often turn a blind eye toward informal connection-sharing, but they may not look so kindly on a business model built upon the idea of customers sharing access to the ISP’s network as communal property. Fon encourages people to check the terms of their broadband service agreements before signing up as foneros.