Michel Bauwens:
Should I temper my initial enthusiasm for FON. Before FON, it seemed that the wireless community movement was only evolving very slowly, that the idea of bottom-up networks was catching on too slowly. It seemed to me that FON did things right in creating enthusiasm for the approach, enlisting luminaries from the blog world, etc.. The recent U.S. deal transpires that behind FON is not so much a social movement, but a business entreprise. My reaction is: is that necessarily a bad thing. FON is part of this new breed of netarchical capitalists, creating Antigoras, that wants to both enable and profit from participatory platforms. It seems to me that in this stage of the technosocial evolution of P2P networks, it is still an advantageous thing to combine the passion of P2P-oriented individuals and social movements, with the skills and means of certain business organizations. They usually due what pure social movements, such as the original free software movement, fail to do, i.e. the handholding of novices. Without FON, I would not even contemplate, as a non-techie, to do something about wireless networks, but with the simple recommendations of FON, you can think of starting something up that will immediately fit in a worldwide standard.
Read this critique by Glenn Fleishmann of WiFi Net News:

“Part of why I’d ridiculed Fon was because it seemed to rely on an idea already discarded in the Wi-Fi hotspot world that by providing the right software and incentives, tens of thousands of people would install hotspots, building a worthwhile network. But this is problematic because hardware and physical locality are tough sells.

Skype is useful when even two people have Skype in the entire world. Those two people, if geographically distant, save money using it and have better quality calls. With a few thousand people on Skype, it becomes viral because its value is much higher the more connections among people. A few million, and you have a multi-billion-dollar acquisition by eBay.

Fon is harder because home gateways of the type they are providing software for initially—some Linksys models with Linux embedded operating system software—can’t produce much of a signal. Home users can provide service to relatively few other home users via these gateways. There’s only utility in the Fon network if you’re charging for service and a lot of people use a hotspot, or if you’re not charging for it and a lot of Fon locations exist in the places you travel to (around town or the world) for you to also use for free.

The investment capital they’ve raised signals that while their network might be extended on a peer-to-peer basis, they’ll be putting their money into seeding the network by putting nodes in well-trafficked areas, probably in the thousands.

They have a real ISP problem, discussed extensively in the AP and Reuters story on Fon’s incoming capital, because (as the AP reporter quotes me saying) it’s trivial for ISPs to track Fon operators if the ISP bans sharing an Internet connection. Fon has central authentication so even with encryption, the destination of Fon messages will be known. (Of course, if Fon uses a peer-to-peer model like Skype, they could tunnel authentication through peers making this impossible, but that’s not a reliable way to run a login system.) Speakeasy and Sweden’s Glocalnet have signed up, Reuters reports; Speakeasy is the only national ISP I am aware of in the U.S. that encourages sharing their connections. (Update: Speakeasy says there’s no deal.)

Om Malik points out that Skype has concerns about being blocked by ISPs, so an alternate network of sorts—ISPs are still in the middle of this—benefits them, while Google is sorting out Wi-Fi business models. I argue strongly that Google will not become a Wi-Fi provider beyond San Francisco and Mountain View (at least not on any large scale) because their interest is high-margin businesses like advertising not low-margin ones like service provision.

Fon can only succeed with critical mass being achieved quickly enough to encourage the grass-roots uptake they need and with ISPs not banning them as critical mass grows. (Fon’s founder said they’ll subsidize the gateways so people can buy versions with Fon software installed—flashed over existing firmware—for $25, instead of $50 to $70 retail.)

And shouldn’t municipal-scale networks with limited free access kind of distort the Fon model? Why use Fon when you can get 300 Kbps for fee (Google’s bid for San Francisco) or two hours a day for free (many other cities)? If Google is as successful in building a business model for ISPs to run municipal wireless networks, advertising-supported service—such as what MetroFi now offers in three Bay Area cities—seems to wipe the floor with Fon.

Lest Fon be seen as entirely new and unique exclusive of the three firms mentioned before that tried this model using cheap computers and software instead of commodity gateways and firmware—Joltage, SOHONetworks, and Sputnik—remember that LessNetworks and Radiuz have been offering community authentication for a while. LessNetworks has been kicking around for a couple of years, a for-profit outgrowth of the Austin Wireless City Project that offers a gateway page, community features, and user accounts for free access for a small management fee; they donate their services to nonprofits and others, too. Radiuz is free WPA Enterprise authentication, which combines secure logins and unique WPA encryption keys with RADIUS features found in virtually all consumer and enterprise gateways. Radiuz started up a year ago.”