http://www.forbes.com/entrepreneurs/2007/02/23/fonbucks-wifi-starbucks-ent_cx_mc_0226fonbucks.html?partner=rss
*** Just because you pay a premium for Starbucks coffee doesn't mean you have to pay a premium to surf the Web at Starbucks cafes. FON, a community WiFi provider headquartered in Madrid, Spain, is offering wireless Internet access to Starbucks' latte-sipping surfers for just $2 a day--versus the $10 users pay to sign onto the 5,100 T-Mobile hotspots at U.S. Starbucks . Just how does FON plan to steal away Starbucks Internet users? By offering FON wireless routers, also known as "La Foneras," free to anyone who lives above or next to a Starbucks. The routers, which usually cost $40, split an Internet broadband connection into two wireless signals--one for personal Internet use and the second for public use, which can be accessed by anyone within range for $2 per day. The routers' owners get to pocket half of the sign-on fee, and FON takes home the rest. Starbucks refused to comment directly on the FONbucks campaign, but a Starbucks spokesperson said any increase in the number of WiFi hotspots is "a good thing." T-Mobile also declined to comment on the program. The idea behind FON is to build the world's biggest WiFi network from the bottom up by encouraging the world's 300 million broadband customers to buy La Fonera routers and share their wireless access with other FON subscribers. The goal: to have one million global WiFi "hotspots" by 2010 accessible to all so-called Foneros, or members of the FON community. Currently, there are over 300,000 hotspots in Europe, Asia and the U.S. FON was founded in November 2005 by Argentine telecom and new media entrepreneur Martin Varsavsky, whose brainchildren also include Jazztel Telecommunications, now the second-largest publicly traded telecom company in Spain, and the Internet portal Ya.com, which Varsavsky sold to Deutsche Telecom subsidiary T-Online in 2000 for 550 million Euros ($722 million). After Varsavsky secured $22 million in funding from Sequoia Capital, a California-based venture capital fund, European venture capital fund Index Ventures, Google and eBay, FON started offering routers last fall. Foneros who have bought La Fonera, FON's "social router," share their WiFi at home and, in return, get free WiFi wherever they find a FON access point. (A map of existing FON hotspots is available here.) Today, the Fonero community is broken down into three different groups: so-called "Bills," "Linuses" and "Aliens." Bills, named after Bill Gates, charge $2 for signing onto their network and pay $2 to sign onto any other Fonero's network. Linuses--named after Linus Torvalds, the brain behind the open-source Linux system--offer their extra bandwidth for free to other Foneros and can access any other Fonero network, including Bills', for free. Aliens, or users from outside the FON community, can sign onto any Fonero's network by paying $2 via eBay's PayPal online payment service. The phenomenon is catching on quickly. The number of users in the U.S., now FON's largest market, has risen to 44,000 registered Foneros, up from 17,000 users just two months ago, says CEO of FON USA Joanna Rees. It's still too soon to tell how much Bills stand to make by charging for access to their networks, but Rees claims some Bills have made a few hundred dollars a month just by sharing their WiFi connection. Globally, about 85% of all Foneros are Linuses and 15% are Bills. Getting more Foneros to sign up is priority numero uno for FON: The more Foneras there are, the more La Fonera routers FON sells. The more routers FON sells, the more aliens will pay to access the FON wireless network. FON's campaign, launched Feb. 21, is aimed at increasing FON's ranks of Foneras. Rees, who thought up the campaign, first located which Bills and Linuses in the U.S. had the highest numbers of users, then compared their locations against Starbucks' store locations. She found that many of the locations overlapped. "We needed to be strategic about where we put routers [in the U.S.]; we need them in high-traffic locations for people to become aware of FON," says Rees. "[We] saw this was a great opportunity for us." An opportunity, of course, that comes at Starbucks' and T-Mobile's expense. -- WISPA Wireless List: wireless@wispa.org Subscribe/Unsubscribe: http://lists.wispa.org/mailman/listinfo/wireless Archives: http://lists.wispa.org/pipermail/wireless/
