Guerrilla telco pushes broadband 'sub-letting'

Wi-Fi-sharing start-up Fon is offering its own Wi-Fi routers for €5, although doubts remain over its legality.

The Fonera routers share a user's Internet connection with other Fon members, which contravenes some ISPs' terms and conditions.

The new hardware, launched this week, could provoke ISPs to act against the start-up, which has hitherto been selling its software on modified Linksys routers to a comparatively small user base.

Members of the Fon community, known as "Foneros", use Wi-Fi to share broadband connections with other members, either for free or for a fee, depending on the class of membership. This breaks the terms and conditions of ISPs such as Pipex, which states: "Except as otherwise expressly permitted in these Conditions, and in addition to other restrictions herein, the Customer may not… redistribute, encumber, sell rent, lease, sub-license, copy or use the Service or otherwise transfer rights to the use of the Service to any third party, whether in whole or in part."

Although around 90,000 users have registered with Fon, few access points are available, partly because of the complexity of setting up the original routers made by Cisco-subsidiary Linksys.

The new routers, made by equipment-maker Accton, are intended to make setup easier, and ship with two WLANs set up, public and private. The public WLAN will have billing software enabled so the user can profit from it.

On top of the €5 price — which will hold till the end of this year — the routers incur a €10 shipping charge and €2.40 sales tax when bought in the UK.

Fon was started by Argentinian entrepreneur Martin Varsavsky in January 2006, who founded Spanish telecoms companies Jazztel and Ya.com, and received around €18m backing from Google, Skype and others, as well as backing from many bloggers.

One US Fonero reports a warning from his ISP on Fon's discussion board: "I sent an anonymous email to my ISP. I was given a list of all possible charges along with being told that using FON with my residental Internet account I was possibly breaking federal interstate telecom laws. I was also told that people who log on to a FON access point can rack up more charges for me and possibly themselves."

Although the legal difficulties are clear, Fon appears to rely on it being too much trouble for ISPs to enforce their conditions. Users agree to accept responsibility for any legal problem when they sign up for Fon, in the same way as users of P2P file-sharing services. Anyone buying the cheap router also promises to run the Fon software and share their Internet connection.

Several ISPs have already said they will not allow Fon use, including Virgin in the UK, according to Wikipedia. Others have agreed to allow it, including Spain's Jazztel, founded by Varsavsky. Some ISPs may allow the Fon service on business connections that allow unlimited use.

No comment was received from Pipex at press time.