As I am doing research on the interaction design issues with wireless networking, I have been particularly interested in seeing how the story with Fon will evolve. I first reported on Fon in October before they launched and I have seen that the movement was gaining some momentum even before being officially launched. but then, I figured out that the solution they were offering was not that novel — Robert Cringely reports on a micro franchisee business model that looks pretty similar — . Experts in the field of wireless and broadband were questioning it too (see Om Malik, Glenn Fleishman).
Now that Fon has get major financial backing by company like Google or Skype, this changes the situation. Not only are they getting money but also a lot of free marketing with nearly any major publications talking about Fon. Glenn and OM Malik have posted a nice update on the situation.
I believe that we need to come up with a solution to offer an unified and enriched user experience in regard to wireless networking. The question that stands is not if it is going to happen (I believe it will) but how and when it will happen.
Fon has definitely an opportunity to get it right and has partners that can help it . But there are still major obstacles for it to become successful.
NETWORK SIZE IS NOT EQUAL TO VALUE
The number of hotspots is not directly linked to the value of the network. While Metcalfe’s Law
The value of a network equals approximately the square of the number of users of the system (n2) (Wikipedia)
So, yes the more hotspots Fon will get, the more valuable it will become to be part of the network (be a Fonero). But contrary to the telephone (for example), the increased value of participating to the network is not as clear. In the case of Skype, the value increases as more people join since prospective members will have more people they know on the network. But in the case of WiFi, all access points are not equally valuable to the network. In urban (and dense) areas, a hotspot can serve several people and will greatly enhance the value of the network. But in areas where the density is lower, the probability that an access point could cover more than 1 or 2 neighbours.
So, what does this mean?
- In dense areas, the people may be tempted to set up Fon access and getting revenue out of it.(the Bill model)
- In rural areas, the opportunity to make money out of one access is little. So, more people that will sign up as Foneros will probably choose the free roaming option (the Linus Model)
- The people that will be paying for access will be the non-members of the network and the Bills when roaming
So what this creates is a multi-layered network:
- In metropolitan areas, the network could have a high traffic and bring revenue to Fon from visitors mostly. But a lot of users of these network will use it for free (people living in low density areas and part of the Fon network).
- In low density areas where broadband is available, the network will probably not generate a lot of revenue since most of the users could have an incentive to become part of the network as a Linus.
- People who don’t get access to broadband right now (like low-income neighbourhood) are not gaining much from this deal. They will have to pay to use the network in any case and the monthly fee will be higher than getting a connection at home. This does not really go with what FON founder, Martin Varsavsky, say about his dream to bring equal access to everybody.
Fon, as a movement, will probably succeed but it is not sure it can succeed as a commercial entreprise. This will depend of the growth of the interest for outdoor access to WiFi and also some of the rules that Fon sets on their members.
- If the population that is interested in WiFi access grow faster that the people joining the network as Linus, then Fon can generate more revenue.
- If most of the people interested in this kind of access join Fon or their competitors as members, then there will be less and less opportunities for Fon to charge these people.
- As more and more cities deploy wireless networks, the value of Fon in these cities will diminish as well
Fon also need to make the rules for membership more clear. In his post announcing the support Fon received, Martin Varvasky talked about 120 days of membership. I am not sure what this means.
If you capture FON´s signal and you are not a fonero in 120 days you will have to pay to use the FON signal (Martin Varsavsky)
Unless I missed something, this could mean:
- that somebody need to be a member of Fon for at least 4 months before being able to benefit from free roaming? OR
- Does it mean that the people he calls Aliens can get away with not paying if they do register within 4 months of the access.
In both cases, this is something that could bother a lot of people.
- If you are trying to make money out of your acces point, (2) could mean you that you will have to wait 4 months before getting your first check and only then you will know for sure how much you made.
- If you want to get free roaming, (1) would mean that you have to setup and share your access now but you need to pay for roaming until the 4-month period has ended.
If I am right then the system don’t work as most people expects and the incentives to become part of the network become much lower.
And this is not the only problem that Fon is facing. I believe the 120 days rule may have been setup to limit freeriding on the network. Indeed, not only would Fon needs to monitor all these access points, but it may need to set a minimum threshold on hotspot usage to let users roam. I can setup today an access point with the Fon firmware and put it where nobody can access. Doing this, I bring no real value to the network but I can roam on it for free. Same thing with the account management. Since I don’t have to pay Fon to get an account if I am a Linus, what prevents me from sharing it with all my friends.
WI-FI AND THE LAW
Fon also needs to figure out clearly the legal implications for its customers and members. in several countries, operating a network requires the operator to log all connections and even in some case get a telecom operator licence. Laws are also not clear on whether a person sharing his/ her connection can be liable for the activities
No. As long as you have not actively participated in the commission of a crime or do not have knowledge that a particular individual is using your connection to commit a crime or illegal activity, it is our understanding that you are not responsible. Nevertheless, this may vary depending on the laws of each country. Furthermore, FON discourages any inappropriate use of your connection by making sure that each user of the FON Community has registered and is identifiable.No. As long as you have not actively participated in the commission of a crime or do not have knowledge that a particular individual is using your connection to commit a crime or illegal activity, it is our understanding that you are not responsible. Nevertheless, this may vary depending on the laws of each country. Furthermore, FON discourages any inappropriate use of your connection by making sure that each user of the FON Community has registered and is identifiable. (FON F.A.Q)
Fon say that its users are not liable but then says that it depends. This F.A.Q entry is really confusing and they shouldn’t state something in regard to the law if they are not totally sure.
And this does not include authentication, billing and other security issues that are going to come up shortly. Whether Fon succeed or fails, it will at least help advance the design of next generation wireless networks by forcing some of the issues to get figured out.