Martin, the founder and CEO of FON says Fon is “a software download that turns your router into a global family of routers.” [Disclosure: I’m on Fon’s board of advisors. Also, as usual, all of this is me typing quickly and paraphrasing, and I’m certainly getting much of what Martin says wrong in content or tone.] He says Fon will soon be the largest wifi network in the world: There have been 20,000 registrations that need to be converted into hotspots. Fon hopes to build a “wifi nation.” “We unlock the wifi nation that already exists.”

Fon has found a model liked by the ISPs, he says. “If you’re a Fonero [subscriber] and a bandwidth donor, you get wifi for free [when you leave home]. If you’re a fonero and not a donor, you pay $2 a day.”

Fon raised $21.7M from Google, Skype, Index Ventures and Sequoia Capital.

Martin says that the day he had the Fon idea, he blogged it. People thought he was nuts for not keeping it secret.

Fon will give each Fonero a page to show her neighbors who she is. He hopes there will be little apps, such as one that lets people virtually knock on a neighbor’s door to see if they’re in, etc.

Fon will grow, he says, through blogs, ISPs, hardware manufacturers, and Web sites. He says that while Fon has a relationship with Cisco, it’s not bound to use Cisco equipment, or to use any of the other investors.

Right now, Martin says, it’s not so easy to download and install the Fon software. It’s better to buy a Fon router for $25 (which costs the company $20).

Q (David Isenberg): Has there been any feedback from Sprint about the fact that their stock symbol is FON?
A: Nope.

Q: How are individual Fon users going to be billed and how will Fon providers be provided?
A: We’re trying to figure these things out. We’ve hired a billing company that does a lot of billing for mobile operators. There are lots of choices presented to us: Credit card, bill, pre-pay, PayPal. I’m guessing that the first time you use it, you’ll pay $10 for five days you can use any time in a year. We’ll reimburse the ISPs when the expense is incurred. If you’re a Bill, most of the money goes to you, and we and the ISP split.

Q: (Isenberg) Are any functioning Foneros getting flack from their DSL/Cable provider so far?
A: No. They are waiting and seeing. The ISPs like the fact that with Fon you only share with people who have paid. And it’s an incentive to switch from dial-up. We’re friendly to ISPs and to users; we think we have found a new balance. We think we have a sustainable wifi system: You pay at home and have wifi anywhere in the world.

Q: How do you limit bandwidth for visiting Foneros? Do you have an idea what the standard will be? And what about security?
A: (Ejovi) The user can limit how much bandwidth and/or how many simultaneous accesses. We don’t know what the minimum amount of bandwith will be. For security, we separate your private network from the one the Foneros connect to.

A: (Martin) Our software is based on open source: OpenWRT.org and dd-wrt.org. [Urls corrected – dw] We contribute to the person who does this open source work. Over 100,000 hotspots use this software. We haven’t had complains about the functionality of the firmware.

Q: Why separate the Linuses from the Bills? A Linus in a lonely spot gets free service without providing any actual bandwidth.
A: We have other incentives for becoming a Linus. For example, we’re working on meshing capabilities so you can have a neighborhood LAN. We’re also doing some work on a download accelerator: When you want to get something, you pool the connections of your Fonero neighbors. (This is R&D, Martin says, not an announcement of features.)

Fonero isn’t your neighbors, Martin says. Your neighbor isn’t going to pay $2/day. The typical Bill, though, is a cafe or bar owner.

Q: (me) How does Fon get over the critical mass issue?
A: This is the big issue. So far so good. Indifference could kill Fon. If we don’t capture the imagination of people, I guess we won’t succeed. We’ve seen a lot of enthusiasm. A lot of people want to share. We have to work on all the elements: The meshing, the downloading, the social aspects. And we hvae to work on our communication so people agree to do this.

A: There’s a trade off in range and bandwidth. Our software allows us to tweak that. Maybe we should think about playing with this depending on the topology of the location.

Q: Fon can make the traffic less bursty and more flat, but the ISPs business model is based on burstiness.
A: It depends on the ISP. It’s more monopolistic in the US. If Foneros are using the same ISP, it doesn’t really matter. What’s important to me is that everyone have access to the same content — preferential treatment by the ISPs is bad because the little guy should have the same chance as the big guy.

Q: What about municipal wifi?
A: It seems reasonable for a city to put wifi into public places, but not that it should become a provider. In the Fon way, a city collaborates with its citizens. The $2 saves the telecom operators; without them, we wouldn’t have the Internet. I think the best model is muni wifi in public places and citizen wifi for the rest. It’s hard to imagine how Fon could provide coverage in Central Park; for that you need a company like Tropos. I see an opportunity for many compatible models, but not for a city to take over and try to become the telcom operator. A city could provide free routers to low income areas. We are talking with many cities; Andrew Rasiej is working to cities in the US. [Tags: fon wifi martin+varsavsky]

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