Volume 76, Number 41 | March 7 - 13, 2007

FON’s logo for its Starbucks wireless-undercutting campaign.

Wireless co.: We’re a latte cheaper than Starbucks

By Julie Shapiro

Enterprising New Yorkers who want to make some fast cash need look no farther than the nearest Starbucks.

FON, an international wireless Internet company, is giving free wireless routers to anyone who lives near a Starbucks. The idea is to undercut Starbucks’ $10-a-day Internet fee by charging customers only $2 — a profit that users will split with FON.

“You get a free router, share the signal and help people save money at the same time,” a FON spokesperson said.

So far, FON has received several thousand orders for free routers from people who live within 150 feet of Starbucks or another coffee shop, the spokesperson said.

Starbucks representatives declined to comment directly on FON’s offer, but said, “We provide a premium service and our customers see value in paying for it. We believe our customers want a fast, guaranteed wireless experience.” T-Mobile currently provides Starbucks’ wireless Internet service.

FON, a Madrid-based company founded by Martin Varsavsky, is just over a year old. The unique FON routers, which offer separate channels for public and private use, form a worldwide network of over 300,000 hotspots, a representative said. Users can choose to share their wireless signal for free and receive free wireless from other FON users around the world, or they can charge for their signal and hope to make a profit.

Dana Spiegel, executive director of NYCwireless — a nonprofit that builds free public wireless networks — is skeptical of FON’s plan.

Most of the FON hotspots Spiegel has seen in New York City are in the apartments of people who live above the first or second floors. Since wireless Internet travels only 100 to 150 feet indoors, “Only a handful of apartments are able to take advantage of the hotspots,” Spiegel said. “Everyone else in New York City has no advantage.”

While some Starbucks are located on the first floor of apartment buildings, others are in business buildings, surrounded by open lobbies with high ceilings, Spiegel said. In these cases, he doubts anyone will be able to take advantage of the FON promotion.

Besides, Spiegel said, sharing one’s Internet service can be illegal. Internet service providers like Comcast and Time Warner do not allow consumers to resell their Internet connection — in fact, consumers aren’t even allowed to give the connection away for free. Smaller companies like Speakeasy and bway.net, on the other hand, allow consumers to profit from reselling.

Spiegel estimates that 99 percent of all Internet connections in the United States fall into the first category, making FON-style sharing illegal.

FON C.E.O. Varsavsky posted a response to this criticism in his blog, saying that FON has not received complaints from Internet service providers.

“We don’t want anyone to violate terms and conditions that [Internet service providers] choose to enforce,” Varsavsky wrote. Still, Varsavsky acknowledged that no Internet service providers have changed their terms and conditions to permit sharing.

FON’s announcement of the free routers caused a stir on online message boards, where posters were split between enthusiasm and skepticism.

On Gothamist.com, a New York City Web site, a poster named “jg” wrote, “Gross. Make Internet free.”

While Spiegel and NYCwireless appreciate that FON educates the public about wireless Internet, he basically agrees.

“NYCwireless has as philosophy that in public spaces, Internet should be free,” Spiegel said. “[FON has] a philosophy that you should be paying for the Internet in some way or another.”

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