Dreams of a worldwide wireless Web
Sitting on the porch at Finca Torrenova, his 800-acre retreat on this Mediterranean island, Martin Varsavsky ticks off the credentials of the group of Internet entrepreneurs finishing lunch at a nearby table.
“He has 40 million uniques, he has 50 million, and he has 8 million,” Varsavsky says, referring to the number of visitors to Web sites owned by his guests many of whom are also business associates and have joined him for several days of brainstorming about the digital future.
These days, commercial victory on the Internet is all about scale, and Varsavsky, a 48-year-old from Argentina, can be forgiven for speaking longingly and in detail about his peers’ achievements. No stranger to success — he has had a tidy crop of new media and telecommunications hits since the 1990s he is still struggling to bring his newest Internet venture to fruition.
Three years ago, aiming to create a global wireless network, he founded FON, a company based in Madrid that wants to unlock the potential power of the social Internet. FON’s gamble is that Internet users will share a portion of their wireless connection with strangers in exchange for access to wireless hotspots controlled by others.
The two camps, known as WiMax and LTE, for “long-term evolution,” are both top-down, highly structured approaches that will cost billions of dollars to build and may close a door on some of the architectural openness that led to the rapid growth of the Internet.
But their potential advantage is that closed standards can encourage the kind of growth that offers more access to mainstream consumers and business users, as occurred when Microsoft imposed a measure of conformity on software development.
For his part, Varsavsky hopes that FON can offer a middle ground deploying the original, bottom-up strengths of the early Internet movement and at the same time wedding them to a more formal, corporate approach to expansion.
Although FON faces huge obstacles in realizing those ambitions, the company also has a growing number of devotees.
“The wireless Internet market today is fragmented and complex it can be accessed through 3G operators, through WiMax, through private hotspots, through paid hotspots and through corporate networks,” said Michael Jackson, a partner at Mangrove Capital in London and a former FON board member. “In summary, it is a nightmare for a consumer. FON can and will change this.”
Undeterred, Varsavsky says that what he currently lacks in scale he can make up for in huge cost savings, particularly because FON avoids the expensive proposition of having to build a worldwide network of cellular towers and Wi-Fi nodes from scratch.
“Our army of Foneros is a much more efficient way of distributing a signal,” he says. “We believe WiMax operators will be happy to have some customers use their services for free and save billions in infrastructure deployment.”
Varsavsky has worked overtime trying to line up more high-profile partners for FON. To that end, he traveled to Cupertino, California, last fall to meet with Steve Jobs, the chief executive of Apple.
