BT Learns to Spell Phone F.O.N.
BT announced today that they have teamed up with WiFi sharing community FON, which means that all BT Total Broadband customers can become part of the FON community. — FON, if you have not come across it before, is an interesting social experiment …
Context & Ripple Effects
FON has spent 18 months proving the model works at the edges: the Madrid-born community of 'Foneros' who install FON software on their home routers and share a slice of their bandwidth, backed by a $21.7 million round led by Index Ventures with Google, Skype and Sequoia Capital participating back in February 2006. What it lacked was a carrier willing to put its entire subscriber base behind the idea.
That changed when GigaOM asked in March whether BT was about to invest in FON, alongside rumors of a new funding round involving Google and Skype. Today's announcement answers the question: every BT Total Broadband customer can now join the BT FON Community, aimed at hundreds of thousands of hotspots covering the U.K. — the largest WiFi community in the world gaining a national telco as its distribution channel.
First-order effects
- BT Total Broadband subscribers can immediately convert their home routers into public FON hotspots, giving BT a nationwide WiFi footprint built from customer hardware rather than capital expenditure on its own network.
- FON gets what no grassroots campaign could deliver: a single deal that potentially adds hundreds of thousands of U.K. hotspots overnight, making BT its anchor carrier.
Second-order effects
- Rival U.K. broadband providers now face a coverage asymmetry — BT customers get community WiFi across the country while theirs do not — pressuring them to either adopt a similar sharing scheme or discount against BT's bundled hotspot benefit.
- The deal validates FON's pitch to other telcos and ISPs worldwide, giving founder Martin Varsavsky a reference contract to shop to carriers in other markets.
Third-order effects
- If subscriber-shared hotspots become a standard broadband feature, the competitive unit for ISPs shifts from raw line speed to the size of the roaming footprint a subscriber joins — turning each customer's router into contested infrastructure.
- Carrier adoption of crowdsourced WiFi points toward mobile operators leaning on residential broadband for data offload, blurring the line between fixed-line ISP and wireless network.
The trend: Broadband providers are converting their subscribers' home routers into shared public WiFi networks, trading customer bandwidth for a national hotspot footprint that no single operator could build alone.