FON to Offer $5 Wi-Fi Routers

Spanish startup FON, which is aiming to set up a worldwide network of free Wi-Fi hotspots, said Sunday it would sell 1 million routers for $5 or 5 euros, as long as the purchaser promises to use it to share his Internet connection. The program will cost the company some $60 million to undertake.

Either a Linksys WRT54GL or Buffalo WHRG54S would be supplied to the user with the FON software preinstalled. Once a user shares the connection, in return the user would be able to use any FON hotspot for free. If not, a $3 daily access charge would apply.

There would be a penalty for those who do not register their router with the service, FON said. Those not on the network within 30 days would automatically be charged either $45 or 45 euros, depending on location.

"We are not making any money off of the sale of these routers," the company said. "So all we are asking is that you use the router as a Fonero."

FON first made headlines in February when it announced that it had secured 18 million euros in funding from both Google and Skype, plus two investment firms. The company planned to use the money to build out its network, which it then hoped would reach 1 million hotspots by 2010.

However, FON has since moved up that timetable. It hopes to have 50,000 working hotspots by September, 100,000 by the end of the year, and 1 million by 2007. Currently, the service has some 54,000 registrants.

The legality of FON isn't exactly clear. Some ISPs bar their users from sharing their connections, which could lead to lawsuits by cable and telephone Internet providers. But so far, no providers have publicly come out in opposition to the project.