Google and Skype invest in 'Napster of Wi-Fi'

Spanish start-up Fon is to build the world's largest Wi-Fi network

Google and Skype have joined an international consortium that is pouring €18m into Spanish start-up Fon to build the world's largest Wi-Fi network.

Fon works by signing up private Wi-Fi users who agree to share their signal with other users, known as 'Foneros'.

The company has been likened to Napster in aiming to create a peer-to-peer wireless network that will allow seamless access without needing to build a network of dedicated hardware.

"What makes each of these firms great backers for us is that deep in their DNA is the idea of brand new business models, tons of innovation and a commitment to making the digital world easier and cheaper. We feel the same way, " wrote the company in its blog. 

Foneros fall into three categories: Linus, Bill and Alien. Linus users share up to 50 per cent of their bandwidth with other Foneros free of charge, and in exchange can use the signal of Linus subscribers.

Bills charge other users for their bandwidth and are in turn charged by others. Aliens wanting to use the network will have to pay a fee, providing a revenue stream for the company.

But the business model violates most of the service agreements currently in operation around the world. Fon hopes to get past this by sharing revenues with the ISPs.

The company is aiming to get a million hotspots up and running by the end of the year. In contrast the largest commercial networks have barely 30,000 nodes.