Pimp my Pipe!

This blog, and just about every other, except the die-hard telco ones, expounds the value of the stupid network. In other words, what travels across the network is nothing more than zeros and ones.
There are those that say that this approach would make it prohibitively expensive to get connected, although the evidence is much to the contrary (for example the proposed Amsterdam FTTH project).
But the thing that scares the telcos is that they see no way to add value to their service, except in reliability and speed. This is because they are looking at the situation backwards.
They see the end users as their customers and the companies dealing with those users as their potential partners, when in fact they should be seeing the end users as their partners and the companies dealing with them as their customers.

To illustrate this principal, let's take Martin Varsavsky's Fon venture. This is a system that links a whole lot of personal WiFi hotspots together into a single accessible network. If you share your WiFi connection, then you will be granted access to everyone elses WiFi network. It is a partnership, where the greater the number of people who sign up, the more useful it will become. Both to the users and the customers!

How is it going to make money? Well, I don't know what Martin's ideas are, beyond the ability to sell access to the network to people from outside.
This is not where the money is, though!
I mean, if I wanted access, I could just sign up for Fon at home and share my own Wifi access, that would give me free use of the rest of the Fon net.
Fon won't get any money from that, not a bean, but it has a side effect; the network just increased in size (and incidentally, someone just bought a router specifically to use with Fon).

Are you beginning to get the picture?
There's more...

All these people who now have access to Fon are busy downloading and communicating over the Fon network (the internet), but who knows where they are and how long they've been there? Fon does! (maybe more stuff too depending on how the software in the router works).
They authenticate and can easily maintain presence. They could also encrypt and route all Fon traffic back to the Fon backbone. This is almost Googlesque in simple genius (though Google claim serendipity).
With presence, routing and authentication, Fon would be able to deliver any service; voice, music download, photo/video, gaming, filesharing and all the other good stuff.
Foneros could choose to use MS Live/Google or Yahoo instead of Fon, but they still have to make themselves known to Fon, because they have to be authenticated. That makes it sticky.
Google makes billions on this stuff, and yet Fon could be built for virtually nothing, because it is a partnership with the users.

The key is to get a critical mass. It will not be as simple to get that as it was for Skype, the Fon network has to be useful, and the key to making it useful is to make it widely available. Going into partnership with a hotspot operator would be
the easiest way to do that, which I expect is why talks are being held with Swisscom.

Let's just recap on what Fon sells: Interconnect. Essentially it partners with the users to extend the network, in the same way GSM operators have roaming agreements; only the agreement is peering. You can roam onto my network for nothing if I can roam onto yours for nothing.

Will ISPs allow it? The market (in Spain at least) has probably moved past the stage where they could prevent it.
Bandwidth limitations and restrictive practices are less prevalent in developed markets, and those are the places that Fon will target. In Spain, if one ISP shuts it down, there is a good chance that Jazztel and Ya will pick up the churn, if Fon
is popular, that could be significant.