Does Fon Charge UK VAT to Americans?

2013/02/09

Well, Fon’s 7th birthday was on the 6th of February (counting from their official launch date in 2006), and to my surprise, they’re still in business! Still selling 3rd rate, re-badged, proprietary hardware to fools who hoped to make some wifi money. These poor fools have *purchased* routers which they now must use to provide free service to all of Fon’s e-partners! That’s why anyone partners with Fon; free advertising for a sketchy hardware vendor, free wifi for their customers.

The POI downloads have been promised to “be right back” for two years now. Understandably, since the POI was an excellent vector to track the growing distance between reality and Fon’s official hotspot and membership stats. The original boards.fon.com was removed and replaced with the sanitized forums.fon.com. I popped in there to get up to date on the POI issue. All the names are different, but the new board is full of the same frustration and complaint as the old one. The forum’s a hole to waste people’s efforts, folks! I didn’t find out who the moderator was or who the current pro-Fon troll-who-could-not-be-banned was.

I’ve decided to dip into the old history bag and resurrect a post I’d earlier discarded. This is an email exchange between myself and Fon “customer care”. Always beware when they replace the word “service” with “care”.

It had been my observation that, like the UK region, Foneros in the USA were only getting around one third of the money from sales at their hotspots, and nowhere near 50%. Fon swears they split the profit 50/50. Now, in the UK there is the Value Added Tax to deal with. This doesn’t apply to the USA, so why weren’t we getting a larger percentage? Worse yet, Fon hotspots in the USA only charged $3, which is considerably less than €3. Fon didn’t itemize deductions, so I thought it would be a simple matter of asking them directly. Hold on to your seats, because what follows is a fast ride into a brick wall.

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Fon Terminates Support for Fonera Routers, Fon Community Furious

2010/02/13

Martin’s cheerful post yesterday, about yet another router model, didn’t go over well with the Community of worldwide Foneros. Comments were open, so everyone jumped on poor Martin’s case about the previous router models which still aren’t stable, particularly the latest one, which has been abandoned for several months with major issues still pending.

Martin’s blog post is an absolute HOOT to read. The angry, cheated Fonero Community descended upon him, demanding action, and his response was to literally cry and attempt to make Foneros feel guilty that his skeleton staff is overworked. Sorry big boy, the burden of guilt is entirely upon you there!

Martin clearly regards EVERY critic as “a troll” and proposes that Fon is somehow entitled to more compliments. I think it’s clear that he has an idyllic image that he refuses to let go of, and he will not listen to reason and see Fon for what it has become to those of us who actually comprise the Fon Network. This reminds me of the attitude of Fon’s Board moderators, who actually warn people to stop complaining until some more compliments pile up to offset them. Martin lives in such a bubble! He thinks he can manage Fon’s image by simple decree. But he’s just painting posies over his own windows.

Random things we learned about Fon this time:

  • Fon seems to be abandoning the “Fonera” moniker, as the new model is just called “SIMPL. This could be at the request of the still-unnamed telco Fon E-Partner at hand.
  • Fon is still just a spunky lil ole start-up that deserves more time, another chance, please be understanding, etc.
  • The Fon Network has “over a million” “daily users”. Interesting twist of English. He also claims “over a million” “Fon hotspots” but notice he doesn’t distinguish hotspots from users from members. In fact, as usual, he blurs them together whenever possible. In truth, Fon has only a few tens of thousand active Foneros (members/volunteers/contributors), about as many native hotspots (La Foneras), even fewer Aliens (guests/paying customers), and the rest is just partner hotspots being added simultaneously to both “member” and “customer” columns. *See update below.
  • Martin claims 23k “Fonera 2″ have been sold. The way he phrases it, he avoids distinguishing between 2g and 2n models, probably to conceal how few 2n routers were sold.
  • Fon employs less than 40 people now, from a high of around 130. They’re about to double the number of native routers they’ve ever sold, but no word if Fon will hire any more employees on… even while Spain suffers particularly high unemployment.
  • Martin admits that Fon has ceased supporting every previous router model, because their new 400k girlfriend needs all of their attention. And won’t Foneros just understand that and stop bothering them?
  • Despite Fon Boards and Martin Blogs being choked with complaints, Martin exclaims that he’s simply *sure* that most people are delighted with their Foneras, and they’re so happy we simply don’t hear from them!
  • Martin feels that La Fonera 2.0g works “pretty well” and since they also briefly offered discounts to upgrade, that this is good enough “support” for previous router models.
  • Over and over, Martin scolds commenters for their “disrespect” of Fon customer service staff. Except that noone’s complaining about the other staffmembers. This is Martin’s personal blog, after all, and they’re writing DIRECTLY TO HIM. It’s his leadership most of us have problems with. That’s what he’ll never accept.

IMHO, Fon is really stepping backwards to “simpler” routers because Fon has discovered the hard way that they don’t have the brand recognition to unload more expensive gadgets like La Fonera 2.0n. People are more likely to buy a cheapo router from an unknown company (like Fon), than a fancy expensive router. Problem is, this new one is still about $20 too much. Fon has also realized that it can’t construct nor maintain complex firmware, but they’re not going to admit that either.

Fon SIMPL’s sticker model number is 2305E. I expect it’s a re-badge of some other brand, as always. Perhaps in a few months, we’ll find manufacturer’s firmware to slap on this puppy. Check out Steven’s gallery of external photos here.

Anyone going to this “Mobile World Congress” can find more information about the Con, as well as some incorrect information about Fon here. Despite what it says there, Fon didn’t start the wifi revolution, Fon didn’t start with the Fonera wifi router, and Fon didn’t sell La Fonera when it launched in 2006. La Fonera 2.0n is not the most innovative; it’s a poor, faulty copy of routers many others have been selling for a couple of years, Fon is not the largest wifi community, but it contributes slightly to larger “partners” which make a considerable aggregate network. The numbers given about “members” and “hotspots” are blatent lies. Also, Fon forgot to mention one of their partners, McAfee, by which Fon is Safe!

UPDATE: In addition to Martin’s silly comments, see his silly new post in response to the complaints: Fonera 2.0n Quality Survey

*UPDATE2 to bullet point 3 above: According to FrancoFON’s database of the Northern Hemisphere on Feb 17 2010, there are a total of 691,000 active Fon hotspots including partners BT(364k), Neuf(82k) and Livedoor(176k) and 68,000 active La Fonera routers. They find 141,000 inactive La Foneras. A bit of quick research adds Fon partners ZON in Portugal – 100k circa 2/2010, Comstar in Russia – 2,000 circa 12/2009 and E-Plus in Germany for up to 25k circa 6/2009. That leaves 200k hotspots missing, unless we count Fon’s inactive routers, leaving us only 40k short. I know of no way to find out which partner hotspots are also inactive, but it becomes clear that Martin’s “over a million” statement is broad exaggeration. Fon’s contribution comes in at 5th (of 7) place (or 3rd if you unfairly count dead hotspots).

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Consider that Martin stated on Feb 3, 2010 that “It took Fon almost four years to sell half a million WiFi routers known as Foneras.” Since all live, plus dead Foneras only total 209k, this means that 291k Foneras were allegedly sold, but were never registered to Fon!

This picture gets far grimmer if you add “half a million sold” to an additional “15 million worth” of routers which Fon gave away. Fon sold La Fonera v1 routers for as little as $1, but in my mind, Martin would cleverly count that as “sold” and not free.** Only v1 routers were given away. Martin claimed that v1 was sold at practically cost, so at regular price of $29, that means an additional 500k routers were given away, an oddly convenient number. So if Fon has indeed *distributed* a full million routers now, only 209k were ever registered (21%, or 1-in-5) and only 68k remain live (or 3-in-10 of every router registered), which is about 7%, or 1-in-14 of all Foneras ever distributed!

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**It’s also possible that Martin is adding the same numbers into two columns again. He might count the “discounted” routers as both fully “sold”, and also a “fraction” of a free router by attributing part of that $15M to offset the amount of the discount. Warranty replacements probably also get relabeled as “given away” too; they additionally count as increments to Fon’s hotspot network (one dead router + one replacement = two purportedly available hotspots). Frankly, i’m weary of peeking down all the possible rabbit-holes. In this article i’m pretending that Martin’s statements are legitimate. If he’s outsmarted himself with statistical sleight of hand, and made Fon look bad, that’s his fault.

UPDATE3: Martin’s still at it. In his Spanish-only blog now, he whines about how English people are rude, and expresses that he thinks he’s entitled to praise for his “incredible work”, never mind the results. Again, he suggests that his poor staff’s feelings are hurt by any critical feedback (I wonder if this means Iurgi has been threatening to quit? Oh boy!), blind to the fact that the comments were clearly directed just at him. He again unambiguously admits that support for La Fonera 2.0g is terminated. That model was sold as beta for 6 months starting in Oct 2008, sold as “public ready” in April 2009, and the last firmware for it was issued Oct/Nov 2009. This suggests that Martin considers his company’s obligation finished after only about a year.

UPDATE4: A week later, Engadget finally posts their benign and obligatory article about SIMPL. Please visit there and ADD YOUR COMMENTS! Also, visit the online petition to Fon here.

In the event Martin’s blog posts get removed or censored, please check back here for my snapshots.


Fon Forgets Its 4th Birthday Too

2010/02/06

Yes, it’s been 4 years now since Fon launched. Like its 3rd birthday, Fon has forgotten it!

The Fonero Community, twice reborn, is MIA again.

Promises, promises, so many promises. So many broken promises. So much wasted time and money.

Now, Fon CEO Martin Varsavsky has made the incredulous claim that someone ordered 400,000 Fon routers of some sort. What model, why they had to come from Fon, who only rebadges routers, and who the buyer may be is unknown. But there are enough blanks in Martin’s announcement, that this could mean almost anything. My best-case scenario is that Fon has arranged to supply a coupon-code for a Fonera, to purchasers of the Android phone or even that disappointing abortion known as the Ipad. Get ready, my friends, to give free wifi to all these new folks, who have also paid Fon up front, and funded their network deployment.

Imagine my shock, that none of the news and tech blogs I follow have mentioned this, Fon’s latest crackpot tease. Considering all of the times before that Fon’s press releases have turned out to be polished puckey, any further attention could result in total collapse of Fon’s credibility. Ask anyone on the street; “do you know what Fawn Wifi is?”, and they’ll likely shrug and turn away.

I watched the 1954 and 1999 versions of George Orwell’s Animal Farm last weekend. I suppose that story could represent any number of present-day associations, and it fits Fon well too. Playing to emotions, while concealing the facts. Ever-moving goalposts. Quiet political purges; assassinations. Blatant editing of history. Treating the membership as chattel, while hiding behind masks of fellowship. Faustian bargains with third parties, without the membership’s consent nor desire. The Spanish are indeed familiar with fascism. Should I be surprised?

Foneros, if you are still out there, please comment below. Tell me what you plan to do with Fon this year.


Foneros Panic as Major Legal Loss for Fon Surfaces

2009/07/10

Fon has been keeping their mouths shut about a legal case in Germany (DE) that they lost LAST YEAR, when the courts ruled that Fon’s resale of Internet service constitutes a breach of DE fair business practice. They’ve also lost the appeal, and the ruling was declared “provisionally enforceable”. This means that Fon can’t charge money for their services throughout DE, even while a second appeal gets under way. Fon remains noncompliant at this time.

Fon CEO Martin Varsavsky issued an unconvincing statement downplaying the seriousness of the matter in his Spanish-only blog:

There are rumors that the FON network was outlawed in Germany. This is not true. We lost a lawsuit against a small operator who does not want its customers (to be) Foneros, but we are negotiating with them to (make them) realize that, like many other operators have realized, that Fon is a good business for them.

Martin still hasn’t gotten around to posting to his German-language blog audience!

Fon issued a similar statement (plus advertisement) for David Garcia (Fon Customer Service) to relay to those concerned within the English Fon Board:

We lost a trial for unfair competition with an ISP that their legal team dosn’t want that their customers share their internet connections, but besides appealing against this rule we’re also negotiating with them to make them realize that Fon is good for their business, as it has happened with other ISPs and mobile phone companies such as BT in UK, ZON in portugal, Comstar in Russia, E-plus in Germany, Neuf in France, etc.
Those companies know that Fon is their partner and it helps them to get a better appreciation from their customers, offering them not only internet at home but at hundreds of thousands of other places.
Also, let me reassure that this ruling only affects FON as a company and not to the Foneros, be them Linus, Bills or Aliens.

These reassurances are weak, as it has been clearly said the DE courts outlawed Fon’s business practice itself, not just within the scope of a single plaintiff.

The Timeline:

 

  • Nov 11, 2008: FON lost the first trial, Foneros kept uninformed.
  • June 05, 2009: FON lost the second trial, judge rules “The decision is provisionally enforceable”. Foneros still kept uninformed.
  • July 07, 2009: News is broken by a German Legal Weblog Telemedicus with this article and this posting of the court ruling (links lead to English translations).

 

The court’s decision is that FON has to pay €200,000 due to the Security issues this causes, €25.000,00 for failure to comply by providing a list of Foneros which are customers of Plaintiff “1&1″. Due to losing the second trial, it seems these amounts are now increased to 110%. Upon FON’s second conviction, each breach requires payment of up to €250,000 – or six month’s imprisonment, and halt FON operations for that duration.

Fon proposes to Foneros and the Press, that it is appealing the second ruling, and at the same time, pursuing a “partnership” with the Plaintiff, “1&1?. It is not explained why they believe they will succeed now, when presumably, failure to “partner” resulted in the lawsuit in the first place. Nor is it clear how they can pursue an appeal without offending the Plaintiff at the same time.

What will happen to Foneros in DE, if Fon loses the right to operate there? At the least, there will be no more sales of passes to Aliens there. Free roaming will probably continue among Linuses and visiting Bills. However, a major component of the Fon System will be destroyed.

It is also unknown what effect this legal loss will have on Foneros in other countries, who may belong to ISPs which are also unwilling to passively participate. Can we depend on Fon to accurately turn Day Pass sales on and off at will, depending on the Fonero’s ISP? Will Fon update older La Fonera WiFi router’s firmwares to permit disabling sharing? – this is a feature now found in La Fonera 2.0. If Fon updates older firmware for that feature, will they consider including the software-based improvements which they have seen fit to provide only in newer hardware?

If Fon cannot resell Internet service in DE, what could they sell in that territory instead? Perhaps they will take my gift idea of using the routers to host VPN servers so they could sell privacy and security enhancement services? Foneros and Aliens worldwide would appreciate this as well!

Elfonblog thanks skynetbbs for providing translation of the lawsuit timeline.


Bandwidth Rationing by Monopolies

2009/04/10

If you’re a high speed Internet customer in the USA, particularly of Time Warner Cable, you can’t have missed the exploding controversy about their plans to impose bandwidth (download?) limits and charge customers who go over that limit.

Let’s just establish some facts here: bandwidth is not a product which is manufactured and consumed. It is 100% recyclable. No bits, bytes or gigabytes are being destroyed in the process of providing it to people. Bandwidth does not really cost ISPs anything to transmit beyond the cost of keeping the network equipment turned on and air conditioned! Bandwidth is merely the equivalent of a certain percentage of the network’s attention for a certain period of time. If everyone shut their cablemodems off at the same time for a day, TWC’s costs would drop only by an insignifigant percentage!

Another fact: there is no such thing as a “bandwidth hog”. Customers who download very little do NOT “subsidize” customers who download more. Bytes are not manufactured things which are consumed in the course of use. It is not ounces of fuel or kilowatts of electricity. Customers have contracts for “as high as (LOL)” speeds, and unlimited bandwidth over the course of the billing period. No one actually manages to acquire that much bandwidth, let alone exceed it! It’s true that the telcom monopolies have oversold their Internet service, but that is not the fault or problem of the customer. We’re not “hogs” just because we download and upload a statistically higher percentage than the grandma living next door!

There’s simply no other fair way to provide and bill Internet service other than by rate/sec over the billing period!

Another fact: a fully-utilized network costs only 7% more to maintain than an idle one, due to slightly higher cooling expenses, and long-term equipment wear.* THERE ARE NO BANDWIDTH SHORTAGES except where TWC and other monopolies are causing them as a pretense to raise prices and ration it!!

TWC would rather spend their magnificent profits on yachts for every day of the week than to upgrade their networks to meet their customer’s needs. They have no substantial competition! The bottom line is that in the short term, TWC is trying to kill video and voice services other than their own, by placing such an insultingly low threshold to start charging “overages”. In the long term, TWC is trying to link a fixed price to an irrelevant unit of measure, when the cost of providing the service is really dropping, even though technology makes much higher speeds possible.

If TWC imposes bandwidth caps of ANY KIND, I will abandon them immediately. If there are no alternatives, I will form a co-op with all of the neighbors on my block: those of us with Internet service will pool our connections together with the multi-WAN router I have sitting on this shelf here, and we’ll sell it to the rest of the neighbors and split the cost all around. A little bandwidth monitoring and management will ensure that we rarely go over our “limits” and if TWC feels “screwed” about this, then all I can say is that i’m not bringing any lube.

Customers of Time Warner Cable: please click the link below to join the online petition opposing their bandwidth caps:
Time Warner Cable Road Runner Bandwidth Cap

4/14 Addition: I am beginning to suspect that this is all another trick. Last year, ISP monopolies “gave in” to their customers who opposed packet filtering. And while people were still cheering, they blithely added “we’ll just throttle instead”. And isn’t that what they wanted to do all along, hmmmm? Now here we have what looks like a similar setup: absolutely ridiculously, insultingly low downloading caps that are guaranteed to raise a public outcry. Let us begin to anticipate what it is that TWC really wants, if it is not tiered downloading caps and Draconian overuse fees. Let us not be fooled again. TWC is probably following in some other telco’s footsteps here, and TWC’s experiment will serve as a testbed for every other greedy monopolistic ISP in the world, and believe me, the only kind of monopolistic ISP is a greedy one.

4/21 Addition: It seems that Time Warner is in tears, is taking it’s ball and going home. News is coming in that they’re not going to roll out DOCSIS 3, or offer higher speed connections. Sounds like punishment to me. TWC to Customers: You Don’t Want Tiers, You Don’t Get Super-fast Broadband

*I learned about this a couple of years ago, in an article which quoted a frank admission by a company president of a big backbone provider. I have been unable to find the URL, because the search terms “network neutrality” have too much noise to signal in a Google search. However, here is a new NYT article that makes the same point almost as well as the one I remember:
As Costs Fall, Companies Push to Raise Internet Price


Fon’s Three Year Anniversary

2009/02/06

It’s today. Let’s go see if Fon forgot again, like they did last year. :D


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