Earlier this year when we held one of our first meeting to plan the mesh conference, one of the many distractions was a discussion about FON raising $21.7-million from investors such as Google, Skype and Sequoia Capital. It was a rather controversial deal because FON had enlisted the help of bloggers such as Dan Gilmour, who had some very nice things about FON's potential. The only problem was these bloggers were also FON advisors with an equity  stake in the company's success – but their involvement wasn't totally clear. Since there, there has been very little buzz about FON, which is trying to create a global Wi-Fi network by providing broadband users with modems to share their Internet connections. FON claims to have attracted 40,000 users (including Brady from O'Reilly Radar) in 140 countries, and aims to have 1M access points by 2010. Frankly, it would be surprising if FON hit 1M access points but this isn't to suggest Wi-Fi doesn't have tremendous potential. While municipal Wi-Fi systems are getting a lot of attention and are shaping up to be an important network “pillar”, Wi-Fi could become really interesting as more devices (Blackberrys, Skype-enable phones, smart phones, laptops etc.) are able to easily switch between different networks (Wi-Fi, broadband, cellular). The idea that a mobile phone user, for example, could reduce their costs by  simply switching a Wi-Fi network (free or fee) is interesting from a number of different fronts. The question is whether the carriers will really embrace Wi-Fi, and to what extent they will capitalize on it. A good example is Nokia's new smart phone – known as the E61 in Europe and the E62 in North American. In Europe, the E61 is Wi-Fi enabled while in North America, the Wi-Fi (and 3G) features do not exist or they've been disabled. So, why the difference? How come North American consumers aren't able to take advantage of Wi-Fi? It may have a lot to do with the uncertainy of how Wi-Fi is going to evolve in North America, and how the carriers are grappling with the idea Wi-Fi could affect revenue, particularly if municipal Wi-Fi networks (and FON) gather more momentum over private networks operated by the carriers and outfits such as Boingo.
Update: Om Malik's Web Worker Daily has a post on FON offering a $5 wireless modem if you're willing to share your network. For more on the potential of Wi-Fi, check out this story in Fortune entitled “Wi-Fi, Why Not?”

GigaOm reports that Google's municipal Wi-Fi network has gone live in Mountain View, Ca. following an investment of nearly $1-million. While Google apparently has no intentions of expanding into other markets, it has put the spotlight on the muni Wi-Fi, which is being enthusiastically embraced by cities across North America, including Toronto. The question is if they (including Google) build it, will they come? In other words, does the creation of a wireless network mean it will be used other than by a small group of business people, tourists and geeks? Sure, a muni Wi-Fi network is pretty cheap to roll out but can you get a good return on investment if doesn't get a lot of traffic? Arguably, cities building Wi-Fi have other mandates, some of them have nothing to do with wireless users. Some cities, for example, are simply looking to look cutting-edge so they can attract well-paying high-tech jobs. Others cities have supplementary goals. City-owned Toronto Hydro, for example, which will launch a Wi-Fi network next month, will use wireless technology to read “smart” hydro meters that will be installed in each household – thereby reducing the need and cost of having someone manually read the meter, having the homeowner do it themselves. For the most part, however, many cities will discover their Wi-Fi networks will probably collect a lot of dust but they will probably be enjoyed by the small handful of people who actually use them.
Update: Speaking of Wi-Fi, Boingo has just raised $65-million in new private equity. The round was led by Mitsui & Co. with new investors Mitsui Corporate Development Funds, Steepoint Capital Partners and Red Rock Ventures. Boingo has now raised $95-million from three rounds.