While details on the agreement are still scarce, both companies could realize a substantial benefit from the combination. FON will get an established and powerful partner in the United States and Time Warner will be able to flesh out its cable broadband, instant message, and voice-over-IP offerings.
Based in Spain, FON already has deals with France's Neuf and British Telecom to deliver its service. FON, which has a range of investors, including eBay's Skype and Google, has been gaining traction in the U.S. at a slow pace. It often signs up customers in high-visibility promotional events.
FON provides users with a wireless FON modem that generates a Wi-Fi hotspot, which can be used for free by other FON users and for $3 a day by others. Revenue from individual hotspots is shared between users and broadband providers. FON hopes to reach a critical mass of users who will be able to access FON hotspots virtually anywhere they need Wi-Fi service.
Last month, FON said it raised $13 million from undisclosed investors to buttress the $24 million it had previously raised.