- Internet firm's plan raises questions (01-29-08)
- Sound Off: I read in the minutes of a recent meeting of the Lawrence Freenet project that the nonprofit Internet company was seeking venture capital from Los Angeles investors. How can that be if it is truly a nonprofit company? (01-08-06)
- Company's goal: Free Internet downtown (11-19-05)
- City hatches agreement with Internet provider (10-26-05)
- Lawrence Freenet
Editor's note: The Lawrence Journal-World is owned by The World Company, which also owns Sunflower Broadband. Sunflower Broadband and Lawrence Freenet are competitors in the Lawrence Internet service provider market.
A $4.9 million request by Lawrence Freenet is raising new questions about the company's not-for-profit roots.
The company has promoted itself as a not-for-profit company with a goal of providing free Internet access to everyone in Lawrence.
But company leaders recently conceded that the majority of all the revenue that the not-for-profit receives goes directly to a for-profit company that is partially owned and led by Freenet's founder, Joshua Montgomery.
As Freenet asks for public assistance in a nearly $5 million expansion, some city commissioners have questions about Freenet's relationship to the for-profit company.
"I'm a little concerned about where the nonprofit stops and where the for-profit starts," Mayor Sue Hack said. "It begins to create some cloudiness."
Freenet has been in a contractual relationship with Community Wireless Communications since January 2006. That's when Montgomery started the company with $40,000 in credit card debt and began seeking other outside investors.
Today, Community Wireless Communications owns all the technical equipment, service trucks and employs all of the people who maintain Freenet's wireless Internet network in Lawrence. Freenet's only assets essentially are the right-of-way agreements that allow the network's Internet equipment to be placed on city water towers, traffic signals and city buildings.
Montgomery, who serves as CEO of Community Wireless and as Freenet's spokesman, said that for every $19.98 per month it bills its paying customers, the for-profit Community Wireless company receives $17.
Montgomery said that's appropriate because Community Wireless has spent $2.4 million in private money to purchase the equipment that allows the wireless network to exist.
Some city commissioners said they want to learn more about the relationship between the founders of Freenet and the founders of the for-profit company. Montgomery said he owns about 10 percent of the company but declined to name any other individuals who have an ownership interest in the business.
The for-profit company did not exist when city commissioners originally expressed support for the Freenet concept. In August 2005, city commissioners directed staff to work out below-market rate deals with Freenet to allow them to place equipment on city right of way.
Freenet sent city commissioners a letter in 2006 stating that they were going to do business with the new for-profit company, but the letter did not detail that Community Wireless was owned in part by Montgomery, who was the key individual seeking city subsidies for Freenet.
"I haven't been privy to how those two sides interact," City Commissioner Rob Chestnut said. "But if we have any interest in moving forward at all, we have to get those questions answered."
Montgomery said there hasn't been any wrongdoing. He said he attempted to find a contractor that he didn't have any involvement with to provide the needed services to Freenet but couldn't. He said when he started approaching investors to form a new company, they insisted that he have a personal stake in the company.
"For me it is a completely ideological thing," Montgomery said. "It is completely about making sure that everyone in the community has access to the Internet. It is not about the money."