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It's an interesting proposition, and it's not using current router tech. Basically, each person who connects to a router would be separately encrypted, presumably through a shared key. The problem is that once someone can connect to a router it isn't too difficult to listen in to other people's traffic. If each connection is separately encrypted, you pretty much eliminate that possibility.
https://www.eff.org/deeplinks/2011/04/open-wireless-movement (their site kinda sucks, on my browser I have to scroll down quite a bit to get to the text)
http://mobile.slashdot.org/story/11/04/28/150241/EFF-Advocates-Leaving-Wireless-Routers-Open
At the same time, you have the issue that people are getting raided by ATF/DHS/MOUSE at 3am, getting guns pointed at their head, having people with guns shout at them that they're child molesters, and they didn't do anything: people used their open connection to download porn, and in one case, send death threats to the vice president. I'm not entirely clear on how full encryption will prevent this. But for the time being, I'm keeping my router encrypted, no broadcast SSID, and MAC filtering. It's not totally hack-proof, but it's as close as I can easily get. I'd like to have an open router, but if I do, it's going to have all connections logged.
https://www.eff.org/deeplinks/2011/04/open-wireless-movement (their site kinda sucks, on my browser I have to scroll down quite a bit to get to the text)
http://mobile.slashdot.org/story/11/04/28/150241/EFF-Advocates-Leaving-Wireless-Routers-Open
At the same time, you have the issue that people are getting raided by ATF/DHS/MOUSE at 3am, getting guns pointed at their head, having people with guns shout at them that they're child molesters, and they didn't do anything: people used their open connection to download porn, and in one case, send death threats to the vice president. I'm not entirely clear on how full encryption will prevent this. But for the time being, I'm keeping my router encrypted, no broadcast SSID, and MAC filtering. It's not totally hack-proof, but it's as close as I can easily get. I'd like to have an open router, but if I do, it's going to have all connections logged.