The technological basis for Funkfeuer was developed in the 1990s by Franz Xaver's Team of network engineers while working for the Internet Service Provider Silver Server. It was one of the very first ISPs to experiment with data-links based on wireless LAN. At that time, they had already earned a reputation for technical innovation by creating an additional internet backbone called the Vienna Backbone Service, based on DSL technology. (This at a time when DSL was a widely untried and unknown technology). The main focus was on Point-to-Point connections, attempting to extend or replace the DSL-Links with wireless radio links. However, after a long test-phase, Silver Server decided that WIFI was not yet ready for commercial deployment.

The nodes and hardware infrastructure of these links were handed off to the associations Team Teichenberg and Public Voice Lab, which were hoping to use them for their new business idea. Under direction of Franz Xaver and Roland Jankowski, the network was expanded to count 15 nodes. Unfortunately, their company did not manage to create a solid framework for end-user internet access products. Mainly because, at that time, there weren’t any cheap GNU/Linux based embedded devices.

In order to offset the high cost for individual nodes and their maintenance, the network was to be decentralized and the city's population was given the opportunity to buy the hardware at it's cost. This was the first step towards a free network. The networks rapid growth however, did not begin before the advent of GNU/Linux ports to low-cost embedded hardware.

With decentralization arose a new problem, as now there was no operator responsible for organisation, technical support or external communication. Friendly society Funkfeuer was founded to address just these issues. Committed members and society's officers like Markus Sulzbacher, Andreas Marksteiner, Bela Eckermann, Aaron Kaplan, Wolfgang Nagele, Gerhard Poller and many others were now involved in the construction and organisation of the network.

In the meantime, the idea behind Funkfeuer spread into the remaining states of Austria: New local initiatives arose in Weinviertel in Lower Austria, spearheaded by Christian Kurta, in Bad Ischl in Upper Austria, initiated by Bernd Schröckelsberger and in Graz in Styria, started by Othmar Gsenger, Erwin Nindl and Roland Jankowski. To be applicable for local sponsoring, societies outside Vienna were founded.

By now, the project had grow to far over 300 active nodes in Vienna and more than 130 nodes in Graz, with no end in sight. With continuous innovation and a wide range of services (e.g.: free VoIP, XMPP) the network offers it's members additional value.

In August 2010, the Wireless Summit for Community Wireless Networks (http://wirelesssummit.org/) was, for the first time ever, held outside the USA in Vienna. At about the same time, there was also increasing interest in connecting the various local initiatives within and outside Austria into one big network using community infrastructure. At this time, an international link between Slovenia, Croatia and Austria is being actively worked on.

Proactive research on mesh routing protocols is meant to prepare the network for further expansion and mobile usage. Dynamic, self-organizing, comprehensive networks spanning thousands of nodes, the goal of many university research projects, may soon became reality thanks to Funkfeuer.