NetZero Launches Free Wireless Service
The company said it will offer a pair of plans: a free 1-MB per month connection plan, and one that allows up to a 10-MB connection for $49.95 per month that users can try free for one year.
After the free period is up, users can select one of NetZero’s paid plans at $9.95 per month for 500MB, $19.95 for 1GB, $34.95 for 2GB, or $49.95 for 4GB.
The company is aggressively promoting the new free plans through TV, print and online advertisements. However, there are some catches that come along with the free service. Since NetZero isn’t offsetting its costs through advertising revenue, users of the free service will be money-losers for the company, said Mark Goldston, Chairman and CEO of United Online, the company that owns the NetZero brand. This means the company is likely using the free plan to entice customers into signing up for the paid plans. These include a $9.95 monthly plan for 500MB, $19.95 for 1GB, $34.95 for 2GB or $49.95 for 4GB.
Another catch of the free service is that users must purchase one of the company’s hardware options: either a NetZero 4G Hotspot, a USB dongle or the $49.95 NetZero 4G Stick.
Finally, the free service is limited to 200 megabytes of data each month, which is roughly enough for some e-mail and basic Web surfing. Half an hour of full-screen streamed video would consume the entire month’s data allotment. By comparison, AT&T’s lowest-cost wireless data plan is $14.95 per month for 250 megabytes, although that plan is only available for tablet devices with built-in cellular modems.
Once a NetZero user reaches their monthly data allotment, the company cuts off Internet access until the beginning of the following month, and prompts users to upgrade to a paid plan.
NetZero said it will only let customers utilize the free service for one year, and users that switch to a paid plan will not be able revert back to the free one.
In a notable twist on the data throttling issue facing most other mobile broadband providers, NetZero is allowing customers to slow down their own broadband speeds to help manage monthly usage. Through a “throttling bar” on a user’s online account pages, users can scale down their service to what NetZero calls “Light Speed,” ensuring that connection speeds never surpass 1 Mbps on the downlink and 384 kbps on the uplink.
Woodland Hills Calif.-based United Online said it is providing its wireless services by renting capacity on Clearwire Corp.’s WiMAX network, the same network used by Sprint Nextel Corp. to provide “Sprint 4G” data service. Several cable companies have also resold access to Clearwire’s network under their own brand.
The network has some weaknesses since it is based on a broadband technology that the rest of the industry has bypassed, meaning the selection of compatible devices is limited. Furthermore, signals have difficulty penetrating buildings because of the frequency the network uses.
Both Sprint and the cable companies used Sprint’s slower cellular data network as a fallback option. However, since NetZero’s devices rely only on Clearwire, coverage at a proper signal strength may be intermittent.
Clearwire has stopped investing in its WiMAX network, and is instead raising funds for a new network that will utilize the industry-standard “LTE” technology.
Goldston said Clearwire has about 750,000 dial-up Internet subscribers left, and that Internet service is only a small part of its overall business. Indeed, the company generates more revenue from its FTD flower-delivery service and Classmates.com.
The Clear network is only available in a limited number of areas, so anyone interested in checking out NetZero’s free service should be sure to check the coverage map before signing up.