Subsidized Netbooks = Bad Idea

Verizon may soon join AT&T in selling subsidized netbooks, Bloomberg reported this morning. Under such a plan, Verizon would sign partnerships with netbook makers to subsidize the devices for consumers who sign data contracts. (The majority of cell phones in the U.S. are sold this way.) Verizon hasn’t returned my calls trying to confirm this news, but pushing the widespread use of 3G networks on subsidized netbooks is a bad idea. It may not even work. Do the math: $200 or $100 off a $400 netbook doesn’t offset taking on a two-year commitment to a $60-a-month data card contact, which adds $1,440 without taking into account fees and taxes.

I wouldn’t mind, but my data plan is a work expense, not a personal one. For most people, an additional $60 on top of cell phone and home broadband costs is likely cause them to cut back somewhere — or cancel the netbook contract and pay a termination fee. But the primary reason this is a bad idea is because surfing speeds on today’s 3G networks are super slow (I get about 1 Mbps down on a great day and have dealt with speeds as low as 80 kbps down). This will lead to unsatisfying experiences for the average user.

Others argue that folks using data cards for access to the network are likely to come up against their 5 GB-per-month cap, but I’m less sure. The top two U.S. cable firms tell me that their wired¬†broadband customers average about 2 GB per month in downloads, and that’s without a crippled, not-really-broadband connection.

I love my EV-DO card, but it’s not a great web surfing experience, especially during times when the cell network is congested, or for watching video and updating the blog via WordPress. So I am less worried about overage fees and more concerned that those buying netbooks will pay $60 for a connection that’s sometimes worse than dial-up. That’s no way¬†to get people hooked on mobility, and carriers may alienate customers right before they start making big pushes into faster 4G data services.


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