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NetZero reinvents itself as a 4G ISP – and yes, there’s a free plan

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Free StuffIn 1998, NetZero(s untd) became the first ISP to offer free dial-up Internet access; 14 years later it’s doing the same thing except with a different access technology: Mobile broadband. On Monday, NetZero revealed its plans to become a virtual 4G service provider, reselling – or in many cases, giving away – Clearwire’s WiMAX bandwidth.

For the cost of a $50 USB dongle or a $100 mobile hotspot, customers can get 200 MB a month for 1 year with no strings attached. There are no contracts, so at the end of that year customers either sign up for one of NetZero’s paid plans, which start at $9.95  a month, or they simply wave goodbye to the service.

NetZero’s free ad-supported and low-cost plans garnered the company millions of dial-up subscribers in the previous decade and a half, but as residential broadband got cheaper, faster and more readily available, the ISP saw its customers depart, leaving it today focused on two niches: People who can’t afford home broadband and rural customers who don’t have access to it, said Mark Goldston, CEO of United Online, NetZero’s parent company. But with the launch of NetZero4G, the company sees a big opportunity to reclaim its metropolitan roots, by taking a mobile broadband service normally unaffordable to most Americans and selling it on the cheap.

“[Mobile broadband] is a very expensive, elite service today,” Goldston said. “Some people can afford it, but Joe and Jane go to the coffee shop, and they use free public Wi-Fi. … We’re not going after home Internet replacement. We’re not going after  the business user. We’re going after those 100 million public Wi-Fi users.”

Unlike with its old free dial-up plan, NetZero isn’t overlaying a big ad window onto your screen. Instead, the ISP is treating the free 4G plan  as a loss leader. Generally the barriers to entry for 4G are high, requiring the purchase of a device and committing to data plan and contract. By removing all of those barriers except for the device purchase, Goldston said Net Zero hopes to sign customers up to the free plans by the boatload. After that, the utility of the service will be so readily apparent NetZero will be able to convert many of those free customers into paid customers before their gratis year is up, Goldston said. Once they upgrade though, there’s no going back to the free offer.

The paid plans start at $9.95 a month for 500 MB and scale up to $49.95 for 4 GB. Customers who exceed their caps aren’t charged overage fees, but their service stops working. NetZero gives them the option to top off their plans with additional megabyte buckets or upgrade to the next plan tier. Since there are now contracts, though, customers can switch back and forth to different plans each month.

Probably the biggest limitation to the service is Clearwire’s WiMAX coverage. Clearwire stopped expanding its 4G network once it reached its footprint reached 130 million people in 70 cities, and it hasn’t announced any plans to continue its expansion.

As for speeds, Clearwire’s network was once the fastest in the U.S., but new LTE networks and even T-Mobile’s hopped-up HSPA+ service started getting the best of WiMAX last year. Still, I tested a review hotspot NetZero sent me, and it delivered 2-3 Mbps consistently while my wife drove through Chicago’s surface streets. While stationary the connection often spiked to 10 Mbps.

For most NetZero customers, though, speed won’t be the prime motivator – unless they plan to tear through their plan allotments in a matter of hours. In fact, in an interesting twist on the throttling controversy plaguing other mobile operators, NetZero is giving customers the ability to slow down their own broadband speeds to help manage monthly usage. On users’ account pages, there is a throttling bar, which can be scaled down to what NetZero calls “Light Speed,” ensuring that connection speeds never surpass 1 Mbps on the downlink and 384 kbps on the uplink.

Image courtesy of Flickr user frankh.

8 Responses to “NetZero reinvents itself as a 4G ISP – and yes, there’s a free plan”

  1. If it works, I think it’s a great deal. If I’m traveling and just want to check email and look at some web pages, even the paid version is still less than the $10+ a day that most hotels charge. Sign up for the monthly free plan and then upgrade for the months when you’ll be traveling.

    • Ajay Gupta

      In May’2011, I tried Clearwire for my home and had severe connection/speed issues. Hoping that both Clearwire coverage (and the new equipment from Netzero) has somehow improved the situation, I would like to try Netzero 4G service but the cost of trial seems to be $50 (the cheapest hardware I can get, and given the fact that there seems to be 0 trial period). Bummer!

  2. 200Mb is nothing. especially for 4G.

    with the tiny cap why not do something with 3G or even edge/1x since the cap is so small anyways and the coverage would be much better?

    even if it was super slow with a giant ad window something without the cap would be a massive hit. this i do not htink so.

    let’s see what freedompop comes up with.

    • Kevin Fitchard

      Yep, Anon,

      It’s not much. Pretty much enough to check email and do some low-impact Web browsing each month. But hey, it’s free (for a year)

    • Remember, the point of the free service for NetZero is to get customers to buy their priced packages. They need the free service to be premium. If it was lagging out, customers would obviously be less likely to upgrade to the paid service.

  3. anonbbuser

    what stops someone from getting a bunch of these and balancing the traffic between them?

    also can a device that has gone past the 200mb be released and setup on a new account?

    in the dialup days there were people who setup a new account every couple days using the free disks from different providers. will something similar be possible here?

    • Kevin Fitchard

      Hi Anon,

      I did ask that question. Apparently the free trial is tied to the device so once you use up it’s “freeness” it can only be used as a paid device from then on out.

      As for buying multiple devices I suppose you could, but at $50 to $100 a pop it hardly seems worth it, since a $10 plan gives more than double the data, and when would run you about the same cost over a year.