Saturday, March 02, 2013

Ready to POP

I've become a walking hotspot ...

Let's face it, we all hate to pay for stuff, especially when it feels like we're being overcharged. This happens especially in markets where pricing has not settled down yet, such as mobile data access plans. Rates on these things are nuts, obviously dictated by what some marketing department thinks the customer will bear rather than on the intrinsic value of the service.

Consider: I pay AT&T $20 a month for 300MB of data, and I usually use pretty close to that because I'm careful to do all my heavy downloading when I'm on WiFi. That works out to less than 7 cents per meg. But if I run a wee bit over I have to pay another $20 for another chunk of data I might not need. Effectively the price per meg could almost double. Make sense?

How about this: For an extra $10 a month I could get 3 gigabytes of data, or ten times the amount I get now. The price per meg then would be only 1 cent, or 1/7 what I pay for the smaller amount. This is intended to make the $30 plan hard to refuse, but sheesh, couldn't there be something in between? Or couldn't that low end be a bit more generous?

On top of this there is an arbitrary restriction on my service that prevents me from sharing my cellular data with another device through tethering (where the cell phone becomes a mobile hotspot). Now, if they're charging me by how much I consume, and if I'm already using as much as I'm paying for, why should they care if I divided my usage between two or more devices? Obviously, it's just a way to force me to buy a separate data plan for each device, or to upgrade my service.

How much more? Turns out it is a minimum of $40 for a 1 gig shared data plan, PLUS an extra $55 for each additional device. So instead of $20 or $30 per month I'd be paying $95 just for the ability to share access with my tablet. That's 9.5 cents per megabyte, or 35% more than my current plan, and 850% more than an individual 3 gig plan. Any rhyme or reason there?

Alternatively I could buy a separate data plan just for my tablet (assuming it had 4G built in, which it doesn't) for $50 per month for 5 gigs, or a penny per megabyte. But that would be in addition to the data plan for my phone, so I'd still be paying a total of $70 a month. And it might be way more data than I would need or use. Any wonder why it makes me crazy? Any wonder why people jailbreak their phones and install software that bypasses the restrictions? (Not me, of course.)

But hey, this is Capitalism, and market forces are beginning to work. When I heard about FreedomPOP's plan to give out 500 megs per month of free 4G mobile data I jumped all over it. All you do is send them a "refundable deposit" for one of their access devices and agree to pay reasonable overage charges of 1 or 2 cents per megabyte. If you want more you can buy it for amounts that make sense rather than nonsense, and use it with any number of other devices. Now we're talking!

I paid about $100 for a tiny (2.5in/6.5cm square) mobile access point that you can slip in a pocket and which will support up to 8 WiFi connections. I wouldn't expect very good performance with a maximum load, but it works just fine for my phone and tablet. If I use it for a year with no overages I will have paid about $8 per month for my 500 megs, or about 1.7 cents per meg. If I use it for three years the price will fall to less than half a cent per meg, or less than 10 cents per day. At prices like that I will gladly pay overages if only to encourage them to keep up the good work!

Got data leftover? FreedomPOP even lets you share it with friends who have their own FreedomPOP accounts. An inspired piece of viral marketing, but generous nonetheless. Try giving away your unused megabytes on [insert vendor of your choice].

The only drawback to the service is the spotty coverage map in my area, because FreedomPOP uses the Clearwire cellular network, but in the corridor between my home and office I'm gold. Clearwire has now been bought up by Sprint Nextel, so assuming they don't decide to drop FreedomPOP altogether, the coverage is likely to improve.

My only other concern is that the access point is so small it would be easy to lose. I misplaced it once already, forgetting that I had plugged it into my USB port to charge. But on the road it's easy to tuck away into a pocket of my computer bag where it's pretty secure. Now I just have to remember to turn it off when I'm not using it to preserve the battery. I did a dry run the first week, leaving it on during my commute to and from work even if I wasn't using it, and the charge lasted nearly 5 days.

Time will tell if this new "freemium" price model will hold up or will be imitated. It seems to be doing all right for services like Dropbox. And with both Google and the government talking about free super-WiFi over the whole country, I think it's safe to say that eventually the current draconian price structures of the phone companies will go the way of Compuserve dialup rates.

Remember those? It cost $6 per hour for a 300 baud connection, at which speed you could read text as fast as it downloaded across the screen. For $12 an hour you could upgrade to 1200 baud -- 4x the data for 2x the price. Now we get 3MB download speeds for as little as a dollar a day. And what ever happened to Compuserve anyway?

[Yet another price model is offered by Karma using similar hardware. They offer flat pricing per megabyte with no contract and no monthly allotment. Just pay as you go for what you use. The advantage there is that you never leave unused data on the table -- it just rolls over. A good fit if you need lots of time one month and little the next.]
[In the short time since this was posted, FreedomPOP has added a new level of service, possibly in response to the Karma plan. For 3.49 per month you can now get data rollover, accumulating up to 20 gigs from months where you use less than your allotment and using it when you need it. Obviously prices are still in a state of flux.]