A new start-up is chucking the conventional approach to data plans in favor of plans that require users to share access to their Wi-Fi hotspots.
Customers with Karma's hotspots, running on Clearwire's WiMAX network, pay $14 per gigabyte, as first reported by The Verge.
The hotspots offer open Wi-Fi access, and when a new user logs on to the connection, they get 100 MB of free browsing. That may not sound like such a great deal for the Karma subscribers shelling out cash for their mobile broadband connection, but there's this: The hotspot owner gets 100 MB of free data for every outside user that signs on to the open Wi-Fi connection.
The idea is to create a cycle that allows hotspot owners to give free access to their connection without incurring additional data charges.
Karma's rates are significantly cheaper than those offered by Verizon Wireless and AT&T. Under Verizon's new shared data plans, users pay $50 for 1 GB of data. AT&T charges $20 per month for 300 MB of data and up to $50 for 5 GB of data.
"It's not difficult to understand why we stopped liking [our wireless providers]," Karma said in a post on its blog last month. "Like all vampires, they suck."
Karma is based in Amsterdam and graduated from the New York-based TechStars start-up incubator program in March. It's still in its early stages – it expects to have just 500 hotspots running in its New York City test market by the end of the year, The Verge reported.
There are some signs the fledgling company is still working on flying straight: It issued an apology yesterday for mentioning airline partners it was not authorized to name.
"The irony of our name being Karma is not lost on us – but we truly hope to live up to our name and the core value it represents, and we hope you give us the chance," co-founder Robert Gaal said.