Start-up companies offer free data and cheap Wi-Fi with mobile hotspot, but read fine print

CLEVELAND - With all our gadgets, we've become a society that wants data on demand. Sometimes you just can't get it because you don't have a signal or there isn't Wi-Fi.

There are ways to stay connected on the go for cheap.

James Allen likes his tech toys, from his Mac to his iPad. Wherever he goes, he wants coverage.

"You can't count on Wi-Fi," Allen said.

It's becoming widespread, but sometimes it isn't free. Allen bought his own hot spot that fits in the palm of his hand. The device cost $89 and some of his data is free.

"I thought it sounded interesting to get free data. I use the Internet wherever I go. I thought it would be helpful to have a backup rather than just my iPhone," Allen said.

Mobile hotspots are not new, but many require a contract with a cell phone carrier.

Start-up companies like FreedomPop , Internet on the Go , and Karma are trying to change that by offering some free and cheap data that is contract-free.

"I certainly want to support anyone who is trying to break that up because it doesn't feel like there is lots of competition," Allen said.

With Karma, the more you share the more free data you earn. Otherwise, you pay for data as you go. One gigabyte is $14. The device costs $79.

Walmart sells Internet on the Go and charges $10 a month for a gigabyte of data or $10 for 500 MB to use whenever you want. Check the store for pricing on the hot spot.

FreedomPop offers 500 megabytes of data for free. Then you're charged $17.99 a month for 2 gigabytes of data. The device is $89.

"Obviously nobody is going to make money giving away 5 megs of data with an $80 hotspot so they really want you to go over that allowance so they'll be happy to start charging you for that," Kent State information technology manager Christopher Bues said.

Online, some users complain about FreedomPop data overages and billing issues, but Allen said he hasn't had any problems.

A company representative sent us the following statement on that issue:

"In terms of customer feedback, we've been very happy with our customer response since launch.  We have given away well over 2 million MB to users for adding friends to their network, and 99% of FreedomPop's registrations are being driven by organic traffic versus advertising, validating the viral appeal of the service. We allow users to check in on their usage levels and add overage protection, so they can be proactive about managing their usage. Again, it all goes back to what type of Internet user you are - FreedomPop is probably not ideal for extremely heavy users who stream movies daily, etc."

"You really have to be careful and read the fine print with all of them to make certain that you are not going to wind up with huge overage charges," Bues said.

Bues said he thinks we'll all carry mobile hotspots in the future. That's why we're seeing more startups with unique business models.

Read the fine print

Bues said you can really save money if you pay attention to your usage. He thinks the big drawback is coverage.

"Right now, the majority of providers run on Sprint and Sprint's data network generally is the slowest of the four major carriers," Bues said.

Most of the coverage maps show strong signals in the big cities, but it's touch-and-go the further you are away from a city. A few bumps in the road should be expected with any startup.

Before you invest in a mobile hotspot from a new company, check the return policy. Some offer a money-back guarantee that allows you to get a full refund if you are not happy with the product or service.

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