Clearwire-Fueled Freebie Services Threaten AT&T, Verizon

AT&T and Verizon Wireless, working to wring more profit from their next-generation data networks, face a new obstacle: Smaller competitors are offering similar services for free.

FreedomPop, a company funded by Skype founder Niklas Zennstrom, will sell an iPhone case that gives consumers free access to 1 gigabyte of data from Clearwire Corp.’s 4G wireless network. Another Clearwire partner, United Online’s NetZero, is offering 200 megabytes a month for free for as long as 12 months -- so long as users buy a wireless modem, which can take the form of a small USB stick that plugs into the device. The freebie approach lets new carriers hook bargain-hunting customers -- with the aim of getting them to pay for extra bandwidth later -- while helping Clearwire recoup some of the billions of dollars spent building its network. For Verizon and AT&T, the top U.S. wireless carriers, the move threatens the combined $12.2 billion they took in from data last quarter.