Will FreedomPop Disrupt US Broadband with Free internet?

FreedomPop, which calls itself "America's new free Internet company,” announced the release of its Burst wired/wireless router, a device that's aimed at the home or small office, and which offers "100% free high-speed Internet."

After buying the router for $89, customers are entitled to 1GB of free data each month. They can earn unlimited data by "adding friends to their network via email and social media networks, and engaging in partner promotions," perhaps printing a store coupon out to add 500MB. The router offers speeds of 10 mbps upload, which is faster than typical DSL services, and a little slower than the service that cable companies typically offer. FreedomPop's CEO Stephen Stokols explained that the new service was born, in part, from frustrations with the U.S. model for broadband, which compares badly to other countries. "I know firsthand how Ofcom [the national telecoms regulator] in UK has increased competition in the UK and how that results in lower prices," Stokols said. "I also have been shocked by how the US carriers do not have that same pressure. As such, margins are 65% higher in the U.S. than the UK, 80% higher than France." Instead, Stokols suggests, the U.S. is an "oligopoly with essentially 2 option in any one market - Cable vs DSL. Any American who wants high speed internet has to pay around $50/month for unlimited downloads." That's okay for high traffic consumer, but Stokols pointed out that almost 70% of Americans consume under 10GB per month.