Karma's 'social bandwidth' model has led to users sharing 1,000 GB of WiMAX data

Karma, a startup that launched in December around the idea of "social bandwidth," or allowing users to share WiMAX data with each other, said it has achieved success with its model. Karma co-founder and CEO Robert Gaal told GigaOM that about 5,000 non-Karma users each month connect to the Karma network, and those users have consumed about 1,000 GBs of WiMAX data on Clearwire's (NASDAQ:CLWR) network during the past six months. Meanwhile, Karma's hotspot customers typically share their connection five times per month, earning 500 MB of data per user. Karma counts "tens of thousands" of paying customers.

Karma offers a $79 mobile hotspot device and 1 GB of free WiMAX bandwidth to get users started on its service. After that first data allowance is used up, Karma allows its customers to buy data as they go, charging $14 per GB. Customers must log in and create an account via Facebook (NASDAQ:FB). The company argues that its approach encourages customers to share bandwidth with the public via the hotspot's Wi-Fi signal. Public users who connect via a Karma customer's hotspot must log in to get a connection, at which time they use their own bandwidth (either paid for or that first free gigabyte). The customer whose hotspot is used for the login gets rewarded with 100 MB of free usage. Article