Republic Wireless, a Sprint Nextel (NYSE:S) MVNO, said it will eliminate its cellular fair-use policy and offer truly unlimited cellular service for $19 per month.
The turnabout is notable in light of the fact that Republic had previously characterized its service as unlimited--but with a major caveat. While Wi-Fi connections were not metered, calls, texts and data over Sprint Nextel's (NYSE:S) network were subject to a fair-use policy. Republic, a division Cary, N.C.-based VoIP and bandwidth service provider Bandwidth.com, structured its service to route traffic over Wi-Fi and to only fall back on cellular if no Wi-Fi was available.
Republic had relied on a "Cellular Usage Index" to determine if users were using too much cellular data. The company's CUI had been set at 600 for a month--a combination of voice minutes, texts and data used over cellular, each of which was weighted differently based on the cost of delivery. Brian Dally, Republic's general manager, told FierceWireless earlier this month that each user's CUI was based on how much they use of each component as well as how much is offloaded to Wi-Fi, and that the CUI threshold would change over time as more users sign up for the service. Dally explained that Republic needed to guard against users abusing the cellular network.
However, in a company blog post, Dally said that the feedback Republic has received during its beta has moved it to change its stance. "Some of your feedback about our CUI concept and fair use thresholds ranged from confusion to extreme criticism, with a wide variety of thoughts and suggestions in between," he wrote. "Some judged our marketing to be 'deceptive.' Others felt our concepts were just too complicated, and unnecessary to expose to end users. There has been much debate about how to quantify an apparent cap... and whether it was accurate to characterize our policy as one. Many sought further clarification from us about details, corrections, tools and further illustrations."
As a consequence, Dally wrote that Republic will switch to offering truly unlimited service. "Rather than revising our fair use policy, we've decided not to have one at all. There will simply be no thresholds, and no risk of losing service," he wrote. "We're doing away with all of that to keep all of the focus instead on where it really belongs: Creating a new wireless future together. A future that is simple to understand, unfettered to use, and an amazing value for all. That's what we started down this path to do. That's where the power of this vibrant community, dynamic Wi-Fi ecosystem and revolutionary technology should be invested. We're all-in."
For now, the CUI, which users can monitor online, will remain in place. However, Dally wrote that the company's fair-use policy will be removed and its terms of service will be updated. In the blog post, Dally did not say when the company's beta would end.
"As part of that legal amendment, everyone who has purchased or purchases a phone during beta will be guaranteed the opportunity to enjoy unlimited service, without fear of cancellation, until the end of beta," he wrote. "We won't end beta until we either achieve economic sustainability or become convinced that doing so is impossible. In the event that we end beta with a decision to abandon or change our unlimited offering, we'll give you the option of canceling for a full refund for your device at that time."
Currently, customers pay $199 up front for their first month of service and for the specialized phone that comes with the service. The handset is an LG Optimus smartphone running version 2.3, or Gingerbread, of Google's (NASDAQ:GOOG) Android platform (Dally told FierceWireless more phone options will be coming, but declined to say what those might be or when they will be available). If customers want to continue with the no-contract service, they can pay $19 a month plus taxes after that, but can cancel the service at any time without an early termination fee.
- see this Republic blog post
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