About 10 days ago, Karma announced that it would be cutting the speeds of its Neverstop data plan in response to a small number of users that were racking up hundreds of gigabytes of usage per month. Today, the company is announcing a retooling of the Neverstop plan, which will restore its speeds to their previous levels, but keep usage in check with throttling after a certain limit has been reached.
Neverstop was launched last year as Karma's first subscription data plan, and it offered unlimited data usage for $50 per month. Speeds were set at 5Mbps for both up and downlink, and customers could only use three devices at any given time on the plan (compared to the eight devices that Karma's pay-as-you-go plan allows). It didn't take long for some customers to adapt the Karma Go hotspot device for home usage, including for large data backups and online gaming, and subsequently rack up unexpectedly high data usage. Karma says it never intended Neverstop to be a replacement for home internet service (though a survey sent out to its users showed that nearly 60 percent of them were using it for just that) and its initial response was to throttle the speeds of its Neverstop plan down to as low as 1.5Mbps in order to discourage the excessive usage.
Karma will refund $1 for each unused gigabyte of data
Today's new Neverstop plan brings the speed of the service back up to 5Mbps for all users. However, the company is instilling a data cap on the service, so when 15GB of usage in a month is exceeded, the service will be slowed down considerably. CEO Steven Van Wel likens the throttled experience to "Gogo in-flight internet" and said it will not allow for such things as video streaming, but will be good enough for checking email and sending messages. Van Wel says the 15GB limit was chosen because most Neverstop customers never use that much in a single month. Karma is resetting each Neverstop customer's usage counter to zero today, so prior usage won't count toward the new cap. The three simultaneous device limit remains in place.
In addition to the new 15GB limit, Karma is also introducing a refund program similar in concept to what Google does with Project Fi. With the new Neverstop program, customers that don't use 15GB in a month will get a $1 credit back for each unused gigabyte. The $1 credit for sharing your Karma connection with another user is also still available.
In a blog post detailing the changes, Van Wel says that the company "made a mistake" when it initially launched Neverstop and it didn't account for usage of "over 1,000GB a month" by some customers. "Usage this high is not something that will work today," says Van Wel, and "if you're looking to binge watch Netflix 24/7, this probably isn't the product for you." Karma is offering refunds to customers that do not wish to continue their Neverstop service, including for the Karma Go hotspot device itself. Another option will let Neverstop customers switch over to the Refuel pay-as-you-go plan when they hit the 15GB limit.
"If you're looking to binge watch Netflix ... this probably isn't the product for you."
Over the course of multiple interviews in the past few months, Van Wel has repeatedly said to me that Karma's goal is to eventually become something that can replace a home internet service. But he also says that it will take a few years before costs are low enough, the wireless networks are strong enough, and the business models are in place that will enable such a thing. For now, the new Neverstop plan represents a compromise in both speed and usage, making it good for mobile uses, but not something you should really rely on for your only home internet connection.