Wireless Routers, Lemons,
and Bad Opinions
by
Ross M. Miller
Miller Risk Advisors
www.millerrisk.com
October 9, 2006
I got on the wireless Internet bandwagon early and
suffered the slings and arrows of early adoption. I got my wireless
network working with minimally adequate throughput and still have a
nearly full head of hair. My first router was one of those big blue,
ugly Linksys models—strictly 802.11b (the slow version) because they
were still getting the kinks out of 802.11a and 802.11g was still on the
drawing board. My wireless PCMCIA card was the top-of-the-line gold card
from Orinoco (sail
away, wireless network, sail away). The recent parade of laptop
computers with built-in 802.11g wireless capability into my home led me
to conclude that it was time for a new wireless router.
On and off over the past six months I had perused the
various wireless router reviews. Such devices are complicated to begin
with and are made all the more complicated by the slow dribbling out of
preliminary versions of the new 802.11n standard. Furthermore, all the
reviews are contradictory. One guy can get a solid signal through three
solid brick walls while another has trouble going through a single
wooden floor. Your mileage may vary, indeed.
I recently found myself in the Cambridge,
Massachusetts Micro Center store (whenever I am within twenty miles of
it, I find its gravitational pull irresistible) and was gazing at the
merchandise. (Salespeople who approach me asking what I am looking for
come to regret doing so. On any given day, I could end up buying
virtually anything in the store, or nothing at all. Only rarely am I in
a computer store looking to buy a specific item.) I was staring at the
Netgear RangeMax routers, the relatively pricey Godzilla of wireless
routers, when beneath them I saw a row of plain brown cardboard boxes
that contained refurbished Netgear
WGT624, the GEICO gecko of wireless routers.
The WGT624 is a small, cute thing with a single
external antenna. On looks alone it beats not only my old Linksys
router, but all of its equally ugly updated versions, hands down. I
commandeered one of Micro Center's computers with an active Internet
connection and did some quick follow-up research. (The salesman to whom
this machine belonged kicked me off it when he realized what I was
doing.) This router not only does 802.11g, but the double-speed
"Super" version of that protocol, not that any of my machines
speak that language.
The router was a mere $39.99 and I figured that I
could always do something with it, so I bought it, took it home, and it
has been working for almost a month without a problem. In combination
with the various laptop computers it is great, in combination with the
classic Orinoco card, it handily beats the flaky connection that I got
with the old Linksys.
The Netgear WGT624 is a fascinating item. The reviews
of it on Amazon.com and newegg.com are clustered at the two extremes—people either hate it or love it. Those who hate it fall into
two camps. In the first camp are users who appear unable to get it
working satisfactorily in the first place. In the second camp are users
for whom it worked initially and then entered into a variety of failure
modes, many of which are related to the router's alleged overheating.
(The updated version of the router that I got supposedly has extra air
holes to keep it cool.)
Those who love the WGT624 also fall into two camps. In
the first camp are users who got lucky, plugged it in, and it just
worked and has been working ever since. In the second camp are IT
professionals who actively hunt this router out and buy vast quantities
of refurbished or otherwise discounted units to install at their
company's or client's sites. The WGT624 has a reasonable firewall built
into it and several other "neat" features that give it some
tech appeal. Its main negative is that it is not as "hackable"
as the equivalent router from Linksys, which is a direct descendant of
my old blue monstrosity.
Now, a new WGT624 lists for $79.99, but is generally
available from discount retailers for $59.99. So, unless one catches the
occasional "fire sale" for the refurbished model, one only
saves $20 relative to a virginal one. (Netgear rebates are attached to
the retailers, not the units, so at a retailer who offers the rebate
deal, the new router goes for $49.99 and the refurbished one for
$29.99.) Despite the profusion of MIT types throughout the store (and
me, the barely distinguishable hybrid Caltech/Harvard type), Micro
Center is reasonably classy place that does not carry much in the way of
refurbished goods. So, what makes the Netgear WGT624 so special?
This is where lemons come in. In general, refurbished
items are goods that have either been returned by the initial buyer
during the store's return period or have been sent in for repair. For a
typical product, this makes them "damaged goods." In the case
of automobiles, new cars that show up on the used market too soon after
they are purchased are marked as "lemons." In some cases, the
value of a car can drop 30% the moment that its first buyer drives it
off the lot. The major exceptions are specialty cars that are in scarce
supply. They are frequently bought to be "flipped." Also, some
cars have such stellar reputations that true lemons are rare.
The WGT624 router fits into neither of these two
categories. They are massively plentiful—if you find one in a store you
are likely to find another one hundred just like it in a big pile—and
they reputation is anything but stellar. What the WGT624 has going for
it, and the reason that such a large market for the refurbished units
exists is legion of buyers who cannot get it to work out of the box,
return it in disgust, and write scathingly negative reviews of it. In
defense of these buyers, I must say in fairness that any novice user
will need a fair bit of good luck to get this router to work at anything
like its full potential. I have not called Netgear for support, nor
would I ever think of doing so, but the reports from those who have are
disheartening to say the least. Hence, it is more likely that the
original purchaser of the WGT624 and not the unit itself was the lemon.
In one of my more notable prior incarnations as an
experimental economist, I not only studied the lemons phenomenon on live
human subjects, but I was the first person on this planet to conduct
such an experiment. (My distinguished collaborators on the project were
my mentor and frequent dining buddy, Charles Plott, along with Federal
Trade Commission economists Michael Lynch and Russell Porter.) We were
able to generate the lemons phenomenon in the laboratory without a lot
of difficulty and then we explored "institutions" that could
keep lemons from souring the market. What we discovered was that any
mechanism that allowed buyers to communicate with each other about their
experiences was enough to put anyone who sold a lemon out of business.
(Sellers could distinguish a good product from a lemon, so that sellers
of lemons were effectively perpetrating what is technically known among
theoretical economists as a "rip-off.") Because "big
brother" (in the form of me, Charlie, and the FTC) was there,
buyers were forced to tell the truth about their purchasing experience.)
Perhaps, in some small way, the results of this
research has helped stay the regulatory hand of the FTC, especially now
that the Internet allows information about products to be made available
around the world instantaneously, so that sellers of lemons are punished
almost as quickly as they were in the laboratory. One thing that we as
experimenters had underestimated was just how easily
reputation-reporting systems could be corrupted.
Consider Amazon. Not only do sellers of products have
shills, often on their payrolls, there to sing the praises of an
unworthy item, they also bash their competitors' products. Product
bashing is most obvious when the bad reviews come early in a product's
life and are then followed by a stream of positive reviews and no
further negative ones. For computer items, the most suspicious reviews
are those that claim that installing the product's software munches
one's computer, either requiring that the operating systems be
reinstalled or, in extreme cases, "bricking" it. Paid or
unpaid product assassins can be clever; they know that a one-star rating
is more likely to be bounced by the system, and so they always assign at
least two stars to their hatchet jobs. On heavily censored sites (compusa.com
springs to mind), scathingly negative five-star ratings can manage to
slip by the censors.
As for the Netgear WGT624, the negative reviews
relating to sudden death by overheating are so abundant that one has to
believe that there was something to them. I hope that the added air
holes do the trick. If not, the vertical mounting stands make it into a
neat piece of modern sculpture—and a real bargain at twice the price.
Copyright 2006 by Miller Risk Advisors. Permission
granted to forward by electronic means and to excerpt or broadcast 250
words or less provided a citation is made to www.millerrisk.com.