Saturday, August 13, 2011

Public Knowledge: "data caps actively discourage the types of activities that 4G enables"

A new report from Public Knowledge,(a "public interest group working to defend citizens' rights in the emerging digital culture") finds that "consumers will find their experiences with the faster services severely hampered by the rationing techniques the carriers impose on customers who use lots data — such as watching video".

See "Public Knowledge Issues Consumer Warning on "4G" Wireless Service" (press release, here) and the report - here and video below.

Unfortunately, the paper does not suggest a better business model for 4G services, that will allow the MNOs to continue with the huge investment needed in order to bring LTE services to all. Other models are available - some of which will be described in my Monday's Guest post by Mike Manzo (intro - here).

"These data caps actively discourage the types of activities that 4G enables. Activities that are made possible by 4G, such as watching movies or uploading video to the internet, are made impossible by the data caps. As a result most users will avoid taking advantage of these new services out of fear of incurring large overage fees. That makes capped 4G little more than a bait and switch, like being sold a handful of magic beans"

The side chart shows two different caps – one at 2 GB and one at 1.5 GB. The 2 GB cap reflects the entirety of the cap offered by AT&T and Verizon. The 1.5GB cap can be thought of as a rough approximation of the “4G surplus.”

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