Verizon Says Data Caps Are for Your Own Good

Source: Thinkstock

Source: Thinkstock

If like many cell phone users, your plan includes a data cap, Verizon says you should stop complaining. At least, that’s what industry analyst Jack Gold argues in an article posted by Verizon. The post quickly garnered criticism for holes in Gold’s argument and Verizon’s obviously self-serving publication of the article, which includes a laughable disclaimer: “The thoughts, opinions and suggestions of the author may not necessarily reflect those of Verizon Wireless.”

Sure, but Verizon didn’t publish and promote a post on why companies should strive to give customers unlimited data, it published one that was staunchly in defense of data caps.

You would cause wireless congestion

Gold writes, “Let’s face it, if everyone had unlimited data and used it fully, the performance of the networks would suffer because of bandwidth restrictions and the ‘shared resource’ nature of wireless.” But according to an analysis by Ars Technica, data caps are much more about profits than they are about controlling wireless congestion.

It isn’t that monthly data limits don’t help at all, but it’s not the best method. Capping data is relatively ineffective at reducing congestion because users’ limits are in place all the time, not just in locations with excessive wireless traffic or at peak usage times.

You should fear price increases

Gold also warns that users would face higher bills if unlimited data plans were in place, a necessity to pay for the improved infrastructure. But Verizon, which holds about a third of cell customers, is profitable enough to make the investment without passing along huge costs to consumers. Brad Reed of BGR points out that if customers truly ought to be afraid of phone providers making big investments, they would have begged carriers to reconsider 4G and LTE.

You don’t need more data

“In most cases,” Gold writes, “users are very well served by current wireless data plans, and really don’t require more.” A recent Pew report says otherwise. Approximately half of all mobile consumers frequently exceed their data caps, and 30% go over their limits routinely. Data overage charges for most carriers are priced at about $15 per gigabyte used beyond the user’s plan.

These charges aren’t for anyone’s good but the provider’s. If congestion was the only concern, companies would slow speeds when customers reached their limits instead of collecting fees. John Legere, CEO of T-Mobile, says charging customers overage fees is “despicable,” citing that AT&T, Verizon, and Sprint together have collected about $1.5 billion from their customers in overage fees in the past year.

How would you like a good throttling?

Cell phone providers might insist that data caps reduce the need for throttling, or slowing customers’ wireless speeds, but most customers would prefer reduced speeds to a higher bill. Besides, throttling isn’t used in the practical manner carriers would have users believe.

According to an article in TechDirt, Verizon and AT&T purposely throttle their unlimited data users (the ones who are in grandfathered plans) and even restrict access to certain apps, presumably to persuade them to abandon their current plans. All four major carriers admit they have the ability to selectively throttle users in times and places of congestion. But providers don’t use throttling to prevent network overload, according to Ars Technica’s analysis. Instead, carriers have throttling policies in place to target users they want to push onto pricier plans.

What’s a customer to do?

While no cell phone carrier appears totally innocent, customers can stand to benefit from the fierce competition between the few providers available. Every carrier changes its offerings frequently, attempting to stay one step ahead of rivals. In some respects, T-Mobile and Sprint appear to have an advantage over the two largest carriers.

Sprint still offers unlimited data options and has acknowledged that congestion management and monthly data limits are two separate issues. T-Mobile boasts its unlimited data plans, but throttles users after they hit monthly limits on high-speed data. According to Adam Levy’s article in The Motley Fool, the biggest benefit of smaller carriers like T-Mobile and Sprint is they are less limited in terms of bandwidth. While their networks are smaller than those of Verizon and AT&T, their customers face much less wireless congestion in large cities.

Verizon’s thinly veiled intimidation move aside, the options aren’t great no matter what kind of plan you want. Although with Google’s plans to get in on the cell service game, customers can hope it will bring innovation and efficiency to a fee-hungry and largely disappointing industry. Adding to Google’s power is a frightening thought, but at the very least, the search giant’s involvement could drive down prices and push providers to invest in faster wireless.

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