Blame the carriers for your new iPad LTE overage charges, they deserve it

| Wednesday, March 21st, 2012

It was only a matter of time until people who don’t fully understand how their data plans work started to complain about blowing past their data caps while playing with their new LTE iPad. The Wall Street Journal has tracked down a couple of people who managed to eat up their data plans by watching two hours of March Madness over the LTE network, and another guy who watched over four hours of YouTube videos while on the LTE network because the local Wi-Fi was too slow. In both cases the guys ate up their entire monthly allotment of bandwidth in a couple of hours.

If you want to read their full stories, you should check out the WSJ‘s article.

The stories have got me thinking, once again, about the cost of wireless bandwidth. With LTE set to be the next major standard, it’s not a stretch to wonder if the carriers have set a bit of a speed trap for users, offering ridiculously low data plans for premium prices. For instance, AT&T offers 250 MB, 3GB, and 5GB plans, while Verizon wireless offers 1GB, 2GB, 5 GB, and 10 GB plans. The prices range from $14.99 on the AT&T network for 250 MB, all the way up to $80.00 for 10 GB on the Verizon network. When you compare those prices to the $19.95 to $49.95 it costs for wired Internet from both companies, and the bandwidth consumers receive in those packages, it’s not exactly difficult to understand why there’s a severe disconnect between company and consumer.

It’s obvious that carriers have us up against the wall, and for most, it is difficult to understand that streaming a sporting event on your phone does not directly equate to the cost of streaming it on a computer. I can watch a Netflix video in HD almost every night of the week for an entire month, and still only pay $39.95 for my Internet connection. Let’s pretend I do the same thing on my phone in the month of March (31 Days). Netflix estimates that it takes about 2 GB of data for someone to consumer a feature length HD video. That works out to 62 GB of data for an entire month of films.

If I were to do that over my phone, I would need a 5 GB plan on the AT&T network, and that would cost me $50.00. We still need to cover 57 GB of data. Hello overage charges. According to the Washington Post, overage charges range from $10 – $15 per gigabyte depending on your plan. That means we would be looking at a whopping bill of $50.00 for my plan, and another $570.00 in overeage charges for a total of $620.00 to watch a movie every single day for an entire month. That same luxury on my home computer would cost me around $39.95 – $69.95, depending on my ISP of choice. Clearly the cost to ship a byte is not equal over the wireless and wired networks according to carriers’ crooked math.

These numbers, while an exaggeration (who’s gonna watch a movie every single day), still illustrate the point that consumers are paying a premium for something they’ve been conditioned to view as dirt cheap. Through the late nineties these major ISPs heavily encouraged users to pay for “unlimited” Internet bundles, and now, almost two decades later they’re trying to get us all back on dial-up, despite years of encouragement from their customer service representatives to purchase unlimited bundles. Who can blame Albert Park, the YouTube guy from the Wall Street Journal article, for thinking he could stream some YouTube videos while sipping on a coffee at his local café. He’s been able to do it for two decades.

With the world going mobile more and more every year, it’s hard not to worry that innovation has been kicked in the junk because wireless carriers are driving the gravy train to the nearest bank. It’s not unrealistic to think that had these overage charges and terrible Internet plans been in place when the Internet went commercial back in the 90s that the web we’ve grown to love wouldn’t even be around. These wireless Internet rates are killing our mobile future and economy before we even have a chance to understand what our future holds. It’s disgusting.

 

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