Deceptive Practices: America Is Paying ‘Hyper-Overcharged’ Prices for Wireless: There Are No ‘Truly Unlimited’ Plans.

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AT&T, Verizon and the other wireless carriers, with the help of the FCC, have not only figured out how to keep prices for wireless services ‘hyper-overcharged’ as compared to most of the rest of the world, but it uses deceptive advertising, nomenclature, and the distortion of words to claim that they are offering “unlimited” services.

Rewheel, a telecom research and consulting firm, corroborates that America does not have unlimited wireless service and the term, as used, is confusing and misleading.

They write:

“We were misled by Verizon’s confusing wording that appear to suggest that users of these two plans (Play More Unlimited and Get More Unlimited) could consume unlimited gigabytes in 5G mode. We incorrectly assumed that Verizon’s throttling and de-prioritization monthly gigabyte limits (e.g. 50 gigabytes per month) only applied to 4G, not to 5G.”

“The United States continued to be one of the very few countries where consumers could not buy smartphone or mobile broadband plans with ‘truly’ unlimited data volume (i.e. 1000 gigabytes, higher or infinite gigabytes).”

Hyper-overcharging is one reason there is now a Digital Divide in America as this kind of anti-customer practice has inflated rates to the point that America now has a wider and Real Digital Divide — basic broadband services are now expensive and a large swath of the population can’t afford high-speed broadband. In this era of the pandemic, this means that millions of children have problems going online from home. And with the current push to have wireless as a substitute for wired high-speed broadband, the fact that Americans can pay hundreds of dollars more than many countries overseas needs to be investigated.

This is a social injustice. Low income families and rural areas are, of course, hit the hardest by this financial hyper-overcharging. The lower the income, the more dramatic the impact is on the ability to pay these inflated rates. And worse, it is clear that the services being supplied to America’s rural areas are, even by US standards, slow and expensive.

In a previous analysis, we discussed how Verizon, AT&T and the other carriers have used this term “unlimited” to supply a limited amount of service but charge through the nose. And just to make sure we understand what the word “unlimited” means, according to the Oxford Dictionary — ‘limitless’, ‘boundless’, and even ‘not limited’ are words that should come to mind.

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Rewheel’s new report is the 14th in the series and it supplies an in-depth, extensive analysis covering smartphones, mobile and wireless broadband plans with unlimited data for the 2nd Quarter 2020; it independently corroborates that America’s “unlimited” plans are deceptive. While other countries, including the members of the European Union, are paying a fraction of what we pay in America for wireless 4G and 5G broadband service plans, America gets a fraction of the data — 19 times less data on our fake unlimited plans.

Download the Rewheel public summary version (Subscription required for the full report.)

“PLANS WITH UNLIMITED DATA VOLUME IN THE UNITED STATES

“In DFmonitor’s 13th release 1H2020 we incorrectly designated Verizon’s 5G smartphone plans Play More Unlimited and Get More Unlimited as plans that met the DFMonitor’s unlimited data volume criteria.

“After a thorough examination we concluded that indeed Verizon’s throttling and de-prioritization 50 gigabyte limit applies to all of its plans both in 4G and 5G mode. See details below.”

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These are the Verizon Unlimited Plans, As of October 13th, 2020, Do More Unlimited and Get More Unlimited top off at 50 GB. How, exactly is a 50 GB limit “unlimited”? These also have 15–30 GB of WiFi hot spot use, but, the fine print says this is NOT additional usage but is part of the overall allowance, a fact that is not spelled on in big print on their web page.

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The fine print of the plan also states that after 50 GB, the service can slow down. Now, this is really ugly because the ‘5G speeds’ are supposed to be “25 times faster than 4G” — and yet, the speed gets slowed to 600 Kbps (less than 1 Mbps, which can’t do video). Worse, it can be limited to 2G speed and use less than 512 MB a day. (About ½ of 1 GB).

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NOTE: These packages come with other services and promotions for Disney or Apple Music. Verizon gives Disney+ for 6 months for free, then $6.99/mo + taxes after; Apple Music is also for 6 months, then $9.99/mo + taxes after — i.e., these prices are almost the same prices if a customer just purchases these items directly, as both come with a free promotional offer.

And notice that these services are not even available widely but only in “parts of select cities”.

Rewheel writes (to repeat):

“United States continued to be one of the very few countries (only 6 out of the 48 countries in 2H2020) where consumers could not buy smartphone or mobile broadband plans with ‘truly’ unlimited data volume (i.e. 1000 gigabytes, higher or infinite gigabytes).”

Outrageous Wireless Price of Service in America

The report covers 3 flavors of wireless: smartphone, mobile and wireless broadband plans. The opening chart shows that 21 countries have ‘truly unlimited’ for 30 Euros or less; With a current exchange rate of 1 Euro =$1.18 US Dollars, that’s about $35 bucks.

The report states that as of 2nd Quarter, 2020:

  • “Median monthly price of 5G mobile broadband plans is 30.90 EUR.
  • “Median monthly price of 4G mobile broadband plans is 15.00 EUR.
  • “Median monthly price of 5G mobile broadband plans with unlimited data volume in the EU (European Union) is 35.90 EUR.
  • “Median monthly price of 4G mobile broadband plans with unlimited data volume in the EU is 23.00 EUR.”

Yes, that is 23 EURO for unlimited 4G and 35.90 for unlimited 5G– with over 1000 GB or more — that’s about $27 dollars for 4G unlimited and $42 dollars for 5G unlimited.

Note: The 1000 GB is not the top limit; it is just a placeholder as the customer can use more as it is ‘Truly Unlimited’.

The Price Per GB Should Offend America.

The conversion to dollars: .05 EURO= rounded to 6 cents; .07 EURO is $8.3 cents.

For 2nd Quarter, 2020:

  • Median gigabyte price of 4G wireless broadband plans in EU is 0.05 EUR.
  • Median gigabyte price of 5G wireless broadband plans in EU is 0.07 EUR.

Hyper-Overcharging 101

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Based on an average of Verizon’s advertised price and the fine print caveats and comparing this ‘average’ with the Rewheel EU prices:

  • Verizon’s average price per GB is 2,256% more than the EU average price.
  • Verizon’s average price per GB for these plans are $1.65 per GB vs $.07 cents.
  • Verizon’s monthly overcharge of the plan fees are $51.58 a month, coming to $619.00 a year
  • The average EU pricing, including ‘truly’ unlimited was $32.92 vs Verizon’s $82.50 (and this does not include the various taxes, made up fees and surcharges added to the Verizon bills).
  • The ‘truly limited’ plans supply over 1000GB per month;
  • Verizon’s fake unlimited is 50 GB.
  • If you wanted 1000GB (which is not even available), you would be paying $1700.00 a month.

Low Volume Users Really Get Truly Hosed.

It gets a lot worse when we examine the low volume customer. In the previous article we pointed to Verizon’s other services:

  • $35.00 ‘prepaid’ service with 5 GB, comes to $7.00 per GB.
  • $55.00 ‘metered’, non-unlimited service with 5 GB is $11.00 a GB.
  • ‘Data Boost’ to add 1 GB is $15.00
  • Low Volume Per GB $9.00, not counting taxes, fees and surcharges.

Extensive Research: These are averages and the focus is on Verizon. We note that Rewheel’s research is extensive:

“This 14th release 2H2020 contains 1712 smartphone tariffs, 663 mobile broadband tariffs and 208 wireless broadband tariffs. Those were sold by 168 mobile network operators (that are part of 92 operator groups), 79 operator sub-brands and 70 major MVNOs that were present in the 48 European, American, Asia Pacific and African countries. The entire DFMonitor database includes well over 20,000 4G&5G tariffs”.

The Verizon offerings and others can’t support America’s needs during this pandemic and has expanded the Digital Divide.

OpenVault has been collecting broadband data during the Covid-19 experience and has some new information about broadband usage. Though not surprising, with everyone home and in lockdown 1st Quarter, 2020, the broadband personal usage went up almost 50%; the average subscriber account used 402.5 GB, as compared to 273.5 the year before.

“Findings: OpenVault Broadband Industry Report (OVBI) Q1 Quarterly Advisory: Report

“The COVID-19 pandemic changed broadband usage patterns in substantial ways, perhaps permanently.

Average consumption at the end of first quarter, 2020 (1Q20) jumped to 402.5 GB, an increase of 47% over the 1Q19 average of 273.5 GB and a 17% rise over the 344.0 GB in 4Q19.

Conclusion: We know what happened and it is time for investigations.

Which brings us to the fundamental issue — How did Verizon and the other wireless carriers get away with this hyper-overcharging? Why hasn’t the FCC or other regulatory agencies, or even Congress investigated the dynamics that allowed this to happen and fix it?

We know what happened — Verizon, with AT&T and the FCC, were able to manipulate the fundamentals to keep prices to competitors inflated and to not have serious competition. They have regulatory captured the FCC and regulators, so that they never investigate or examine the financials. These few companies were able to also capture the FCC’s Consumer Advisory Committee and other Committees by filling them with groups that they fund, or even take over state legislatures with “model legislation”, written by the corporations through groups like the American Legislative Exchange Council, ALEC.

Worse, the companies have been moving to have America be a ‘wireless only’ country at hyper-overcharged rates and to privatize the publicly funded wired networks, which they control, handing them over to the wireless company.

What should have happened — America paid for a fiber optic wired future to the home — and these wireless services all require a fiber optic wire.

This hyper-overcharging, then, isn’t just about lowering US wireless prices, but about the corporate control of America’s wireline infrastructure and the fiber optic future we paid for but didn’t get because the money that should have been used to build out the networks was diverted to keep these excessive prices in place.

With the FCC’s plans over the next few months to sacrifice America’s fiber optic future for slow and excessively expensive wireless services, we call for investigations of the flows of money that created this hyper-overcharging and Congress to investigate the FCC’s behavior, as well.

Written by

New Networks Institute,Executive Director, & Founding Member, IRREGULATORS; Telecom analyst for 38 years, and I have been playing the piano for 63 years.

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