Wireless Smartphones with Only 10Mbps Down, 1Mbps Up, are Not a Substitute for a Wired Broadband Connection.

10/19/2017 02:39 pm ET

This article is Part III of a series:

  • Part I is a discussion of how the FCC has manipulated some of the statistics in their recent 20th wireless report to help AT&T and Verizon over the public and your interests.
  • Part II: America is 59th in LTE speeds and more expensive for data than 39 other countries, not to mention that 40%+ of your data usage is for adtech and software designed to track your online usage, and even your location.

Gigabit this? 5G that? If Verizon, AT&T, with the captured FCC, get their way:

Imagine going home and your smartphone is now your home broadband & Internet connection, not to mention with a speed of 10Mbps down, 1Mbps up, and there are caps on usage, even with unlimited plans, which craps out after 22GB. And your kids have to do their homework using this and your business has to rely on this.

Why Is Wireless Not a Substitute for Wireline?

This chart is based on Netflix info that answers the question: “How can I control how much data Netflix uses?” It also uses this Netflix data to answer the question – “How much data is used, on average, to watch TV per month?” based on Nielsen’s 2017 report. And it details how much data is used to watch one movie (which can range from 90 minutes to over 2 hours; we use 100 minutes).

Here are some data points using this information (and the previous articles).

  • Current ‘unlimited’ plans are not unlimited; AT&T caps the speed after 22GB.
  • Based on the Netflix usage model, one HD movie uses about 5GB and the higher quality 4K video uses 11.7GB.
  • Thus, the unlimited plans would deliver less than two 4K movies or four HD movies, then be unusable for video.
  • AT&T’s other wireless plans can’t support viewing HD or 4K movies. For example, AT&T’s 10GB plan costs $80.00 just for the data, not counting other fees; two HD movies would cost at least $40.00 each.
  • Nielsen found that the average person watched 142 hours of TV a month in 2016.
  • It would take 426GB just to watch the equivalent of one month of HD TV per person. At $80.00 for 10GB this would be… very, very expensive.
  • Current unlimited plans can’t compete even with DSL in price or speed, (even with the differences in formatting and speed to optimize for wireless viewing).
  • Only 1.8% of the Population Watch TV on a Smartphone.
  • Caveats: There are ‘sponsored’ and ‘zero rated’ video (that use less or none of the plan’s data), as well as ‘data saving’ settings, and ties with other services like AT&T-DirecTV, etc.
  • Promotional gimmicks are not a substitute for a reliable, fast broadband-internet service to the home or office at reasonable rates.
  • Whamming, unconscious billing, not to mention the actual advertising being played and other billing tricks are not included in this video streaming accounting. The phone is racking up other data charges that are hidden from view, which can add 40% to overall billable usage.

As previously noted:

  • AT&T is getting almost $3 billion from the government– about $2,700 per line, for 1.1 million locations in ‘unserved areas’ with wireless at 10Mbps down, 1Mbps up. Originally, AT&T claimed it would be offering service to 13 million.
  • Many of these locations should have already been upgraded and maintained as customers paid multiple times for upgrades.

And the FCC’s plans are an impediment to economic growth and the ability to use new services. Video Conferencing Daily (VCDaily) writes:

“The FCC Ruling on High-Speed Internet Will Limit Your Video Calling Social Life”
“In practical terms, 10Mbps/1Mbps is less than half the bandwidth required to watch 4K streams on Netflix or YouTube. It’s not even enough to make a high-definition video call on Skype—and seeing as HD is basically the industry standard for webcams, that’s a big blow.”

In short, the FCC, working with Verizon and AT&T, want to lower the speed of broadband to 10Mbps download, 1Mbps up, and make this the new US standard, even in the home. The plan is to ‘shut off’ the retail wires and force-march customers onto more expensive wireless, and the lower speeds will allow the FCC and companies to make claims that ‘everyone’ has broadband. I.e., the government wants to manipulate the data to help Verizon and AT&T, and not, say, rural customers.

And with the escalating price of cable TV, etc. even if you have a choice of a cable provider, the majority of the US doesn’t have serious competition to lower prices, much less competition to leave for a ‘better’ deal.

At the core of this are three major items:

  • Price-per-gig wireless billing vs ‘truly unlimited’; wireline services are not ‘capped’, for the most part, or billed by the gig.
  • No one really wants to watch TV on their smartphone, and these wireless services are too expensive, too slow, and not big-screen-based.
  • More wireless profits through financial accounting manipulation: Since the wireless companies can dump major expenses into the wireline side and not pay market prices, (which also makes the wired networks look unprofitable), they gamed the regulatory system and captured the FCC to not investigate these financial issues. This is on top of major government subsidies for AT&T.

And note: If you say “I already have wireless at home with my tablet”, please check the wireless router and notice it probably goes to a wire, a cable wire sometimes, where the broadband connection is not ‘wireless’ but wired, like a cordless phone.

Another caveat: Independent Wireless ISPs (“WISPS”) are needed. It is important to differentiate that there are small wireless competitors who showed up and offer a wireless substitute in mostly rural areas where the incumbent phone company has just abandoned any obligation to make sure that there is even reliable wired phone service, much less broadband.

We are addressing the incumbent companies, especially AT&T and Verizon, who control the wires of the state utility as well as want to ‘shut off’ areas of the US and replace them with their wireless instead of properly upgrading their networks or even maintaining the existing networks.

Conclusion: Wireless Is Not a Substitute for Wireline Cable TV, Internet or Even DSL, Much Less a Fiber Optic-Based Service.

The Basics:

Netflix Info and Movies on a Big Screen.

The opening chart is from Netflix and it included the “GB Per Hour” used and the size of one movie, (which can range from 90 minutes to over 2 hours). We use 100 minutes.

“Of the ten films nominated for best picture in 2016, eight were over two hours long.”

Staring at the opening chart, if the person watches just one movie (at 100 minutes), they will use up 5GB if it is watched with HD quality. And forget the newer, larger formats such as “4K” Ultra HD quality, which uses up 11.7GB a movie.

AT&T’s has a Number of Plans that Demonstrate this Wireless Farce.

In Part I we discussed AT&T’s current basic and unlimited plans and it is worth repeating here. It is clear that they are inadequate to watch a few HD movies using a smartphone with the current pricing and data allotments, especially if it is tethered to a large screen.

  • AT&T’s basic plans’ pricing and what you get can’t support watching movies, even at SD quality. (And the price quoted doesn’t include the smartphone or tablet access charges as well as the taxes, fees or surcharges.)

And just to show how absurd this is; it takes about 10GB for just two HD movies which means that with a 10GB plan it would cost about $40.00+ per movie or almost $60.00 to watch one HD movie on the 6GB plan. (If the movie is over two hours, you don’t even get to see how the movie ends.)

The Unlimited Plans? These Plans Are Not ‘Unlimited’.

Moreover, AT&T, like the other carriers, are all offering bogus ‘unlimited’ service plans as they are not unlimited. After 22GB they crap out and dramatically slow down. AT&T states:

“Video may be limited to SD (not HD). After 22GB of data usage, AT&T may slow speeds.”

And:

“Overage Charges and Data Speeds: No charge for overage. After all your high-speed data allotments are used, all data usage is slowed to a max of 128Kbps (2G speed) for the rest of the bill cycle. You will have basic data use for viewing a web page or checking email. Audio and video streaming, picture and video messaging, as well as other usage, including sponsored data, will be impacted and may not be fully functional. See att.com/broadbandinfo for more details.”

But it is the caveats on the current AT&T unlimited plans that makes all of this exceptionally screwy as AT&T slows down the speeds of the video, and with some unlimited plans either supplies only 10GB to use a hotspot or restricts it – i.e.; you don’t get to use the wireless service for other devices. And the speed is based on 3Mbps and only 1.5Mbps for video.

AT&T’s FAQ states:

This all also begs the question: Where’s the gigabit blazing speed or the average the FCC quoted “LTE download speed - 23.5Mbps for the first half of 2017”?

AT&T does have ‘sponsored’ video plans that can include HBO as well as a deal with DirecTV, and some may be tied to data usage, some are not; I.e.; you get HBO but it stops working after you hit 22 GB, it would appear.

“Enjoy unlimited access to the best of the HBO®. Watch entertaining movies, addictive shows, and more at home or on the go, with our best wireless deal ever.”

But are people clamoring to watch video on small screens, much less with massive restrictions?

Only 1.8% of the Population Watch TV on a Smartphone.

And while there are those who talk of ‘cutting the cord’, which cord are they referring to; local phone voice service or data services via a wire at home?

This next chart from Nielsen shows that while it sounds cool to watch video on your smartphone, it is obviously more hype than reality, though it does vary by age group.

“A new analysis of insights from Nielsen's fourth-quarter 2016 Comparable Metrics Report found that over 92% of all viewing among U.S. adults (18+) happens on the TV screen.”

Since the smartphones may or may not be ‘tethered’ to a large screen or even the PC monitor, except in short intervals, it is clear that this trend is not going to take over anytime soon.

Watching Cable TV Over a Smartphone Is Impossible.

Fortune details consumer viewing from the 2017 Nielsen report:

People spent an average of 142 hours and 35 minutes every month watching live TV as well as recorded or time-shifted TV in the fourth quarter of last year, Nielsen said.”

Referencing the chart in the beginning, when comparing Nielsen viewing with Netflix data usage:

  • If a person used their smartphone to mimic cable TV viewing, even at the “SD quality”, they would have to use 99.4GB a month.
  • With the current allotment of service at 22GB, the person can see only 4 HD full movies, not a month of ‘cable-like-TV’.

Thus, with the severe limitations in the AT&T fine print about the speeds delivered with the unlimited plans, (the speed is limited to a max of 3Mbps, and the video at 1.5Mbps, then slowed after 22Mbps), wireless is not a substitute for wired TV viewing (including the cable wires).

I need to repeat, this is 3Mbps and 1.5Mbps: 1000Mbps =1Gbps, a fraction of 1%.

DSL vs Wireless in the Home? Truly Unlimited vs Price Per Gig.

And here is where it gets ugly. AT&T and Verizon could have, at any time, upgraded the existing copper wires to at least deliver DSL, which, if you look at the speed, can deliver exactly what AT&T is getting $2,700.00 a line for—crap wireless, at a speed of 10Mbps download 1 upload.

  • Verizon DSL costs $34.99, not counting the phone service, and the upper speed is 7.1Mbps to 15Mbps down.
  • It is mostly “unlimited” in the true sense of the word as it has historically had no caps applied.
  • Customers already paid for upgrades of these wires multiple times.
  • And the “not profitable” argument is based on manipulated accounting to show that the wires were not profitable to maintain; and it has been just an act to force-march customers onto more expensive wireless, with less service, and get billions in government subsidies.

Instead, AT&T is getting $3 billion dollars to deliver 1.1 million locations by 2020, when they could have, and should have, been upgrading this copper to fiber optics, or at least maintained and increased the speed of DSL as U-verse uses the copper wires with a fiber optic ‘node’ within ½ mile.

“AT&T Launches First Wave of Fixed Wireless Internet Availability to Rural and Underserved Areas”, Apr 24, 2017
“Now Available in Georgia, With Plans to Reach Over 400,000 Locations in 18 States by End of Year and Over 1.1 Million Locations by 2020”

We note that these services offer more ‘GB’, but the speed is still 10Mbps down and 1Mbps upload. The footnote states:

“Includes 160GB data bucket per month. Req’s installation of AT&T outdoor antennae & indoor Residential Gateway. $10/50GB of additional data up to a max of $200/mo.”

Considering this is only going to 1.1 million customers by the end of 2020, and will cost customers hundreds of dollars to get what DSL should have already been delivering – and AT&T is getting $2,700.00 per household for locations that they should have already upgraded – all of this maneuvering needs immediate investigation.

We added Part IV which is a summary as well as connects the dots about how this impacts the current regulatory environment in the era of the Trump-Chairman Pai FCC.

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