Sprint, T-Mobile Execs Continue To Hallucinate Competitors In Their Post-Merger Dreamscape

from the ill-communication dept

Both Sprint and T-Mobile have been pushing a large number of bogus claims justifying their competition and job-eroding megamerger. One, that the deal will create jobs (false). Two, that the deal is necessary to deploy fifth-gen (5G) wireless (false). Three, that reducing the number of major wireless competitors from four to three will somehow create more competition (false, just ask Canadians or the Irish how that works out in practice).

On that last front, the two companies have been trying to claim that because cable industry giants Comcast and Charter (Spectrum) have been flirting with wireless connectivity, that this constitutes enough additional competition to keep the sector healthy in the wake of such massive consolidation. In one T-Mobile deal-related announcement, company CEO John Legere was exceptionally creative in an effort to hallucinate up some additional competition:

"This isn’t a case of going from 4 to 3 wireless companies – there are now at least 7 or 8 big competitors in this converging market. And in 5G, we’ll go from 0 to 1. Only the New T-Mobile will have the capacity to deliver real, nationwide 5G,” added Legere. “We’re confident that, once regulators see the compelling benefits, they’ll agree this is the right move at the right time for consumers and the country."

Except if you spend a few minutes looking at the factual reality under the hood, you'll find that's not actually true.

For example, longtime Wall Street telecom analyst Jeff Kagan circulated a research note with investors last week (hat tip, Stop The Cap) indirectly acknowledging that the cable companies T-Mobile is counting as competition are not serious competitors in the wireless space. Pre-merger, T-Mobile CEO John Legere mocked these cable wireless efforts as "irrelevant." Now that he wants his deal approved, you'll note he's pretending they're a serious threat.

Cable's only real interest in wireless is in finding a way to nudge their existing "triple play" (fixed line broadband, TV, and digital phone) customers into an additional "sticky bundle" that includes a wireless offering. These companies don't even market these services to users unless they're already paying for cable TV, broadband, and phone. It's not a real competitor as it's not offered as a real competitor.

More simply, they want existing customers to bundle wireless because people are generally lazy and won't bother switching to alternatives (read: keep those users locked in and with cable), but they're not really interested in marketing the offering to other users and building a massive nationwide wireless footprint:

"The goal of XFINITY Mobile [from Comcast] is to offer their customers another service and to create a sticky bundle,” Kagan said. “It’s not to lead the wireless wars. It’s not to increase their market share for traditional reasons. It is simply to create a sticky bundle to stabilize and grow their customer base."

“Customers who use one service find it easy to switch away to a competitor,” Kagan said. “However, when they use multiple services and get a discount for the bundle, they become sticky and generally stay put. And the more services a customer uses, the larger the discount, the stickier they get and the less likely they are to wander.”

This is all generally been reflected in Comcast's wireless products, which many analysts note have a decidedly half-assed aspect to them. Both Comcast and Charter's offerings are heavily WiFi driven, but use the Verizon wireless network for cellular backup. Given these cable giants' investors don't want to pay to build a nationwide cellular network, and neither company really wants to upset their partnership with Verizon, there's little real incentive here to more broadly compete in the wireless space, undermining Legere's claims that the two companies will help mitigate much of the negative competitive impact of the deal.

A lot of the lawmakers (on both sides of the aisle) have bought into Sprint and T-Mobile's post-merger competition claims not really understanding this, and they probably should. If you've spent more than four minutes studying U.S. telecom merger history, there's just no real debate that this kind of consolidation usually only benefits sector executives and investors. U.S. consumers, who already pay some of the highest prices in wireless in the developed world, will almost certainly pay higher rates than ever as competition is reduced proportionally. If that sounds good to you, by all means applaud yet more sector consolidation.

Filed Under: competition, consolidation, mergers, wireless
Companies: sprint, t-mobile

5G Has Become The Magic Pixie Dust Of Tech Policy Conversations

from the hype-parade dept

Fifth generation wireless (5G) has quickly become a sort of magical carrot on a stick in tech and telecom policy circles. Telecom lobbyists and the Ajit Pai FCC have spent the better part of the last two years trying to claim that unless we gut consumer protections like net neutrality, America will somehow fall behind in the "race" to 5G. U.S. companies have also convinced the government that if America doesn't want to lose said race (whatever that means), we most assuredly should ban cheaper Chinese networking gear from the country (the protectionism angle of this is entirely coincidental, they'll insist).

More recently, Sprint and T-Mobile have been telling anybody who'll listen that their competition and job eroding merger is the only way to ensure that America doesn't fall behind on 5G. Despite the fact that both companies are on record clearly stating they both could have easily deployed 5G independently, that same argument popped up again this week during merger hearings on Capitol Hill. As did the well-weathered claim that the merger is essential if America wants to beat China in the rush to 5G and avoid being laughed at by the other kids on the 5G playground:

"In prepared remarks, T-Mobile CEO John Legere ties the proposed merger to “American innovation and national security,” and specifically argues that the merger will be necessary to make the United States a leader on next-generation 5G network technology. “The stakes are high — nothing less than preserving our edge in innovation and maintaining our security,” he plans to say.

The CEO plans to say that the US is “falling behind” China on 5G, which he says “has taken a global lead in the race.” He says in the remarks that only a newly merged T-Mobile will be able to compete.

Of course this is all bullshit. As we've noted previously, the "race to 5G" rhetoric is largely nonsense crafted by hardware vendors looking to sell more network hardware and wireless carriers looking to justify high US mobile data prices and spur lagging phone and tablet sales. It's not a race, there's no way to measure a winner (especially given our broadband maps are hot garbage due to regulatory capture), and the only folks likely to win this particular game are the companies selling the hype and related products.

5G is important, but it's not paradigm-rattling important.

5G will be a very useful evolution in wireless in that it will provide faster, lower latency networks that are more easily managed (in large part due to virtualization technology). But 5G is not some mystical fucking panacea. It can't, for example, magically compensate for the reduction in competition in the wake of the T-Mobile deal, a bit of mathematics that never ends well for consumers (go ask a Canadian or the Irish). It won't miraculously compensate for regulatory capture at the Ajit Pai FCC. Given these and other broken market realities, it's unlikely to result in what consumers really want: lower prices.

In tech policy circles, 5G has become the equivalent of lobbying and policy mysticism, entirely untethered from factual reality. You just sprinkle a little bit on your argument and you can use it to justify pretty much anything. Blake Reid, a Professor at Colorado Law, probably put it best:

Again, it's perfectly fine if you're realistically enthusiastic about the modest but important improvements 5G networks are going to bring. But carriers have been trying to pass the technology off as the next industrial revolution and some kind of deus ex machina. Not just because they want to sell product, but because they're using it as a regulatory carrot on a stick, claiming that unless you give big telecom "X" (X=less oversight, more subsidies, merger approval, the death of net neutrality), America will somehow fall behind an arbitrary measurement they've entirely pulled out of their collective ass.

If we follow down the rabbit hole hyping 5G without addressing the massive problems in both the fixed and wireless US broadband markets, this race ends with all of us crying and nursing a pulled hamstring.

Filed Under: 5g, hype, overhype, wireless

Sprint Sues AT&T Over Its Fake 5G, Says AT&T's Tricking Consumers

from the false-and-deceptive dept

Big telecom operators haven't been exactly honest when it comes to the looming fifth-generation wireless standard (5G). Eager to use the improvements to charge higher rates and sell new gear, carriers and network vendors are already dramatically over-hyping where the service is actually available, and what it can actually do. Some, like AT&T, have gone so far as to actively mislead customers by pretending that its existing 4G networks are actually 5G. AT&T took this to the next level recently by issuing phone updates that change the 4G icon to "5GE" on customer phones, despite the fact that actual 5G isn't really available.

In a country with functioning regulatory oversight, a competent regulator would at least issue a statement pointing out that misleading consumers in this fashion is false advertising. Instead, AT&T executives, FCC regulatory capture in tow, have quite literally expressed glee at the consternation their 5G head fake is creating among consumers and competitors alike:

"Every company is guilty of building a narrative of how you want the world to work, and I love the fact that we broke our industry's narrative two days ago, and so they're frustrated and they're going to do what they do," Donovan said.

"I think the result of last month, beating the industry out [with the 5G hotspot], and this 5G E launch a couple of days ago, our competitors are frustrated," Donovan said. "if I have now occupied beachfront real estate in my competitors' heads, that makes me smile."

Late last week Sprint decided to respond by filing a lawsuit against AT&T in US District Court for the Southern District of New York, arguing that the "significance of AT&T’s deception cannot be overstated." AT&T's practice likely qualifies as "unfair and deceptive" under the FTC Act, and Sprint argues that the head fake is potentially costing it customers as consumer buy into the fact than AT&T's ahead of the curve on 5G upgrades:

"AT&T has sought to gain an unfair advantage in the race to 5G by embarking on a nationwide advertising campaign to deceive consumers into believing that its existing 4G LTE Advanced network is now a 5G network...But calling its network “5GE” does not make it a 5G network and instead deceives customers into believing it is something that it is not...AT&T's false and misleading statements deceive consumers into believing that AT&T now operates a 5G wireless network and, through this deception, AT&T seeks to induce consumers to purchase or renew AT&T's services when they might otherwise have purchased Sprint's services."

AT&T's likely to argue that its "5G E" or 5G Evolution technology really does offer faster speeds and better range than traditional 4G by incorporating 4x4 MIMO (multiple input, multiple output) antennas and 256 QAM technologies. Still, that's just an "enhanced" version of 4G, something AT&T tries to tap dance around by using the "E."

However AT&T lawyers frame the company's defense, it's very clear AT&T's still being misleading. Companies that think they're building consumer excitement by misrepresenting what 5G is or where it's available may find this kind of marketing is having the exact opposite impact (frustration, skepticism, distrust) their marketing departments originally hoped for.

Filed Under: 5g, 5ge, mobile broadband, truth in advertising
Companies: at&t, sprint

A Deeper Look At Verizon's Early 5G 'Launch' Finds It's Barely Available

from the aggressively-overhyped dept

Wireless carriers haven't quite gotten the message that their relentless hype surrounding 5G may result in consumers being more annoyed than excited, potentially undermining the entire point.

While 5G is certainly going to be a good thing in that it will provide faster, more resilient connectivity, we've discussed at length how the talk about a "race to 5G" is largely just marketing nonsense pushed by cell carriers and network hardware vendors. As are claims that 5G is going to fundamentally transform the universe in some mystical capacity (like this piece claiming 5G will soon have us all working four day workweeks). 5G is good in that it will provide lower latency, faster connections, but it should be seen more as a modest evolution than some kind of dramatic revolution.

From claims that 5G will magically build the smart cities of tomorrow to lobbying org proclamations of 5G as a job creator, 5G is routinely heralded as something far grander than it actually is by industry. Much of this is tactical; carriers have been using 5G for several years now as a carrot on a stick for gullible regulators, informing them that unless they do everything the industry wants (like, say, gut all meaningful government authority over predatory natural monopolies), the United States will be the laughing stock of the world.

But the fact that over-hyping the tech could cause brand damage is something these companies don't seem particularly concerned about. AT&T, for example, has been widely ridiculed for simply changing the 4G logo on peoples' phones to 5G in the hopes that the press and public were too stupid to know the difference. And AT&T's early 5G offerings have been similarly over-hyped, promising availability in "12 cities" that barely exists if you take a closer look. Pricing isn't so great either, AT&T's initial product delivering just 15 gigabytes of usage for $70, not including network access fees, a $500 hotspot, and usage surcharges.

Verizon's initial 5G offerings are being similarly over-hyped. Despite Verizon's claims last fall that its shiny new 300 Mbps, $50 home 5G service ($70 if you don't bundle Verizon mobile wireless) would be widely available in parts of Houston, Indianapolis, Los Angeles and Sacramento, folks who have actually measured availability say they're not particularly impressed:

"This is not what I expected," Lum said.

Instead of a city covered with 5G signals, and a network geared for mobile services, Lum said he instead found select locations in Sacramento where Verizon built a network that seems exclusively designed to offer fixed wireless services to a handful of potential customers.

Basically, Lum's big takeaway from his work is that, if Verizon wants to cover all of Sacramento with mobile 5G at 28GHz, "you're talking about a crapload of poles."

"I don't think there's enough people in the industry to deploy these," Lum added, noting that antennas would need to be installed every 1,000 feet or so, and each would need the requisite permits, power, backhaul and technicians capable of doing the work. And that labor would have to be replicated at each street corner across Sacramento and, ultimately, across every major and minor city in the country. "I think there's a long way to go," Lum concluded, estimating a ten-year buildout timeline for such an endeavor.

In other words Verizon, fresh off its promise not to over-hype 5G, launched a tiny market trial that can't be replicated at scale, but disguised it as a major industry milestone. This is, of course, well on par with Verizon's past hype efforts, which have included calling the technology the "fourth industrial revolution," and insisting it is "going to change everything."

Again, 5G certainly isn't a bad thing, in that network advancements are always good. 5G, whenever it launches at scale (likely 2021 or later for many), will offer faster, lower latency networks, assuming it's available in your neck of the woods. The virtualization tech accompanying much of the standard will make these networks easier to manage. But 5G isn't some mystical panacea that's going to fix everything wrong with the broadband sector (especially, say, the monopoly over cell tower backhaul, waning competition in light of mindless merger mania, or the glaring regulatory capture we do nothing about).

By overstating what 5G is carriers risk setting consumer expectations too high, and carriers may just be cementing a backlash as consumers realize that 5G (especially 5G pricing) isn't anything close to an actual miracle, assuming it's even actually available. And given the damage the sector has done to its brand during the recent games of regulatory patty cake with Ajit Pai, good will towards this telecom industry was already arguably in short supply.

Filed Under: 5g, overhype, wireless
Companies: verizon

Apple Helps AT&T Mislead Consumers With Fake 5G

from the double-head-fake dept

Last month we noted how AT&T had pissed off competitors and consumers alike by pretending its existing fourth generation wireless network (4G) was actually 5G. More specifically, AT&T has been changing the "4G" icon on its customers phones to say "5G E," despite the fact that actual 5G service at scale is still probably several years away. Technically, AT&T simply took some of the improvements it recently added to its 4G networks (like better MIMO antennas and more efficient 256 QAM technologies), and decided to call this "5G Evolution" in a bid to pretend it was the first to launch actual 5G.

Over-hyping your product's capabilities and availability isn't a particularly bright idea, since you're only associating your brand and the 5G standard with disappointment. Despite being widely criticized for the practice, AT&T appears to have learned very little from the process, only responding by expressing glee at the amount of consternation created among consumers and competitors alike:

"Every company is guilty of building a narrative of how you want the world to work, and I love the fact that we broke our industry's narrative two days ago, and so they're frustrated and they're going to do what they do," Donovan said.

I think the result of last month, beating the industry out [with the 5G hotspot], and this 5G E launch a couple of days ago, our competitors are frustrated," Donovan said. "if I have now occupied beachfront real estate in my competitors' heads, that makes me smile."

The problem for AT&T is its launch of actual 5G was just as misleading. The company proclaimed it was the first carrier to "launch" 5G in 12 cities as of last December, but a closer examination finds the service is only available in a few areas, and at pricing that fails to impress ($500 for a mobile hotspot that's not widely available, $70 for just 15 GB of usage, plus network access fees).

Meanwhile, AT&T's seeing no real market or regulatory punishment for misleading customers about that fake 5G E label popping up on phones. The company had already made the change on Android, and last week Apple was happy to roll out an update that applied the inaccurate label on iPhones as well.

"Multiple users on Twitter are now reporting that they’re seeing the new 5G E icon on devices running the latest iOS 12.2 beta 2, which was released earlier today. The new icon isn’t there for everyone, presumably because it will only appear in cities where AT&T’s 5G Evolution network — the company’s intentionally misleading name for its LTE network that it seems to hope customers will confuse for actual, next-generation 5G networks — is active."

Nifty. Of course Apple isn't even planning to offer a real 5G-capable phone until at least 2020, so they similarly have an incentive to try and fool customers into thinking their phone has suddenly received an incredible new upgrade. Cumulatively there are a lot of companies busy overstating the availability and capability of a technology that, in reality, barely even exists. That's going to operate in the exact opposite way as it's intended, since it teaches customers to see 5G itself (which really does deliver some modest evolutionary improvements in both speed, reliability, and latency) as little more than another empty promise.

Filed Under: 5g, 5ge, fake 5g, iphone, marketing, mobile data
Companies: apple, at&t

FCC Accused Of Colluding With Big Carriers On 5G Policy

from the ill-communication dept

So we recently noted how the FCC pushed through some policy changes it proclaimed would dramatically speed up the deployment of fifth-generation (5G) wireless technology. According to the new guidance, cities will be limited in terms of how much money they can charge carriers to place cell technology like small cells on government property in public rights of way (traffic lights, utility poles). The policy changes also impose strict new timelines and operational restrictions making it harder for localities to stand up to giant nationwide cellular carriers.

But cities like Philadelphia, numerous small counties, and consumer groups disagreed, stating that the FCC's policy changes were little more than a hand out to large carriers, with the price caps barely covering local government costs to study, support and maintain the numerous small cell placements needed to fuel 5G. In some instances, the FCC's new order invalidated existing contracts local governments had already taken months or years to negotiate with wireless carriers.

Consumer groups say the FCC's order also ties local governments' hands in instances where they might need to actually hold AT&T, Verizon, or T-Mobile accountable for doing something wrong.

While the FCC's decision was already being criticized as an over-reach, that controversy just got much louder. This week, the heads of the House Energy and Commerce Committee, and the Subcommittee on Communications and Technology (Frank Pallone and Mike Doyle) fired off a letter to the FCC effectively accusing the agency of colluding with carriers to help ensure the industry's favored policies had a better shot surviving a court challenge. The letter strongly implies that the Representatives already have whistleblower evidence of said collusion:

"It has come to our attention that certain individuals at the FCC may have urged companies to challenge the order the commission adopted in order to game the judicial lottery procedure and intimated the agency would look unfavorably towards entities that were not helpful. If true, it would be inappropriate for the FCC to leverage its power as a regulator to influence regulated companies to further its agenda in seeking a more friendly court. To date, four FCC licensees have petitioned the federal judiciary for review of the order in separate filings and separate circuits."

Municipalities have been grumbling about something fishy at the FCC on this subject for a while. They've pointed out that when the FCC passed what's effectively wish-list policy aiding incumbent wireless carriers, the carriers mysteriously and collectively sued to challenge the order. Why? It appears they, at the FCC's guidance, challenged the order itself as part of a gambit to keep the challenge from being heard by The Ninth Circuit, which has historically liked giving the FCC a wrist slap for over-reach, especially when it tries to pre-empt more local government authority.

Short version: the lawmakers are alleging the FCC actively worked hand in hand with carrier lawyers to hamstring court challenges to the FCC's latest 5G order, an allegation that's not particularly outlandish if you've actually watched the Ajit Pai FCC do business. And again, the letter's phrased in such a way to suggest the lawmakers already have this information and are just waiting for the FCC to try and mislead them about it or withhold evidence the staffers know the FCC has. It's just one of a growing roster of challenges facing Ajit Pai's FCC under new House leadership.

We've talked at length about how the solution for the terrible state of US broadband needs to be a creative, comprehensive solution that involves both the industry and local governments -- since private industry alone is turned off by the low return on investment into rural markets and less affluent city centers.

But wary this could result in actual competition, the telecom industry's incumbent players (and the politicians and revolving door regulators who adore them) go out of their way to instead demonize local towns and cities, pass protectionist laws preventing the exploration of creative solutions, and gut state and federal oversight of big telecom wherever possible in the false belief this will magically fix a very, very broken market. When critics point out that mindless fealty won't fix American broadband, the Trump FCC simply dismisses said criticism as unfair partisanship.

Ajit Pai is already facing a pretty ugly 2019 thanks to the challenge of his historically unpopular repeal of net neutrality rules, and if this allegation has wait, things just got even more complicated for the "internet freedom" lovin' agency boss.

Filed Under: ajit pai, carriers, collusion, congress, fcc, frank pallone, mike doyle, regulatory capture
Companies: at&t, sprint, t-mobile, verizon

Anna Eshoo, Other Lawmakers Offer Gushing, Facts-Optional Support For T-Mobile Sprint Merger

from the ill-communication dept

We've repeatedly explained how T-Mobile and Sprint's latest attempt to merge will be terrible for both jobs and competition. Despite what T-Mobile and Sprint executives have claimed, history suggests the reduction of total wireless carriers from four to three will likely result in less incentive than ever to seriously compete on price. Similarly, while T-Mobile and Sprint have told regulators that the deal will somehow create an explosion in new jobs, Wall Street analysts have predicted that the deal could kill off tens of thousands of US jobs as the new company inevitably eliminates redundant positions.

This was the same Sprint, T-Mobile merger that had been blocked previously by lawmakers. And it's not a far cry from AT&T's attempted takeover of T-Mobile, which was also blocked back in 2011. Generally speaking, people have recognized that reducing overall competitors in a telecom market never quite works out well for anybody other than executives and investors. Yet here we are, once again, with folks oddly not quite understanding that reality.

Case in point, Anna Eshoo and numerous other House lawmakers fired off a letter (pdf) this week to both the DOJ and FCC urging both agencies to approve the merger post-haste. One of the cornerstones of the letter is that the merger is essential for the US quest to deploy 5G networks, something the carriers themselves at various points have admitted is not actually true. It also repeats the claim that eliminating one of just four competitors will somehow increase competition, something disproven by any economics 101 textbook (and 50 years of telecom history, including Canada's).

But, as is usually the case when it comes to breathless support for harmful megamergers, the letter's primary claim is that the deal will somehow create all manner of new jobs:

"We anticipate that the combination of T-Mobile and Sprint, compete with the respective resources and strengths of each, will help to preserve the jobs of workers at each company. This holds the potential demand for new workers as a result of a more broadly robust, innovative, and thriving wireless telecommunications sector."

Again though, that's not what the actual data (or history) suggests. In fact, Wall Street analysts have been noting for two damn years now that the deal has the potential to cost anywhere between 10,000 and 30,000 jobs, particularly as redundant retail operations and duplicative HQs are streamlined:

"Direct payroll savings have been a big part of each analysis of a merger between the nation’s third- and fourth-largest wireless carriers. Few of those reports, however, have put a number on the headcount reductions. One that did was by Craig Moffett of MoffettNathanson Research. Last August, he put pen to paper and found reason to expect 20,000 job cuts from a merger.

Moffett’s report showed most of those would be retail workers. Sprint and T-Mobile each want more retail outlets, but a combined company wouldn’t need as many stores as both have currently. It would make business sense to close stores near each other. “We conservatively estimate that a total of 3,000 of Sprint and T-Mobile’s branded stores (or branded-equivalent stores) would eventually close,” Moffett’s report said. Each of those, he said, would mean the loss of five full time jobs, or 15,000 jobs in total.

Some analysts peg the losses closer to 10,000, while others believe 30,000 lost jobs is possible over time (more than Sprint even currently employs). Unions have argued that the number of total lost positions could be somewhere around 28,000, including 4,500 from the inevitable closure of Sprint's current Overland, Kansas HQ (which T-Mobile is telling everyone will remain open). If you've tracked megamergers at companies like Comcast, AT&T, and Verizon, these kinds of projections aren't really that outlandish, they just tend to get lost in the shuffle since only academics and consumer advocates tend to care about the reality post-merger.

The fact that T-Mobile CEO John Legere is kind of a fun dudebro has netted T-Mobile a lot of benefit of the doubt where it probably shouldn't exist, overshadowing how despite being a company with pro-consumer branding, much of the company's behaviors (like opposing net neutrality or pandering to Trump) aren't all that different from the companies (AT&T, Verizon) T-Mobile claims to be so much better than. Given more than a few of these Representatives have spent significant time insisting they're consumer allies on telecom issues, their breathless support of a bad deal is somewhat disappointing.

Filed Under: anna eshoo, competition, jobs, mergers, mobile phones
Companies: sprint, t-mobile

Canadians Pay The Highest Rates For Wireless Data, And The US Is About To Follow Suit

from the ill-communication dept

However bad American broadband and wireless service can be, generally speaking Canadians have it worse. Plagued by the same sort of revolving door regulator approach taken in the US, Canada pretty routinely makes an even poorer showing than the United States when it comes to broadband pricing, availability, and service quality. And, just like the United States, Canada's solution is often to appoint industry lobbyists to positions of power, who immediately get to work making things worse for their entrenched incumbent pals. Here in the States that's Ajit Pai; in Canada it's Ian Scott.

Needless to say, installing revolving door industry sycophants to solve problems the industry refuses to even acknowledge doesn't work out particularly well for consumers, competition, startups, or innovation in general -- as consumers and small businesses run face first into entirely unnecessary usage constraints. Constraints made worse if you've, say, killed off net neutrality protections, or have net neutrality protections nobody actually wants to enforce.

As Canadian Law Professor Michael Geist explores this week, data illustrates how Canadian telcos make some of the biggest profits on the planet thanks to limited competition. That, in turn, results in carriers implementing arbitrary usage caps and charging an arm and a leg per gigabyte, which in turn results in less actual usage by folks afraid of running afoul of arbitrary network restrictions specifically designed to nickel and dime users:

"The total revenue per gigabyte here is roughly 70 times higher than in India and 23 times higher than in Finland. And consequently, mobile usage is lower than average...The charts show where Canada stands relative to other countries with carriers generating more revenue per GB than anywhere else in the world and consequently Canada lagging behind many other countries in wireless usage."

Not too surprisingly, that's courtesy of the fact that Canada has just three major wireless providers, who don't try very hard to actually compete. And, like Ajit Pai, Scott has fostered a reputation for not giving much of a damn, since his primary objective (ensuring entrenched carriers are ultra-profitable) has been met.

Another recent study out of Canada, unsurprisingly, shows that Canada has some of the most expensive wireless data plans in the entire developed world:

"Report after report, year after year, has confirmed that cellphone services cost more in Canada than almost anywhere else in the world – on average, more than $90 a month. Canada’s Big Three telecom companies – Rogers, Bell and Telus – operate in a market with scant real competition and enjoy some of the highest profit margins per customer.

The US doesn't fare much better, though having four major carriers instead of three has mitigated some of that impact. But that's all about to change thanks to T-Mobile's looming merger with Sprint, which will only further reduce any incentive to seriously compete on price. Combined with the death of net neutrality and the FCC's eagerness to effectively neuter itself at carrier lobbyist request, and it's not hard to see how the door is being opened wide to higher prices, worse service, and even more annoying network limitations specifically built to make wireless service more expensive and annoying to use. And no, 5G won't save you.

Filed Under: canada, competition, fcc, mobile data, mobile phone rates, us

AT&T Execs Think It's Really Funny They Misled Consumers About 5G Availability

from the too-clever-by-half dept

So earlier this month, we noted how AT&T had pissed off competitors and consumers alike by pretending its existing fourth generation wireless network (4G) was actually 5G. More specifically, AT&T has been changing the "4G" icon on its customers phones to say "5G E," despite the fact that actual 5G service at scale is still probably several years away. Technically, AT&T simply took some of the improvements it recently added to its 4G networks (like better MIMO antennas and more efficient 256 QAM technologies), and decided to call this "5G Evolution" in a bid to pretend it was the first to launch actual 5G.

Competitors and consumers noticed.

Competitors like T-Mobile have been having fun making fun of AT&T's head fake on Twitter:

Here's where a normal company would acknowledge it had been overly creative and announce that in a bid to avoid confusing customers, it would walk back what was fairly obviously a bad, misleading idea. But that's not how AT&T rolls. When pressed for comment, AT&T Communications CEO John Donovan decided instead to double down, and expressed glee at the level of consternation AT&T's fake 5G created:

"Every company is guilty of building a narrative of how you want the world to work, and I love the fact that we broke our industry's narrative two days ago, and so they're frustrated and they're going to do what they do," Donovan said.

Except it's not just AT&T's competitors that are frustrated. Customers also think AT&T's moves are misleading, something that harms AT&T since consumers are being trained to see AT&T's 5G promises as horse shit at this juncture. Donovan though remained undaunted in his excitement over the confusion his marketing gambit sowed:

"I think the result of last month, beating the industry out [with the 5G hotspot], and this 5G E launch a couple of days ago, our competitors are frustrated," Donovan said. "if I have now occupied beachfront real estate in my competitors' heads, that makes me smile."

Granted if you've watched AT&T mislead the press, public, and government on subjects like net neutrality or misleading billing, this is certainly well in character for the telecom giant. AT&T's not likely to learn the underlying lesson here: instead of getting consumers excited about the real potential for 5G, they've fixated consumers and the press on the fact that AT&T's promises surrounding this technology shouldn't be believed.

Customers were already skeptical of wireless carrier claims given years of misleading coverage maps, and this sort of behavior will only support the belief that, for lack of a more technical term, the wireless sector is often aggressively full of shit.

Filed Under: 5g, 5g evolution, john noovan, lies, wireless
Companies: at&t

Verizon Promises Not To Over-Hype 5G, Immediately Proceeds To Over-Hype 5G

from the ill-communication dept

We've talked a lot about how while fifth-generation wireless is a good thing (in that faster, more reliable networks are always good), it's been comically over-hyped by cellular carriers and network hardware vendors. It has also been accompanied by what appears to be a race between cellular carriers to broadly misrepresent what 5G is capable of, and where and when it will actually be available. AT&T, for example, began changing the 4G icons on user phones to "5GE," despite the fact actual 5G isn't even out of the oven yet.

Hoping to apparently cash in on AT&T's well-mocked decision while at CES, Verizon subsequently penned this blog post trying to proclaim itself as the more measured of the wired carriers when it comes to 5G:

"The potential for 5G is awesome, but the potential to over-hype and under-deliver on the 5G promise is a temptation that the wireless industry must resist. If network providers, equipment manufacturers, handset makers, app developers and others in the wireless ecosystem engage in behavior designed to purposefully confuse consumers, public officials and the investment community about what 5G really is, we risk alienating the very people we want most to join in developing and harnessing this exciting new technology."

The problem is that Verizon has been at the very forefront of over-hyping 5G for years now. When I went to go dig up numerous past CES appearances where Verizon insisted that 5G would "transform society," I'd noticed they'd disappeared from the CES website. That said, Verizon's own website is filled with examples where the company insists that only 5G can really help us build the smart cities of tomorrow, helping to "spur economic growth," and "improve the quality of life" for city residents. And Verizon's CES appearance by CEO Hans Vesterberg was packed with what most certainly smelled like misleading hype to me:

"It’s going to change everything,” said Vestberg, athletically clad in a tight Verizon-branded T-shirt that wouldn’t be out of place at an Apple or Google product launch.

"It’s quantum leap over 4G,” Vestberg added, in a statement he repeated no less than four times.

Did he also use the term “fourth industrial revolution,” another favorite of 5G marketers? Yup. At least three times.

This idea that a universe of smart city and smart car innovation is only possible via 5G has always been misleading in and of itself. Yes, faster, more resilient networks are good, but there's nothing inherently magical about 5G that will make it somehow forge innovation out of whole cloth. Most existing 4G networks can generally do most of what 5G can (especially with the latest MIMO antenna or other upgrades), 5G networks will just be faster and more resilient with lower latency. 5G is not some mystical panacea. It will, however, probably be used to justify Verizon's higher prices, to be sure.

Verizon has also been accused by competitors like T-Mobile of being misleading on timelines for 5G delivery:

That said not everybody was all that impressed by Verizon's CES demonstration of the "5G revolution":

Again: 5G will ultimately be a good thing whenever it arrives at any real scale (likely 2020 and later), offering faster speeds, lower latency, and greater reliability. But it's not going to magically fix the wireless sector's nastier problems, like high prices due to regional cell tower backhaul monopolies, the waning competition caused by merger mania, or the slow but steady erosion of internet equality and consumer protections thanks to the industry's lobbying stranglehold over government.

Filed Under: 5g, hype
Companies: verizon