How Can “Unlimited Data” From a Company Called Straight Talk be Ambiguous?

Those who know me know that, despite working for such a technology oriented outfit, I still use a three year old LG clamshell phone that at this point can barely handle text messaging. It’s not that I don’t want a fancier phone, it’s just that I have not quite come to terms with having to buy a fancy new phone plus having to pay extra for data every month. Imagine my excitement when I saw that Walmart is going to start offering unlimited talk, text, and DATA for only $45/mo through a service called Straight Talk.

Why “Straight Talk” Appeared to be Awesome

Let me put that number in context. Right now, Verizon Wireless is offering a Basic Plan starting at $39.99/mo. The Basic Plan comes with 450 anytime minutes and makes you pay for both data ($1.99/MB) and text ($0.20/Message – yes, you read that right) separately. AT&T Wireless offers an almost identical plan for an identical price (strange for a supposedly competitive market, but I digress).

For just $5 more, Walmart appears to be offering infinitely more talk minutes, text messages, and (most importantly to my dreams of cell phone coolness) data. I saw my chance to laugh in the face of my friends and colleagues playing $80/mo. to run their fancy iPhones. Plus, Walmart is using Verizon’s network. That means I would get to laugh at them by saving money and laugh at them by actually being able to use my phone to send and receive calls.

Unlimited Becomes The Opposite of Unlimited (Limited)

Of course, there was a catch. The first catch, which was highlighted in early reports, was that the phone was going to cost me $100 and I had to choose from a limited number of lackluster offerings. This is unfortunate, but not a deal killer. After all, I can deal with a less than awesome looking phone as I enjoy my unlimited access to data. My dreams of walking around with KCRW or Pandora streaming music all day while I plot the continued dominance of my fantasy football team would not be destroyed just because my phone was not the coolest on the block.

Then I got to the real catch. Before the big reveal, let me pause for a moment and point out what it took to get to the real catch. The front page of the website just says “Unlimited Data.” In order to figure out what “Unlimited Data” actually means, I had to get deep into the terms of service. Keep in mind I have been here at PK for over two years now, and I just graduated from law school. I do not write this to impress you. Rather, I write it to suggest that I probably have a higher-than-average capacity to wade through cell phone carrier terms of service. Half way through the terms of service there is a mention of the streaming limitations. It was not until two thirds of the way though – deeper than just about anyone not thinking about writing a blog post would ever bother to read – that “Unlimited Data” gets defined. This would not be a problem if the terms of service merely said “Unlimited Data means you can use as much data as you want.” Obviously, it did not say that.

It turns out that “Unlimited Data” does not actually mean unlimited data. As I mentioned, the terms and conditions explicitly prohibit “uploading, downloading or streaming of audio or video programming or games” – that means goodbye Internet radio.

Second, and this ended up being the deal killer, was this section:

Straight Talk Unlimited talk, text and data plan Features cannot be used: (1) for access to the Internet, intranets, or other data networks except as the device’s native applications and capabilities permit, or (2) for any applications that tether your device to laptops or personal computers other than for the use of Wireless Synch.

The section limits my use of the Internet to programs loaded by Straight Talk and Walmart on my middling handset. I find it hard to believe that a company offering “unlimited” data on the cheap will be working hard to install software that actually encourages me to use data very often. Or that they will be rushing to give me access to the Internet beyond a limited sandbox – what if they don’t have a deal to let me access my fantasy football? I hope Walmart will prove me wrong, but I am not holding my breath.

This does not mean that the Walmart deal is all bad. It may be pretty good if you are only interested in voice and text. I actually do not know how it stacks up against other pre-paid voice/text offerings out there, and for me it does not really matter. Mobile is moving towards (and really is already all about) data. As we have pointed out in our text messaging petition, in a competitive market unlimited text messages would come at nominal cost. A number of applications, like Skype and Google Voice, make the idea of separate voice and data subscriptions redundant. In a few years, it may be that we look back and wonder why we separated out voice and text and data, instead of just recognizing that everything is “data” and paying for it once.

Policy Implications

This entire episode provides an excellent example of the importance of network neutrality and of consumer disclosure. On the network neutrality front, part of FCC Chairman Genachowski’s recent speech on network neutrality included extending the Internet principles to wireless. This would mean that I would be free to attach any non-harmful device to my unlimited data plan. I could use whatever phone I wanted loaded with whatever software I desired with my subscription.

On the consumer disclosure front, caveats in the fine print make it hard to compare mobile plans. On the surface, $45/mo. for unlimited data from Walmart seems like a much better deal than an $80/mo. iPhone contract. However, if you take a hard look at the offer and you are interested in data, you realize the plans cannot be compared at all. Data on the iPhone means the Internet. Data from Walmart surely means something, but not the Internet. Consumers have to be able to quickly and easily compare competing mobile plans in order to make informed decisions. It should not require wading through paragraphs of terms and conditions just to discover that a huge selling point – unlimited – does not really mean what you might think.