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Consumers should be wary of pitches by telecommunications companies for their newer, faster "4G" wireless service, according to a new report from Public Knowledge.
The report, "4G + Data Caps = Magic Beans," finds that consumers will find their experiences with the faster services severely hampered by the rationing techniques the carriers impose on customers who use lots data -- such as watching video.
The report found: "These data caps actively discourage the types of activities that 4G enables. Activities that are made possible by 4G, such as watching movies or uploading video to the internet, are made impossible by the data caps. As a result most users will avoid taking advantage of these new services out of fear of incurring large overage fees. That makes capped 4G little more than a bait and switch, like being sold a handful of magic beans."
While the report notes that 4G can be a useful technology because it could provide faster and better service, the report concluded: "The imposition of data caps on 4G networks marks an unfortunate milestone in the history of network innovation. For the perhaps first time, the introduction of a generationally faster technology will not have a widespread impact on online behavior. As long as there are low data caps, most users will be better off staying with a (cheaper and slower) 3G connection than paying a premium for 4G."
Harold Feld, legal director of Public Knowledge, said: "This report should serve as a warning to consumers not to be misled by the flashy ads and fancy phones. This is a classic bait-and-switch technique. On one hand, the big telecommunications are offering consumers great new experiences, but on the other, they are actively trying to restrict their use."
A copy of the paper is here.
A video about it is here.
A blog post about it is here.