Tag: Deception

Cutting Through Bullshit Around 5G Latency

Christian

There’s a lot of unrealistic hype going around about 5G. Most of the hype focuses on the blazing-fast speeds 5G can offer.

Today, T-Mobile’s CEO, Mike Sievert, made a big deal about 5G latency rather than 5G speed:1

Latency measures the time delay involved in data transfer. It’s common for 4G connections to have a latency of about one-twentieth of a second (50 milliseconds). Some 5G technologies may be able to push latency far lower.

The video Sievert shared is allegedly a demonstration of latency under different technologies. It’s not remotely fair. The phone supposedly demonstrating a 4G LTE connection is about five seconds behind the real world. Latency isn’t anywhere near that bad with 4G. If it was that bad, normal voice conversations and video chats using 4G wouldn’t be possible.

AT&T Drops 5GE Ads & Keeps 5GE Icon

Christian

For a while now, AT&T has been misleadingly labeling some of its 4G services as “5GE.”

A self-regulatory body in the advertising industry recently concluded that AT&T should stop mentioning 5GE in advertisements:

A panel of the National Advertising Review Board (NARB) has recommended that AT&T Services, Inc. discontinue its ‘5G Evolution’ and ‘5G Evolution, The First Step to 5G’ claims…the NARB panel determined that both claims will mislead reasonable consumers into believing that AT&T is offering a 5G network and recommended that the claims be discontinued.

AT&T agreed to cease advertising 5GE, but the carrier will continue to show the 5GE icon on phones. As a result, AT&T has been receiving well-deserved scorn from journalists.

AT&T’s actions aren’t surprising. I don’t think the National Advertising Review Board has much power to change business practices outside of advertising. Further, AT&T has tricked some subscribers into thinking their 5GE connections are actual 5G connections. If AT&T stopped showing the 5GE icon, the carrier would have to deal with complaints from frustrated customers thinking they lost 5G access.

Boost’s “Super Reliable, Super Fast” Network

Christian

Boost Mobile is running a new commercial that features Pitbull and pitches the company’s low prices. Towards the end of the ad, a narrator says that Boost has a “super fast, super reliable network.” The narration is accompanied by this image:

In most commercials that involve carriers making claims about service quality, carriers will use fine print to cite research that backs up their claims. The Boost ad doesn’t include a citation; perhaps that’s because Boost’s claim doesn’t have much substance. “Super fast, super reliable” is super vague. Boost’s service probably is super fast compared to wireless service from 15 years ago. On the other hand, Boost’s service is not super fast compared to most services currently offered by other U.S. carriers.

Boost runs over Sprint’s network. There are a lot of different companies that evaluate network performance, and Sprint tends to do poorly relative to its competitors in the rigorous evaluations. Sprint had the lowest speeds among all four major networks in both RootMetrics’ and Opensignal’s most recent national assessments.

Boost’s claim looks even sillier in light of the fact that its subscribers tend to have low priority data access on Sprint’s network. When Sprint’s network is congested, Boost Mobile’s subscribers will tend to experience slower data speeds than those who subscribe directly to Sprint’s service.

A misleading image accompanies Boost’s misleading claims about quality. The image looks like a coverage map showing extensive coverage, but a disclaimer states: Coverage not available everywhere. Not a depiction of actual coverage.

Here’s the full commercial:

AT&T Paying $60,000,000 For “Unlimited Data” Claims

Christian

AT&T has settled with the Federal Trade Commission (FTC) and agreed to pay out $60 million to current and past customers that may have been affected by misleading claims about unlimited data. The settlement is in response to the FTC’s 2014 accustation that AT&T failed to adequately disclose that customers on unlimited data plans could have their speeds throttled substantially. Here are a few bits from the 2014 FTC complaint:

The FTC’s complaint alleges that the company failed to adequately disclose to its customers on unlimited data plans that, if they reach a certain amount of data use in a given billing cycle, AT&T reduces – or “throttles” – their data speeds to the point that many common mobile phone applications – like web browsing, GPS navigation and watching streaming video – become difficult or nearly impossible to use…AT&T’s marketing materials emphasized the ‘unlimited’ amount of data that would be available to consumers who signed up for its unlimited plans…AT&T, despite its unequivocal promises of unlimited data, began throttling data speeds in 2011 for its unlimited data plan customers after they used as little as 2 gigabytes of data in a billing period. According to the complaint, the throttling program has been severe, often resulting in speed reductions of 80 to 90 percent for affected users. Thus far, according to the FTC, AT&T has throttled at least 3.5 million unique customers a total of more than 25 million times…consumers in AT&T focus groups strongly objected to the idea of a throttling program and felt ‘unlimited should mean unlimited.’

Here’s an excerpt from the FTC’s press release from today (emphasis mine):

As part of the settlement, AT&T is prohibited from making any representation about the speed or amount of its mobile data, including that it is “unlimited,” without disclosing any material restrictions on the speed or amount of data. The disclosures need to be prominent, not buried in fine print or hidden behind hyperlinks. For example, if an AT&T website advertises a data plan as unlimited, but AT&T may slow speeds after consumers reach a certain data cap, AT&T must prominently and clearly disclose those restrictions.

I’m glad to see the FTC cracking down on misleading practices. Bogus “unlimited” plans seem to be much more common today than they were in 2014.

Altice’s Unlimited Plan Has Lots of Limits

Christian 37 Comments

Altice Mobile just launched with a tempting offer. Altice’s only plan, its “unlimited everything” plan, is only $30 per line each month.1 A lot of technology websites have been writing about the new offering, and most of them aren’t mentioning how many limits Altice places on its subscribers.

(Added 2/26/2020: Since this post came out, Altice Mobile’s price has changed to $40 per month for most people and $30 per month for Optimum and Suddenlink customers.)


Limits

In my previous post, I was critical of Total Wireless for marketing one of its plans as an “unlimited” plan, even though it involved a significant limitation:

Total Wireless is at least is transparent in letting customers know that limits exist despite the plan’s unlimited label. Altice Mobile doesn’t put a disclaimer or an asterisk next to its claims:

Altice’s press release is even more misleading:2

Altice Mobile offers one simple plan with unlimited everything:

  • unlimited data, text, and talk nationwide,
  • unlimited mobile hotspot,
  • unlimited video streaming,
  • unlimited international text and talk from the U.S. to more than 35 countries, including Canada, Mexico, Dominican Republic, Israel, most of Europe, and more, and
  • unlimited data, text and talk while traveling abroad in those same countries.

Potential customers wanting to understand Altice Mobile’s limitations need to find their way to a web page full of legalese titled Broadband Disclosure Information.3 As it turns out, Altice has lots of limitations:

  • Mobile hotspot is typically throttled to a maximum of 600Kbps (a fairly slow speed).4
  • Video is typically throttled to a maximum of 480p.5
  • After 50GB of use in a month, video traffic and hotspot traffic are throttled to 128Kbps.6
  • Roaming data is throttled to 128Kbps.7

As I discussed in my last post, it’s silly to call a service unlimited while throttling to sluggish speeds. The claim in the press release that Altice offers “unlimited video streaming” is particularly misleading. 128Kbps can’t even support stable streaming of low-resolution video.8 Turns out the claim of unlimited international data in 35 countries is also misleading. International data after the first gigabyte is throttled to 128Kbps.9

Despite the limitations, there’s a lot that’s exciting about Altice Mobile. The service has a competitive price. It might be a good option for people who live in the regions where it’s available.

I hope we’ll see Altice move towards being more transparent with consumers.

Pinocchio

Unlimited Plans At 2G Speeds Are Bogus

Christian 12 Comments

It’s becoming more common for carriers to offer additional data at 2G speeds after subscribers use up all of the regular-speed data that they’ve been allotted. In most cases, this means subscribers who’ve run out of regular data are throttled to a maximum speed of 128Kbps. It’s a great perk. Imagine you’ve run out of regular data, but really need to use the internet for a moment to pull up a boarding pass, look up directions, or view an email. At 2G speeds, it will probably be frustratingly slow to do any of those things, but that’s a much better scenario than being unable to use data at all.

Most consumers have little clue what 2G speeds amount to in practice. Let me be clear: 2G speeds are really slow for most things people want to do. Music streaming probably won’t work well. Video streaming at low, 240p resolution won’t be possible. Most websites will take a long time to load.

Carriers vary in how they present the perk of extra data at 2G speeds. In my opinion, Mint Mobile and Verizon handle the perk in a commendable way. Both carriers generally describe their plans and data allotments based on the amount of regular data allotted. In contrast, Total Wireless and Tello offer “unlimited” plans. These plans have caps on regular data use. After the cap is reached, subscribers continue to have data at 2G speeds. I think it’s misleading, bordering on outright lying, to call these unlimited plans. It’s just not possible to use data in a normal manner once speeds are throttled to 128Kbps.

In fact, imposing a throttle creates a limit on how much data can be used in a month. If a subscriber manages to transmit 128 kilobits of data every second for an entire month, they’ll use about 40GB of data.1 While almost no subscribers will come close to reaching it, there is a theoretical limit on these supposedly unlimited plans. It’s roughly: amount of regular data + 40GB.

Disclosure: I have financial relationships with Verizon, Mint Mobile, Tello, and Total Wireless (more details).

Markets Are Honest

Christian

I’ve been reading a ton of articles with commentators’ takes on whether a merger between Sprint and T-Mobile will be good or bad for consumers. Almost everything I’ve read has taken a strong position one way or the other. I don’t think I’ve seen a single article that expressed substantial uncertainty about whether a merger would be good or bad.

It could be that everyone is hugely biased on both sides of the argument. Or maybe the deal is so bad that only incredibly biased people would consider making an argument that the merger will be good for consumers. I’m not sure.

I like to look at how markets handle situations I’m uncertain about. In the last few years, I’ve regularly seen liberal politicians and liberal news agencies arguing that we’re about to see the end of Trump’s presidency because of some supposedly impeachable action that just came to light. I’m not Trump’s biggest fan, but I’ve found a lot of arguments about how he’s about to be impeached too far-fetched. I have a habit of going to the political betting market PredictIt when I see new arguments of this sort. PredictIt has markets on lots of topics, including whether or not Trump will be impeached.

Politicians and newspapers have an incentive to say things that will generate attention. A lot of the time, doing what gets attention is at odds with saying what’s true. People putting money in markets have incentives that are better aligned with truth.

Most of the time I’ve seen articles about Trump’s impending impeachment, political betting markets haven’t moved much. In rare occasions where markets moved significantly, I’ve had a good indication that something major actually happened.

Wall Street investors have a strong incentive to understand how the merger will actually affect network operators’ success. Unsurprisingly, T-Mobile’s stock increased substantially when key information indicating likely approval of a merger came out. Sprint’s stock also increased in value.

What’s much weirder is that neither Verizon’s stock nor AT&T’s stock seemed to take a negative hit on the days when important information about the merger’s likelihood came out. In fact, it actually looks like the stocks may have increased slightly in value.1

You could tell complicated stories to explain why a merger could be good for competing companies’ stock prices and also good for consumers. I think the simpler story is much more plausible: Wall Street is betting the merger will be bad for consumers.

Maybe none of this should be surprising. There were other honest signals earlier on in the approval process. As far as I can tell, neither Verizon nor AT&T seriously resisted the merger:2

Disclosure: At the time of writing, I have financial relationships with a bunch of telecommunications companies, including all of the major U.S. network operators except T-Mobile.

Consumer Reports’ Fundraising Gimmicks

Christian 68 Comments
You better cut the pizza in four pieces because I’m not hungry enough to eat six.Yogi Berra (allegedly)

The other day, I received a mailing from Consumer Reports. It was soliciting contributions for a raffle fundraiser. The mailing had nine raffle tickets in it. Consumer Reports was requesting that I send back the tickets with a suggested donation of $9 (one dollar for each ticket). The mailing had a lot of paper:

The raffle had a grand prize that would be the choice of an undisclosed, top-rated car or $35,000. There were a number of smaller prizes bringing the total amount up for grabs to about $50,000.

The materials included a lot of gimmicky text:

  • “If you’ve been issued the top winning raffle number, then 1 of those tickets is definitely the winner or a top-rated car — or $35,000 in cash.”
  • “Why risk throwing away what could be a huge pay day?”
  • “There’s a very real chance you could be the winner of our grand prize car!”

Consumer Reports also indicates that they’ll send a free, surprise gift to anyone who donates $10 or more. It feels funny to donate money hoping that I might win more than I donate, but I get it. Fundraising gimmicks work. That said, I get frustrated when fundraising gimmicks are dishonest.

One of the papers in the mailing came folded with print on each side. Here’s the front:

On the other side, I found a letter from someone involved in Consumer Reports’ marketing. The letter argues that it would be silly for me not to find out if I received winning tickets:

It amazes me that among the many people who receive our Consumer Reports Raffle Tickets — containing multiple tickets, mind you, not just one — some choose not to mail them in. And they do this, despite the fact there is no donation required for someone to find out if he or she has won…So when people don’t respond it doesn’t make any sense to me at all.

The multiple tickets bit is silly. It’s like the Yogi Berra line at the opening of the post; cutting a pizza into more slices doesn’t create more food. It doesn’t matter how many tickets I have unless I get more tickets than the typical person.

Come on. Consumer Reports doesn’t care if a non-donor decides not to turn in tickets. What’s the most plausible explanation for why Consumer Reports includes the orange letter? People who would otherwise ignore the mailing sometimes end up feeling guilty enough to make a donation. Checking the “I choose not to donate at this time, but please enter me in the Raffle” box on the envelope doesn’t feel great.

Writing my name on each ticket, reading the materials, and mailing the tickets takes time. My odds of winning are low. Stamps cost money.

Let’s give Consumer Reports the benefit of the doubt and pretend that the only reason not to participate is that stamps cost money. The appropriate stamp costs 55 cents at the moment.1 Is the expected reward for sending in the tickets greater than 55 cents?

Consumer Reports has about 6 million subscribers.2 Let’s continue to give Consumer Reports the benefit of the doubt and assume it can print everything, send mailings, handle the logistics of the raffle, and send gifts back to donors for only $0.50 per subscriber. That puts the promotion’s cost at about 3 million dollars. The $50,000 of prizes is trivial in comparison. Let’s further assume that Consumer Reports runs the promotion expecting that additional donations the promotion brings in will cover the promotion’s cost.

The suggested donation is $9. Let’s say the average, additional funding brought in by this campaign comes out to $10 per respondent.3 To break even, Consumer Reports needs to have 300,000 respondents.

With 300,000 respondents, nine tickets each, and $50,000 in prizes, the expected return is about 1.7 cents per ticket.4 Sixteen cents per person.5 Not even close to the cost of a stamp.

4/12/2019 Update: I received a second, almost-identical mailing in early April.

10/3/2019 Update: I received a few more of these mailings.

deceptive fish

I’m Not Unbiased

Christian

Warning: This post is a rant and contains foul language. Enjoy!

Tons of research suggests that people engage in deception and self-deception all the damn time. People are biased.

Despite this, pretty much every website offering reviews makes claims of objectivity and independence. These websites don’t claim that they try to minimize bias. They claim to actually be unbiased.

Let’s take a look at an excerpt from TopTenReviews, a high-traffic review site:

Methods of monetization in no way affect the rankings of the products, services or companies we review. Period.
Bullshit. Total bullshit.

I’ve ranted enough in the past about run-of-the-mill websites offering bogus evaluations. What about websites that have reasonably good reputations?

NerdWallet

NerdWallet publishes reviews and recommendations related to financial services.

Looking through NerdWallet’s website, I find this (emphasis mine):1

The guidance we offer, info we provide, and tools we create are objective, independent, and straightforward. So how do we make money? In some cases, we receive compensation when someone clicks to apply, or gets approved for a financial product through our site. However, this in no way affects our recommendations or advice. We’re on your side, even if it means we don’t make a cent.
Again, bullshit.

NerdWallet meets Vanguard

Stock brokerages are one of the types of services that NerdWallet evaluates.

One of the most orthodox pieces of financial advice—with widespread support from financial advisors, economists, and the like—is that typical individuals who invest in stocks shouldn’t actively pick and trade individual stocks.2 This position is often expressed with advice like: “Buy and hold low-cost index funds from Vanguard.”

Vanguard has optimized for keeping fees low and giving its clients a rate of return very close to the market’s rate of return.3 Since Vanguard keeps costs low, it cannot pay NerdWallet the kind of referral commissions that high-fee investment platforms offer.

What happens when NerdWallet evaluates brokers? Vanguard gets 3 out of 5 stars.4 It’s the worst rating for a broker I’ve seen on the site.5

NerdWallet slams Vanguard for not offering the sort of stuff Vanguard’s target audience doesn’t want. Vanguard gets the worst-possible ratings in the “Promotions” and “Trading platform” categories. Why? Vanguard doesn’t offer those things.6

Imagine someone going to a nice restaurant and complaining that the restaurant’s steak doesn’t come with cake frosting. NerdWallet is doing something similar.

The following excerpt comes from NerdWallet’s Vanguard review (emphasis mine):

Ask yourself this question: Are you part of Vanguard’s target audience of retirement investors with a relatively high account balance? If so, you’ll likely find no better home. You really can’t beat the company’s robust array of low-cost funds.

Investors who fall outside of that audience — those who can’t meet the fund minimums or want to regularly trade stocks — should look for a broker that better caters to those needs.

Vanguard’s minimum is $1,000.7 You shouldn’t buy stocks if you have less than $1,000 to put into stocks! If you invest in stocks, you shouldn’t regularly trade individual stocks!8

From my perspective, NerdWallet is saying that if you are (a) the typical kind of person that should be buying stocks and (b) you don’t use a stupid strategy, then “you really can’t beat [Vanguard].”

So there we have it. Despite the lousy review, NerdWallet correctly recognizes that Vanguard is awesome.

NerdWallet didn’t really lie, but NerdWallet is definitely biased.9

thumbs down

WireCutter

Sometimes evaluators aim to create divisions between editorial content (e.g., review writing) and revenue generation. I think divisions of this sort are a good idea, but they are not magic bullets.

WireCutter is one of my favorite review sites, but it makes the mistake of overemphasizing how much divisions can do to reduce bias:10

We pride ourselves on following rigorous journalistic standards and ethics, and we maintain editorial independence from our business operations. Our recommendations are always made entirely by our editorial team without input from our revenue team, and our writers and editors are never made aware of any business relationships.
I believe WireCutter takes actions to encourage editorial independence. However, I’m skeptical of how the commitment to editorial integrity is described. Absent extreme precautions, people talk. Information flows between coworkers. Even if editors aren’t explicitly informed about financial arrangements, it’s easy for editors to make educated guesses.11

Bias is sneaky

Running Coverage Critic, I face all sorts of decisions unrelated to accuracy or honesty where bias still has potential to creep in. For example, in what order should cell phone plans I recommend by displayed? Alphabetically? Randomly? One of those options will be more profitable than the other.

I don’t have perfect introspective access to what happens in my head. A minute ago, I scratched my nose. I can’t precisely explain exactly how or why I chose to do that. It just happened. Similarly, I don’t always know when and how biases affect my decisions.

I’m biased

I have conflicts of interest. Companies I recommend sometimes pay me commissions. You can take a look at the arrangements here.

I’ve tried to align my incentives with consumers by building my brand around commitments to transparency and rigor. I didn’t make these commitments for purely altruistic reasons. If the branding strategy succeeds, I stand to benefit.

Even with my branding strategy, my alignment with consumers will never be perfect. I’ll still be biased. If you ever think I could be doing better, please let me know.