Unlimited Plans: A Race To The Bottom?

In the last few years, many cell phone carriers have released “unlimited” plans that actually have limits. Most of these plans are sufficient for the average person. Problems show up for a minority of cell phone users that are especially heavy data users.

Many people read my posts explaining the limits carriers place on their “unlimited” plans and react with a version of:

Ok, fine Chris. Sure these plans aren’t technically unlimited. But you’re being pedantic as hell. These plans are as-good-as-unlimited for 98% of people.

My pushback on “unlimited” plans isn’t about protecting heavy data users. In the long run, I’m worried that “unlimited” plans are part of a trend that will be harmful to a much larger group of people: light and moderate data users.

Huh?

This has happened before

For more than a decade, I’ve been following the portion of the web hosting industry that caters to personal websites and small-business websites. When I first started watching the industry, almost every web host offered a fixed number of gigabytes of bandwidth each month. Customers that wanted more bandwidth had to pay more. At some point, a few web hosts began offering “unlimited” bandwidth plans.

Of course, no web hosts actually offered unlimited bandwidth. Hosts put restrictions in their terms of service agreements that made it possible to shut down websites that hogged server resources. If Google had tried to host its infrastructure on a $10 per month “unlimited” plan, it would have been shut down instantly.1

Even though most websites are tiny and have modest resource demands, people running tiny websites tend to like the idea of having an unlimited plan. Since the internet has way more tiny websites than medium-sized websites, web hosts could allow some unprofitable, medium-sized clients to stick around. The hosting bills for tiny websites essentially subsidized some more popular websites.

Over a few years, it became clear that offering “unlimited” plans was a winning business strategy. Gradually, unlimited plans became the industry standard. Fixed-bandwidth plans faded away.2

Back to cellular

Fixed-data cell phone plans are fading in the U.S. market. Take a look at the websites of any of the Big 3 networks. Which plans do you see? Unlimited plans get the attention. Fixed-data plans still exist, but they’re buried.

It didn’t used to be this way. The move towards unlimited plans has been rapid and will probably continue until unlimited plans dominate the market. Unless regulatory bodies step in, I see only two ways this can play out in the long run. Both scenarios seem bad:

  • Unlimited plans without many restrictions become standard. Light data users essentially subsidize heavy data users.
  • “Unlimited” plans with significant restrictions become standard. We get a race to the bottom.

Racing to the bottom

When fixed-data plans dominated the market, customers were aware of the limitations they were likely to run into. Hell, plans were their limitations. A 5GB plan might have been named “The 5GB Plan”.

As unlimited plans have risen, limitations have been hidden from customers and tucked away in the fine print of legal documents. Plan names turned meaningless: “T-Mobile Magenta” and “Verizon Above Unlimited.”

Carriers place limits on their “unlimited” plans so they can compete on costs. Have you noticed the policies below on the rise?

  • Video throttling
  • Hotspot data throttled to slower speeds than regular data
  • Monthly hotspot allotments that have no relation to overall data allotments
  • Data transfer that’s restricted to sluggish speeds after subscribers use a certain amount of data

For network operators, it’s not important whether a gigabyte of data is used streaming video, loading web pages, or running a hotspot.3 All these policies have the same purpose: reducing subscribers’ data use.

Low-priority data is another common limitation thrown on plans. Subscribers with low-priority data will experience normal speeds when a network isn’t congested, but their speeds will turn sluggish when things get busy.

Limits aren’t the problem

I’m not broadly against limits. I’m against limits that confuse consumers. I’m against limits that aren’t explained clearly and prominently.

Unfortunately, unlimited plans attract the kinds of limits I oppose. At some level, it makes sense, at least from a business perspective. If a carrier downplays how serious the limits are on one of its plans, the plan will be more appealing to consumers.

Carriers throttling heavy data users to 128Kbps don’t make candid disclosures. Imagine what that would look like:

After 35GB per month of data use, download speeds will decrease to frustratingly slow speeds (around 128Kbps). You probably won’t want to use the internet at these speeds unless you really need to. But if you have to load a boarding pass or an email after you’re out of regular data, you should be able to with a bit of patience!

No. We get vague disclosures like:

Data speeds reduce after 35GB but data is unlimited.4

Plans with low-priority data will have fine print mentioning reduced speeds during congestion, but details will be sparse. Customers trying to figure out how common congestion is, where congestion tends to occur, or how much speeds are slowed aren’t going to find the information they’re looking for.

Hell, it’s not just regular consumers that get confused and misled. My favorite tech review site can’t sort out prioritization policies. Here’s a bit from Wirecutter:

A T-Mobile spokesperson confirmed that policy, saying that although postpaid and prepaid T-Mobile service have the same priority, Metro by T-Mobile and other resellers ‘may notice slower speeds in times of network congestion’…However, AT&T and Verizon told us that they don’t impose any such prioritization.

Perhaps the scariest part of the excerpt is not that Wirecutter is wrong, but that people speaking for AT&T and Verizon were wrong about their own companies’ policies.

Where will we end up?

If nothing changes, we’ll continue to see the low-cost side of the market (a) throw more limitations on plans and (b) bury limitations deeper. In my view, the problem isn’t evil carriers. It’s bad incentives. Maybe the FCC or the NAD (National Advertising Division) will jump in and change carriers’ incentives. I’m not too optimistic, though.

PCMag Releases 2020 Cellular Performance Report

PCMag just released its 2020 report on the performance of cellular networks.

  • Verizon took the top spot for overall performance.
  • AT&T came in a close second.
  • T-Mobile came in third place but led in 5G availability.

Differences from previous years’ tests

Due to logistical issues from the pandemic, PCMag altered its methodology:

Traditionally, we’d tour each city and then test rural areas between cities before moving on to the next one. But that involves flights, rental cars, and hotels, none of which we felt safe using this year. So we hired roughly two dozen drivers to each test their own cities, in their own cars, sleeping in their own beds, shipping the testing kits from place to place. The result is a nationwide, COVID-safe test, but without the rural data we usually provide.

PCMag also started placing more emphasis on 5G connections. I’m a big fan of how PCMag handled 5G performance in its scoring (emphasis mine):

We had separate sets of 4G and 5G phones running tests offset by 60 seconds from each other…We ended up choosing the best result from each of the two devices on the same network, no matter what G they were on…What people really want is a consistent broadband experience—they don’t care what the icon on their phone says.

Reservations

Most of my reservations last year still stand. Notably:

  • PCMag focuses on performance within cities, while the largest differences between networks’ performance tend to show up in less-populated areas.
  • Average speed metrics get more weight than I think is reasonable.
  • Scores on different metrics get aggregated in a problematic way.

Highlights

While my reservations are serious, they’re not relevant to the granular, city-specific results. If you live in a large metro area, PCMag’s scorecard for your city could be handy.

The 5G-availability data is interesting. Here’s each network’s overall score for 5G availability:

  • T-Mobile: 54%
  • AT&T: 38%
  • Verizon: 4%

I’m surprised how close AT&T came to T-Mobile. While Verizon’s 4% availability score isn’t impressive, it’s higher than I anticipated. Verizon has been getting berated for the horrible availability of its exclusively millimeter wave 5G. Since Verizon hasn’t rolled out any 5G in some cities, the overall result masks heterogeneity between cities. E.g., PCMag found 9% 5G availability for Verizon in Chicago.

There’s No Escaping Bad Customer Experiences

Even cellular industry insiders can’t order phones and service without trouble. Prakash Sangam, an industry analyst, shared this tweet last month:

I’ve been thinking about the tweet a lot. In the last few months, I’ve opened accounts with all three of the major networks. Two of my ordering experiences were quite bad.

I’ll run through my experiences with each network. Go ahead and skip to the second half of the post if reading about my experiences doesn’t sound interesting.

Order 1: T-Mobile

I ordered a new line of service and an iPhone SE from T-Mobile. Everything went as expected. T-Mobile was the clear winner in terms of the customer experience.

Order 2: AT&T

I tried to order service from AT&T’s website while making use of AT&T’s bring-your-own-device (BYOD) program. AT&T was running an online-only promotion for BYOD lines that involved a waived activation fee and a $250 visa gift card for new subscribers.

A canceled order

A day after placing my order, I got an email from AT&T explaining that the company canceled my order. Here’s an excerpt:

We couldn’t verify this order [redacted] really came from you. For your security, we canceled it. Don’t worry. If there was a hold on your card, we’ll release the funds. Let us help you reorder your item(s). Visit an AT&T store. Be sure to bring your identification.

I have no idea why AT&T outright canceled the order. It would have been more convenient if AT&T paused the order until I could verify my identity.

Attempted phone resolution

I called AT&T to see if I could resolve the issue without going into a store. The agent I spoke with encouraged me to restart the order over the phone. I was worried that ordering by phone would make me ineligible for the online-only promotions. The agent told me she could add on the promotions at the end of the ordering process. I was skeptical, but I proceeded.

The reordering process was aggravating. I had to slowly re-share all of the information I had previously sent through AT&T’s website. After over an hour on the phone, the line dropped before I finished my order. AT&T didn’t call me back.

Going in a store

After two failures, I gave up and went into an AT&T store. I was worried placing an order in a store would make me ineligible for the promotions I wanted to take advantage of.

The AT&T sales representative I met with told me that the store could waive my activation fee and match the $250 visa card promotion with a bill credit of the same size. After sitting at the AT&T store for a bit while the AT&T representative consulted his colleagues, I was informed that the store actually couldn’t match the $250 promotion. I decided to cut my losses and pulled the trigger on service anyway.

A long-running problem

AT&T’s support forum is full of people frustrated with the same issue. Worse yet, complaints about this problem with promotion eligibility have been showing up for more than two years. In that time, AT&T hasn’t done a damn thing to solve the problem.

Order 3: Verizon

Along with a new line of service, I ordered a Galaxy S20 UW and a smartwatch from Verizon. The customer experience sucked.

Trade-in fiasco

When I placed my order, I decided to trade in an iPhone 6. While Verizon typically valued an iPhone 6 trade-in at $12, Verizon was running a promotion where customers who upgraded to the S20 5G UW could get a $350 credit for an iPhone 6. Based on the terms on Verizon’s website, it wasn’t clear whether I’d be eligible for the promotion as a new customer. Here’s a screenshot of the terms:

Trade in terms for $350 credit

When I checked the value of my iPhone 6 on Verizon’s website, I was offered $200 for it. I couldn’t quite figure out what was going on. I ultimately assumed I was ineligible for the $350 credit but eligible for some other promotion.

During the checkout process, Verizon’s website continued to suggest I’d get a $200 credit. Once the phone was actually inspected, Verizon revised its value down to $12. Here’s a screenshot from the email I received:

Trade in adjustment email

I don’t know why Verizon wrote, “Better qualifying promotion found.” Looking at my Verizon bills, I don’t see any credits that would correspond to either a $200 or a $350 credit.1

Contacting support

I reached out to Verizon’s support to figure out what happened with my trade-in. It didn’t go well.

The agent I talked to through Verizon’s chat-based support initially agreed that something went wrong:

The agent ran into trouble trying to make adjustments:

The agent later told me that I wasn’t eligible for the bill credit since the promotion started after I submitted my trade-in:

A promotion for a $350 bill credit was running in June. My earlier screenshot was taken at that time. I don’t know why the agent suggested otherwise.

Per the advice of the original agent, I switched over to contacting Verizon’s trade-in department by phone. After a few unsuccessful hours with Verizon’s support, I cut my losses and gave up.

Wrong phone specs

The S20 5G UW I ordered arrived with different specs than Samsung initially advertised. I previously wrote a whole post dedicated to the issue.


Why the hell are customers’ experiences so bad?

I’ve described the cell phone industry as a “confusopoly.” Scott Adams coined the term and defined a confusopoly as:

A group of companies with similar products who intentionally confuse customers instead of competing on price.

In my recent orders, I came out several hundred dollars behind my expectations. If Verizon and AT&T had user-friendly ordering systems and less confusing policies, that wouldn’t have happened. Still, I don’t think the confusopoly concept fully explains my bad experiences.

By canceling my online order, AT&T made me ineligible for its gift card promotion. There’s a sense in which that saved AT&T a few hundred bucks. On the other hand, I don’t think AT&T intentionally screwed me. New customers are worth a lot to AT&T. Each time AT&T cancels an online order, there’s a chance that they’ll entirely lose a customer. Many people won’t bother coming into a store after a canceled order.

I’m left scratching my head. In most industries where new customers are valuable, a lot of effort goes into making customer experiences positive. What’s going on in the cellular industry?

T-Mobile To Offer A Cheap 5G Phone – REVVL 5G

T-Mobile just announced that it will soon offer the REVVL 5G for a regular price of $400. Eligible customers can get the phone for a discounted price of $200.

I believe the REVVL 5G will be the cheapest 5G phone available in the U.S. when it launches on September 4. T-Mobile and T-Mobile’s flanker brand, Metro, will both stock the device.

REVVL 5G details

The REVVL 5G is essentially a rebranded and slightly altered version of the TCL 10 5G, a phone that received some solid reviews.1 The REVVL 5G will have a Snapdragon 765 processor and compatibility with the following bands:

LTE:

  • B2
  • B4
  • B25
  • B26
  • B41
  • B66

5G:

  • n2
  • n25
  • n66
  • n71

Notably, the REVVL 5G will not be compatible with the frequencies used for millimeter wave 5G.

Promotion eligibility

While the regular price of the REVVL 5G is $400 (or $16.67 per month for 24 months), eligible customers can effectively get the device for $200. Here’s an excerpt from today’s press release:

New and existing T-Mobile customers — including T-Mobile for Business customers up to 12 lines — can get REVVL 4 and REVVL 4+ for FREE or the REVVL 5G for just $200 after 24 bill credits when they switch or add a line.

My take

I’m glad to see a cheaper 5G phone hitting the market. I don’t think consumers need to rush out and buy the device in mass, though. We’ll see more budget-friendly devices arriving on the market over the next few years. Hopefully, it won’t be long before we see a low-price device compatible with both sub-6 5G and millimeter wave 5G.

Cutting Through Bullshit Around 5G Latency

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.

Ting’s Subscriber Base Acquired by DISH

News came out today that most of Ting’s assets, including Ting’s mobile customers, have been acquired by DISH:1

Effective August 1, 2020, most Ting Mobile customers across the U.S. became customers of DISH. These customers will continue to use their current phones and will enjoy the same rates and excellent customer experience. As with DISH’s recently acquired Boost customers, these Ting Mobile customers will have access to the new T-Mobile network.

Tucows, Ting’s original parent company, will retain ownership of Ting’s technology stack. Tucows plans to offer Mobile Service Enabler (MSE) solutions to help wireless carriers run their businesses. Here’s a bit of information I received from Tucows’ PR team:

Now, as a Mobile Services Enabler (MSE), Tucows is opening up its mobile platform and the foundation on which the MVNO Ting Mobile was built. The same platform that helped Ting Mobile create some of the happiest mobile customers and top Consumer Reports lists year over year. DISH is becoming Tucows’ first MSE customer—starting with Ting Mobile, and adding Boost Mobile’s estimated 9 million customers in the 2nd half of 2021.

The Verizon Network

So far, I haven’t seen Ting directly address the plans for the carrier’s Verizon-based service. An email from Ting’s PR team said there would be “no data migration, service interruption or billing changes.”

I expect customers on Ting’s Verizon-based service will not be forced to migrate immediately. I’m not sure what will happen in the long term.

Rethinking “Nationwide”

T-Mobile and AT&T started describing their 5G networks as nationwide once the networks covered over 200 million people. I’ve seen multiple people suggest that this is related to FCC rules. Allegedly, the FCC only allows networks to be described as nationwide when they cover over 200 million people. I’ve searched around, and I can’t find any FCC documents mentioning such a guideline.

As far as I can tell, the 200 million number comes from the National Advertising Division (NAD), a self-regulatory body for the advertising industry.1 Here’s an excerpt from a 2014 NAD publication:

NAD noted in its decision that it has applied a consistent standard for ‘coast to coast’ service for the past 10 years. In general, a wireless network can claim to be nationwide or coast to coast if the provider offers service in diverse regions of the country and the network covers at least 200 million people.

200 million people would make up about 60% of the U.S. population.2 I don’t think a network covering 60% of the U.S. population is nationwide in the common-sense meaning of the word. If networks with such lackluster coverage are advertised as nationwide, consumers will be misled.

The NAD should update its approach. The exact meaning of nationwide isn’t clear cut, but I think even a loose standard should be something like this:

Nationwide network: A network that covers at least 85% of the U.S. population and offers service in some parts of every state.

The NAD should probably frame its standard in terms of a percentage of the U.S. population covered (rather than a raw number of people covered). In 2004, 200 million people would have been almost 70% of the U.S. population.3 The NAD’s standard made more sense then. As the country’s population has grown, the NAD’s standard has become weaker.

T-Mobile’s Misleading Claims About Its Four Unlimited Lines For $100 Deal

Yesterday, T-Mobile shared a press release announcing deals the company is about to launch. Starting July 24, T-Mobile will offer four lines on its Essentials plan for $25 per line each month. The Essentials plan is the most basic of T-Mobile’s postpaid unlimited plans.

Customers making use of T-Mobile’s deal on the Essentials plan will have the option to take advantage of a second promotion on the Samsung Galaxy A71 5G:1

If you need 5G phones too, for just $5 more per line, get four lines for $30 each per month, plus taxes and fees with autopay on T-Mobile Essentials PLUS four Samsung Galaxy A71 5G included with bill credits and eligible trade-in.

Bragging

At the beginning of its press release, T-Mobile brags about how unbelievable the upcoming deal will be:

Four lines for just $25/month each, an unheard of price point for unlimited postpaid.

T-Mobile brags again a bit later:

This price point with unlimited data has not been offered for everyone in postpaid wireless in, well, ever.

And then again:

This price point for unlimited postpaid is unheard of. As in, unlimited high speed data at this price has never been offered before for everyone in postpaid wireless in the history of ever.

Despite T-Mobile’s claims, this isn’t the first time we’ve seen postpaid unlimited plans at this price point. Sprint previously offered its Unlimited Kickstart plan for $25 per line.

Note how the caveat word “postpaid” shows up in each of T-Mobile’s boasts. Prepaid brands Visible and Cricket offer four lines for $100. Other prepaid carriers have offered similar deals in the past. Unlike T-Mobile, both Visible and Cricket include taxes in the $100 list price of their four-line plans.

No high-priority data

Postpaid plans tend to have features that prepaid plans do not. Notably, postpaid service is likely to come with high-priority data during congestion. While T-Mobile’s Essentials plan is postpaid, it does not include high-priority data.

T-Mobile’s statements are a bit disingenuous. It’s strange for the company to brag about how the upcoming deal will involve postpaid service while neglecting to mention that a major feature people associate with postpaid service is missing.

Confusing Names For LG’s New Budget Phone

LG recently launched a budget-friendly phone that several carriers are offering.

Aristo 5

The picture above comes from LG’s web page for the Aristo 5. However, LG is offering phones with nearly identical aesthetics and specs under at least six different names. The name varies depending on the carrier offering the phone.

I’ve seen similar phones launched under multiple brand names before, but I think LG’s new device sets a record for the number of names.

AT&T Prepaid Adds 6 Month Option To Its 8GB Plan

In one of my recent posts, I discussed the awesome deals AT&T is offering on its prepaid plan with unlimited minutes, unlimited texts, and 8GB of data each month. At the time I wrote the post, AT&T offered the plan with three different price structures:

  • Month-to-month payments ($40 per month)1
  • Three months purchased upfront ($33 per month or $180 total)
  • One year purchased upfront ($25 per month or $300 total)

Now, AT&T has added another option. Customers that purchase six months of service upfront can get the 8GB plan for $30 per month.

Before AT&T added the six-month option, I was comparing AT&T’s plan to Mint Mobile’s 8GB plan. The plans look even more similar now that both carriers offer 3, 6, and 12-month payments options.