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The Telecom Scammers' Latest Ploy to Screw You for More Cash

Fees, surcharges and taxes make wireless companies tons of money.

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Do you watch movies via a wireless connection on your laptop, tablet, smartphone or even TV set? If so, have you received a love letter from your service provider informing you to either go on a digital data diet or plan to pay more to suck down more streaming 1s and 0s? If not, it will arrive shortly.  

The leading wireless companies are changing the usage and pricing models they have long used, shifting the industry from one with “unlimited” plans to “limited” deals. 

These new limited plans tier data downloads to the ability to pay. AT&T, Verizon, T-Mobile and Virgin Mobile have either introduced or plan to introduce “data cap” or throttling programs on their 3G and 4G wireless users. Sprint remains the only leading provider offering an unlimited data plan that isn't subject to throttling.

When thinking about your latest wireless toy, it's important to remember two key facts. First, according to Europe’s Organization for Economic Co-operation and Development (OCED) the U.S. ranks first in total wireless users, with 200.2 million subscribers as of June 2011. However, it ranked ninth in terms of users per 100,000 people of a nation’s population, with 65.5 per 100/k – this compares to #1 Korea (96.3) and #2 Sweden (93.6).

Second, in the U.S., the datarate for wireless laptops and smartphones lags way behind U.S. wireline rates,  let alone speeds among the most advanced telecom countries. In March 2011, PC World found for laptop users the download rate ranged from Verizon’s 6.44 Megabytes per second(Mbps) to AT&T’s 2.48 Mbps to Sprint’s 2.15 Mbps; upload rates ranged from Sprints 0.61 Mbps to Verizon’s 5 Mbps.  

The performance of smartphones is even more anemic. Downstream T-Mobile topped out at 2.28 Mbps to AT&T’s 1.45 Mbps to Verizon’s 1.01 Mbps; in terms of upstream, don’t ask – Verizon was only 0.67 Mbps, AT&T was 0.97 Mbps and T-Mobile hit 0.95 Mbps. As a point of comparison,as of Q-3 2011, Akamai ranked the U.S. 13th globally in average (downstream) datarate speed of 5.8 Mbps. (Verizon’s high- performing FiOSservice hits 1 Gbps.)

In simplest terms: America’s wireless broadband service sucks! No wonder that throttling is a great scam, a get-rich scheme concocted by America’s telecom trust. 

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The Communications Trust is the network of big telecom, cable and media companies that have turned the U.S. into a second-tier telecom nation. Its reach recalls the great trusts of Carnegie and Rockefeller during the Robber Baron era of the late 19th century. Daily life in the 21st century is increasingly dependent on digital communications. Today’s trust is complicit in a shared effort to maximize short-term profits while sacrificing the nation’s communications future. Its effort recalls the tobocco trust that was finally broken up for RICO violations. 

One way to increase short-term profits is by throttling. For AT&T, Verizon and the other wireless providers, it involves two issues, one immediate, one long-term.  The most immediate is the new fee structure they are attempting to impose; wireless is cheaper to offer and more profitable to opperate then wireline services! 

The short-term incentive for new pricing is obvious. One can see the $$$ signs exploding in some corporate executive’s mind at the revenue opportunity these new data plans represent. 

AT&T faced significant customer discontent when it first announced its new pricing plan; it has about 17 million "unlimited" subscribers, most of whom use iPhones.  However, it plans to charge $10 per additional GB beyond its basic offering of 2 GB at $25 per month and $30 for 3GB;Verizon has tiers of $30 for 2 GB, $50 for 5 GB, and $80 for 10 GB per month.

The telcos are, therefore, shifting their respective business models away from heavy investments in wirelines – the optical fiber landline networks that are the backbone of America’s communications ne twork – to the cheaper and (due to deregulation) more profitable wireless businesses. AT&T and Verizon have stopped building out their most advanced wireline networks, U-verse and FiOS, respectively. This shift will only further erode the nation’s communications capabilites.

The 21st century is witnessing more and more people shifting their telecommunications life to mobile devices. As this happens, wireless spectrum is being turned into a scarce, precious commodity. To do so, the providers of digital data transport, the great middlemen, AT&T and Verizon, are buying up all available spectrum, thus acquiring greater control over  the flow of wireless data. In this process, they have become the digital spigots of social life, affecting much of communications, commerce, politics and intellectual experience.