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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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A rule-of-thumb for streaming data downloads to a smartphone, tablet or other 4G (i.e., 4th generation) device is: 1 gigabytes (GB) for standard definition (SD, i.e., 480p) video content requires about 1 hour; for HD (i.e., 1280p) content its about 2 GB per hour. (For more on 4G wireless, read  The Smart Phone Con Job: Your So-Called 4G Phone Isn't What It's Cracked Up To Be.)

So, let's say you want to watch a Hulu TV show or a Netflix movie on a tablet device like an iPad in HD. According to Janko Roettgers at Gigacom, an episode of "Weeds"  consists of about 800 megabytes (MB) and a movie like  Moulin Rouge would eat up about 3.5 GB of data.

For most TV viewers, the question is simple: can I get better programming and save money by shifting my TV viewing from a wireline, cablehookup to a wireless connection? 

Bruce Springsteen once famously observed about cable TV, “500 channels and nothing to watch.” So, why not just pay for (i.e., “subscribe” to) only what you want to watch? Sounds simple; the cable companies are fiercely fighting this proposition at the FCC and in Congress.

Video streaming of OTT programming allows viewers to pick and choose the shows they watch. Is this the future of TV, of media consumption? 

Video is famously acknowledged as a bandwidth hog. When we talk about video we are talking big files:  a simple email message measures 7 to 11 kb; a 2-hr movie is 3.5 GB. As more people shift the communications’ nexis of their lives from a fixed communications device (e.g., the telephone, radio, TV set, desktop computer and videogame player) to mobile device (e.g., smartphone, laptop, tablet, wireless computer and TV set), the world changes.

The telcos claim the problem of data demand lies with the consumer: to many consumers are digital gluttons, wanting too much steaming data. For the telcos, it’s a problem of capacity; in order to manage the spread between bandwidth “demand” and “supply,” they plan to impose a newusage and pricing model to maximize the financial return from their networks.

Yet these very same telcos created the problem, but take no responsibility for it. They built their businesses on one simple fiction:  they promised legislators, regulators and the public to build super-high networks offering unlimited performance.

So convinced were the government and the public that they willingly paid (through tax breaks, subsidies and inflated prices) to upgrade the nation’s private telecom infrastructure. The telecos guaranteed this tech capability by offering unlimited contracts -- and fattening their corporate bottomlines in the process. Unfortunately, they failed to deliver on their promise; the U.S. is a second-rate telecom nation.

No one, telco official, politician or regulator, will point the guilty finger for the (alleged) wireless capacity crisis at those who have orchestrated it, the wireless providers. The trust is attempting to impose this new program of media austerity through a policy of reguatory capture. 

Its most eggregious recent example involves former FCC commission er Meredith Attwell Baker, who, shortly after voting in favor of Comcast’s acquisition of NBC-Univeral, left to take a senior position at Comcast. (And, by the way, Chris Dodd, former senator (D-CT), now heads the film industry’s trade association, the MPAA; and Michael Powell, son of the famous general and former FCC chairman, heads cable industry’s trade association. Influence peddling?)

In order to halt the development of an alternative way to access media programming, the telco and cable operators are attempting to impose a new usage and cost model. Every time one hears scare stories about their telecom system being congested, facing scarce bandwidth or suffering over-capacity, one should get ready for changes in your service plan and new charges. A word to the wise.

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So, if you have an unlimited plan and are facing a wireless company’s throttling effort, what can you do? Very little. 

In a recent court decision, Matt Spaccarelli, of Simi Valley, CA lost a challenge to AT&T over throttling. The Supreme Court ruled in 2011, in  AT&T Mobility LLC v Concepcion, that AT&T, along with any other company, could block class-action suits arising from disputes with customers and instead force those customers into binding arbitration. So, all Spaccarelli could do was enter arbitration following his pyrrhic victory in small claims court and receive an $850 payment from AT&T.