New Bill Could Force Carriers To Better Define 4G Speeds

Though consumers may be excited about the idea of 4G networks that promise high speeds for wireless access, many of them might not know exactly what it is they're signing up for.

A new bill called The Next Generation Wireless Disclosure Act, introduced by Representative Anna Eshoo of California, seeks to make it easier for consumers to understand 4G plans before they sign up. The bill would establish a minimum guaranteed speed for data, and provide this information, as well as information about network reliability, coverage by area, pricing, the technology involved, and the conditions that could affect network service.

"Consumers deserve to know exactly what they're getting for their money when they sign-up for a 4G data plan," Eshoo said in a statement. "The wireless industry has invested billions to improve service coverage, reliability and data speeds, and consumers demand for 4G is expected to explode. But consumers need to know the truth about the speeds they're actually getting. My legislation is simple – it will establish guidelines for understanding what 4G speed really is, and ensure that consumers have all the information they need to make an informed decision."

The bill also includes a provision that would have the Federal Communications Commission (FCC) judge the speed and price of the 4G services offered by the top ten wireless carriers so that users can compare side by side. While carriers have been advertising their 4G networks by heralding the high speeds offered, in actuality, the four top carriers each use different technologies. Theoretical top speeds and actual speeds in real-world use can be vastly different.

"Today, more than ever, as mobile broadband providers employ Orwellian doublespeak advertising that tout 'unlimited plans' that are in fact not unlimited and market '4g' speeds in terms of 'lightning fast' and 'supercharged,' transparency rules that provide consumers with basic information regarding the actual price, minimum speed, and plain language terms of service are desperately needed," said Sascha Meinrath, director of the New America Foundation's Open Technology Initiative, in a press release.

According to the bill, wireless carriers made $160 billion in revenue in 2010, $50 billion of which came from wireless data. New reports show that consumer data use is growing greater and greater, as more people buy smartphones that require paying for a wireless plan: Average data usage has grown 89 percent in the past year.

Not everyone is thrilled about the bill. The Wireless Association warned against overregulating the industry.

"We are concerned that the bill proposes to add a new layer of regulation to a new and exciting set of services, while ignoring the fact that wireless is an inherently complex and dynamic environment in which network speeds can vary depending on a wide variety of factors," the group said on its blog.

The introduction of this legislation comes as AT&T is battling to win approval of its purchase of T-Mobile, a move that the company says will help it build out its 4G network with greater speed. They go up against rivals like Verizon and Sprint, as well as consumer advocates, who argue that such a move would reduce competition and ultimately hurt consumers.

"This bill might not have been necessary if there were enough competition in the wireless market, but there isn't," said Andrew Schwartzman, senior vice president and policy director for the Media Access Project, in a statement.