How Wireless Hype Is Hurting America

(This is the second post in a three-part series. See part one: Please, sir, may I have another?)

The AT&T ads proudly announce: "4G is up to 10 Times Faster than 3G."

Intrigued, I call the number in one of the ads, which is, of course, a badly designed string of endless prompts and no human being. With persistence, I finally get a customer service rep on the phone and I say: "Excuse me. Your ad says that 4G is 10 times faster than 3G. How fast is 3G?"

A bit stunned, the rep says: "That's a new one... please hold." When he comes back, he explains: "Well, because there are so many variations in speed, based on your phone and location, and other issues, we can't give you an exact speed for 3G."

I say: "Then how can you say that 4G is 10 times faster than 3G?"

I was going to ask for a supervisor but since I knew he was just reading off of a script I decided to write this article instead.

The sad truth is that 4G is more a new marketing campaign than an actual major change in technologies, though you wouldn't know it from all the hype.

And here's why this is a really big problem: If Americans believe the phone company hype -- and are seduced into believing that a slow and expensive wireless infrastructure is better than a fast wireline infrastructure -- the economic consequences could be grave.

And that's the direction we seem to be heading in. AT&T and Verizon have stopped expanding their high-speed U-verse and FiOS services into new areas, leaving at least 50 percent of the U.S. without a competitor to cable. In fact, Verizon is planning on purchasing wireless spectrum from the cable companies and cutting a marketing deal to sell their cable service alongside Verizon's wireless service.

Here's why AT&T and Verizon's decision to abandon further upgrades to America's critical wireline infrastructure is bad news:

1. Our broadband speeds and costs are already uncompetitive compared to those in many other countries.

Network World's recent chart on broadband speeds and offerings included these:

  • Hong Kong -- 300 Mbps in both directions for40.00 and that includes TV.
  • Romania -- 100 Mbps each way for20.00.
  • South Korea -- 100 Mbps in both directions for20.00 and that includes phone and TV.

By comparison, the FCC's last Internet speed report claimed that in the U.S.:

  • Only 48,000 homes have anything "at least 100 Mbps" in one direction.
  • Only 1.2 million homes have anything above 25 Mbps in one direction.

America is ranked 12th or 15th or 33rd depending on which group or metric is used and which research group you believe. And that's on the current wireline networks.

2. Wireless is even slower, very expensive, and can't replace cable wire.

The FCC's report on internet speeds for wireless was brutal. While the hype of "wireless broadband" has been spreading; the speeds do not match the hype.

  • 91 percent of the population had speeds of less than 6 Mbps in one direction.
  • 96 percent can't do an upstream speed of "at least 3 Mbps."

Want to watch a movie over the Internet with your wireless connection? It'll cost you.

Unlimited wireless plans are a thing of the past. Nowadays, AT&T will let you download 5GB of data per month for $50 a month, plus $10 for each additional GB. (Verizon's new wireless broadband service starts at 10GB for $60 per month, plus $10 for each addition GB.)

In 2011, Americans watched a whopping 33 hours of TV a week on average -- or about 132 hours a month. According to Netflix, at HD quality, its programming requires 1 to 2.3 Gbytes per hour.

So the $60 Verizon plan would only let you watch about 3 hours of HD movies a month.

And streaming 132 hours of HD TV on AT&T wireless would cost you in the vicinity of $1,320 to $3,036 per month.