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Verizon LTE: The Fine Line Between Truth and Deception

Verizon Wireless says you should "see how mobile entertainment was meant to be seen" in an "unparalleled streaming experience." As an informed smartphone user, do you feel deceived?

I have to admit that I almost fell off the family room couch when I saw the commercial and the claims being made. Perhaps it was an amplified reaction as I had discussed AT&T's gutsy decision to blackmail the U.S. government earlier that day, but I have to say that I am somewhat shocked by the claims wireless carriers can make these days without being held accountable. You have those questionable claims of T-Mobile stating that it has that nations fastest 4G network (while it doesn't claim that when you talk with them about the AT&T merger) on the one side and you have, on a more serious note, commercials that promise users that they can stream Netflix movies via their cellular broadband connection.

Don't get me wrong, I do not doubt that you can't stream Netflix movies over LTE. The problem I have is the fact Verizon killed its unlimited plan and now offers the most expensive, limited data plans in this country. You can get 75MB per month for $10, 2GB for $30, 5GB for $50 and 10GB for $80. While I personally believe that limited data plans and, at the very least, limited data plans at this price level are counter-productive and are a threat to innovation of mobile services, a commercial that says you should stream Netflix over LTE while being strangled by such a plan is, in fact, deceptive.

A typical Netflix SD movie can have a data volume of up to 700 MB while the HD versions climbs to up to 2 GB. There is no information how big mobile movies are, but we have heard claims of somewhere between 200 - 250 MB per hour or 400 - 500 MB per movie, which I consider reasonable estimates. So, if you buy that Revolution phone, accept the generous offer of 3 months free of Netflix streaming (which has less value than a one-month 2 GB data volume subscription) and follow the advice of the commercial and happily stream Netflix via LTE, you may be in for a surprise.

If we apply a conservative estimate of 400 MB per movie, then we know that Verizon's 2 GB plan is good for five movies per month. Of course you can't do anything else besides those movies - no emails, no messaging, no app usage, etc. Those five movies will cost you, in effect $6 each in data streaming alone. Every time you exceed your allowance, Verizon will generously extend your coverage in exchange of $10 per GB. And if we are honest, carriers really want you to exceed your allowance, as this is where the real profit trickles in. Of course, you could spring for the 5 GB plan or the 10 GB plan to give you up to 25 Netflix movies (and nothing else) for just $80 per month. Business travelers may actually like this option, even if a Wi-Fi streamed Netflix movie on a notebook appears to be the far more reasonable solution when you are stuck in a hotel room far away from home. But let's be serious: $80 for wireless data? Are these the same companies that are telling us that data services are getting cheaper?

The bottom line is that Netflix streaming via LTE (or even a 3G service) is technically possible, but the entire concept isn't practical with the current trend of data plan offerings. No informed and sane user (provided that user has to cover his own bill and is on a budget) would even dare to begin streaming Netflix movies over a broadband service given the implied range anxiety caused by limited data plans. I find it interesting that we are seeing more and more capable data phones, while carriers do everything they can to suffocate data services: we are not just talking about Netflix here, of course, we are talking about virtually any data-intensive app that will run you against a bandwidth wall. Imagine what video calling, which we have been promised to receive for decades, will do to your data plan and budget. The technology is there, it's just not permitted because carriers will first have to educate us that there is significant value in the bandwidth to deliver such services and we ought to pay extra for that.

Of course, the bandwidth matter is much more complicated and I understand that there are limits and wireless service can't be a free for all. (I have my doubts, however, if that limit is really as severe as AT&T claims, as AT&T now says that all the bandwidth its users want is actually available, but only if its customers join a tiered data plan and pay extra.) The problem I have with Verizon is that the switch from unlimited to a tiered data plan is combined with claims that LTE customers can be streaming Netflix via LTE and don't have to rely on Wi-Fi - which is a dangerous statement given the data plan limitation. Factually, Verizon isn't making a false statement, but ethically, it is questionable at best - and utterly deceptive in my personal opinion.

Just an idea: more competition, not less, could help to solve the entire bandwidth problem.