🚗 🚙 Turn your trusty old car into trustworthy journalism Learn more

Are you getting throttled into paying more for your wireless coverage?

Molly Wood Feb 27, 2012

Are you getting throttled into paying more for your wireless coverage?

Molly Wood Feb 27, 2012

OK, sometimes we have easy topics to cover on our show but sometimes the story is kind of complicated. Today is one of those complicated days (frankly, we have WAY more complicated days than easy ones because we cover technology). But it’s important because it affects how much you are paying on your monthly wireless bill.

If you go in to a Verizon, AT&T or T-Mobile store today and try to sign up for a brand new agreement, you will have to pick a tier of service based on how much data you expect to use per month. The rates vary. However, if you have been with one of those companies for a while, you may still be on an unlimited data plan where there is no cap to how much data you’re allowed to use. And then you can be grandfathered in so that you can still be on that plan.

The mobile intelligence company Validas recently looked into what kind of speeds people are getting on all these plans, specifically customers who use a lot of data. “So we took a look at the data usage of those top 5 percent for both tiered and unlimited plans on Verizon and AT&T,” says Dylan Breslin-Barnhart of Validas, “and interestingly what we found is for, especially for Verizon it was most remarkable that, ultimately, it doesn’t matter if you’re on tiered or unlimited, if you’re in the top 5 percent bracket, you’re using about the same amount of data. “

But your experiences could be pretty different. Validas found that customers on the unlimited plans were getting throttled, their data was moving slower than customers using the same amount of data on tiered plans. The tiered customers were enjoying a streaming episode of “Mad Men,” everything’s great. The unlimited customers were getting buffering messages, hiccups, delays, they had no idea what Don Draper was up to.

Why are the wireless carriers doing such a thing? “The argument that they’re making is that the people on unlimited plans are data hogs,” says Mike Masnick, editor of Techdirt, “and are using way too much data and are causing congestion for everyone else.”

But why is the network slow for some customers and not others? Masnick thinks the networks don’t want customers on unlimited plans at lower rates, they want everyone to be tiered. “Well, it appears that they have plenty of bandwidth,” he says, “and what they’re really trying to do is push you into paying more money for the same thing.”

Things might not work out that way, however. Think about it: if you know you have unlimited data, you might go ahead and live it up, watch movies on your phone, stream music, really make the most of it. If the data slows down, you probably won’t think, “I’ll move to a tiered system.” You’ll think, “I’ve got a lousy network and I’m going to switch to a whole other company the next chance I get.”

Masnick says a lot of people end up thinking that way and that’s a risk that the carriers are running right now. “If you are setting up these tiers, or charging more or throttling the network,” he says, “what you’re really doing is making that network less valuable to me and to others.”

Also in this program, another edition of According to a Recent Study. Good news, gamers: researchers say video games make you smarter! Provided you’re playing World of Warcraft and you’re an elderly person who didn’t do well on a cognitive test. But still: video games make you smarter!

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.