Here is why data caps are absurd but carriers still use them

Here is why data caps are absurd but carriers still use them
The United States leads the world in 4G LTE adoption and while customers on Verizon, AT&T and Sprint (and soon T-Mobile) are enjoying the benefits of ultra-fast speeds on their mobile devices, they are also not getting much out of it.

While in earlier days truly unlimited data plans were common, nowadays the major carriers (except for Sprint) have all gotten rid of that option in favor of tiered data plans. So while you do have those huge speeds, you simply don’t have the allowance to use them fully.

Carriers say those data caps are necessary and instituted to prevent data hogs from congesting the network. Interestingly enough, that explanation is simply not true. In reality, a TCP/IP connection fairly distributes data so that it is not the size of the data used, but the number of users that affects speeds.

The reality of the situation also seems to be much simpler - data caps are effectively a money-making machine for carriers who get more money from overage fees. And it’s all explained concisely and clearly, take a look right below.

source: Brian Boyko via Android Central



1. BattleBrat

Posts: 1476; Member since: Oct 26, 2011

I have noticed that if I go over 1gb on Verizon and am late with a payment ( I have unlimited data), They will call me, they will text me, they will leave dead cats on my lawn, send me pictures of me sleeping, essentially go into total nazi mode. If I stay under 1gb, I can be 10 days late no calls no texts, no late fees WTF?

15. quickweevil

Posts: 51; Member since: Dec 21, 2011

"Where's my money, man?!" - Stewie Griffin

20. JC557

Posts: 1926; Member since: Dec 07, 2011

F* you, pay me.

23. torr310

Posts: 1724; Member since: Oct 27, 2011

I am also on VZW with unlimited data. But what I noticed is that the way they calculated the amount of data used seems more than what I actually used.

2. cameogt

Posts: 88; Member since: Oct 18, 2012

filthy carriers.

3. faisolbauuz

Posts: 121; Member since: Jan 05, 2013

Well yeah data caps is a crap thing you cant use the fast speed to download big files such a waste,and i must set the mobile data limit on my phone everytime too

4. Sprissy

Posts: 193; Member since: Feb 11, 2012

They make big money on those data about rollover. ..if we have to pay for our data then let what we don't use roll into the next month.

12. TIrrodan92

Posts: 14; Member since: Dec 24, 2012

that is a good Idea!

21. JC557

Posts: 1926; Member since: Dec 07, 2011

If Cingular were still around they'd most likely have that along with roll-over minutes.

5. alouden unregistered

This article is not tellig me anything I didn't already know. The companies weren't concerned with "excess data useage" per se. They were concerned that they were not profiting more from the trend in increased data usage. The answer was to rid themselves of unlimited plans. But there is also something else at play. These companies are FORCING us to use more data while 1) charging more for it and 2) implementing unreasonable caps. If you use a lot of memory on your phone (God forbid you like to take pictures, play music, movies, etc), the carriers are now pushing on line storage. Of course that is begging you to exceed your data cap. More money for them. The perfect example of this is the Droid DNA. The only meaningful difference between this phone and the J Butterfly is the presence of the SD reader in the J butterfly. As much as the DNA seems like a very good phone otherwise and as much as I love HTC in general, I think this is a most cynical release from Verizon. (in the interest of full disclosure, I rarely exceed 1 GB data per month so I am not a data hog).

6. DonShock

Posts: 19; Member since: Jan 06, 2012

This video makes the case for the ISPs, even though it draws the wrong conclusion. It rightly explains that Congestion = Slower Speeds. But then concludes that the logical answer is to discourage new users of get people to just live with slow speeds. Utilities can't work that way and keep customers. All utilities, internet included, have to be built to accommodate the peak demand with a certain margin built in. If the utility ignores the periods of heavy congestion, their customers will flee because the slow speeds occur exacly when they want access the most. So the utility needs to overbuild for the "normal" demand so that service is not disrupted during "peak" demand. High data users make the peaks in damand that much higher, since their high demands typically occur at the same time the typical users are increasing their demand. And they also lead to congestion occuring sooner than if everybody was only typical users. And the utility has no choice but to build a system capable of handling the full demand, regardless of where it comes from. Data caps are a reasonable way of distributing the costs of the entire systemwhich has to be larger to accomodate high data users, in proportion to their contribution to the overall demand. Monthly caps serve to "even out" the small fluctuations in an individual user's demand so that a typical user doing a large single high data transaction, like an OS install and upgrade, isn't likely to hit a cap. It's only the continuous high-data consumer who is likely to hit the cap. And it's only reasonable that they pay a proportional share for the bigger system their use requires.

29. miles16852

Posts: 241; Member since: Oct 20, 2011

your thinking is very primative... and profit oriented.

7. -box-

Posts: 3991; Member since: Jan 04, 2012

Yikes, is this a sprint ad, victor? T-Mobile also offers unlimited (along with tiered, which is good for its less-spendy customers). That said, data and minutes are a consumable product, like gasoline, utilities, food, etc. Those who use more should pay for more. I wouldn't want to pay for someone else's electric bill, so why would I want to pay for their data with overpriced "unlimited"? Once LTE-Advanced hits and we see individual consumption of over 10GB monthly probable (rather than the current rarity) and faster speeds than what is commonly available to consumer landline internet services, I imagine data caps may become less necessary, and perhaps, like landline internet, customers will pay for speed access rather than quantity.

8. troutsy

Posts: 383; Member since: Feb 17, 2012

What a waste of time... he blathers about nothing related to data caps and then stumbles on a conclusion that everyone already knows. It's basic math: User with unlimited download cap using 60GB per month @ 5Mbps = 27 Hours of usage per month = Cell phone requesting data 4% of the time. User with 4GB limit @ 5Mbps = 2 Hours of usage = Cell phone requesting data 0.2% of the time. So for 10,000 users attached to a cell tower, under unlimited 379 are sharing a connection while only 25 users would be using under a capped scenario... Less congestion! The excuse works, it's the execution that is a failure--Data hogs are smart people that know enough to cling to unlimited data plans. Lower costs and upselling people that were never part of the problem is where the ridiculous profits come in.

11. dakalter

Posts: 5; Member since: Jan 09, 2013

This is exactly what I was thinking but you put it into numbers for me. Also I wonder if there are any limitations coming from the cell towers in terms of amount being downloaded at once. Kinda like a Wireless modem in the home being hogged by someone torrenting.

9. MSchroeder

Posts: 2; Member since: Sep 27, 2012

Did anyone really watch this video? The article is about 4G and wireless service, but the video is 99% about landline broadband internet, NOT wireless internet. What deception from Phonearena to put a VZW 4G pic for the article, and then, write about wireless internet in the article. People should not comment about wireless carries without watching the video. WOW...

10. tomn1ce

Posts: 248; Member since: Mar 12, 2012

What else is new...who doesn't know that these tiered data plans that have been implemented by the carriers weren't thought of to make them more money...doesn't tmobile offer unlimited data plan as well?...

13. gravityron

Posts: 46; Member since: Aug 07, 2012

"The United States leads the world in 4G LTE adoption..." - huh? Really? hmmm...

14. Shubham412302

Posts: 594; Member since: Nov 09, 2011

the thing i hate the most is speed cap

16. deviantirish79

Posts: 26; Member since: Jan 23, 2012

Eventually the FCC will step in and knock them down once efficient evidence is presented to them that proves the data caps to be unfair practice. Cable and DSL companies give you 5mps to 11mps for an average of $35 a month for unlimited data. Cellular carriers should be required to charge lower prices for tiered data.

25. Zero0

Posts: 592; Member since: Jul 05, 2012

It's a whole lot easier to deliver data over cable than wireless. Each cable is serving fewer people than a cell tower does. When we get into fiber, things get really nuts. Fiber has a much wider (as in, several times wider) spectrum than wireless radio can transmit at this time. Often times, one strand serves one household. Now you have a wider bandwidth serving a narrower population. Supply dramatically outweighs demand. This is why FiOS and Google Fiber can provide high speeds without a cap. As for forcing cell prices, the market is actually manageable right now. Aside from Verizon and AT&T, unlimited data is out there, and tiered plans can be found on the cheap. The recent decision which forces carriers to sell LTE data to MVNOs should help ease the market as well. The cable broadband market is probably in worse shape than mobile, to be honest. Data caps are still there. The caps are higher, but cable Internet is really more necessary. People are more likely to consume data at home by watching movies on Netflix and such. Not to mention that those providers almost always have a vested interest in Internet TV failing.

18. cripton805

Posts: 1485; Member since: Mar 18, 2012

Thats why Verizon sucks so much a.s.s. 1gb of data and unlimited voice and text for around $90. No thanks! I wont even support the company at all. Add a line for $60 to share that POS data plan. F*** no!

19. tntwit

Posts: 86; Member since: Sep 11, 2012

The video speaks mostly about landline internet being capped, just like in the early days of the internet. Do an internet search...the major landline carriers such as Time Warner and Comcast are "experimenting" in test markets with data caps. So when you figure you can live with tiered data on your mobile device because you connect to your wireless at home...think again, they plan on capping you there too if they haven't already in your market. As noted, this is limiting the growth of the tech markets because consumers cannot take advantage of services due to it becoming no longer cost effective. I currently use Play Music on my phone, but once I'm forced into a tiered plan that will go out the window. How many movies will be streamed at home if you have to worry about exceeding your data? Brilliant...we have gone back to the 90's. There are likely services that may never see the light of day because data caps will prevent their success. This is short term financial gain for the carriers at the expense of growth in the tech markets. Greed. USA has an article on it among others.

26. Zero0

Posts: 592; Member since: Jul 05, 2012

No. They've been capping for a long time. Comcast, last I checked, was experimenting with a suspension of the data cap for a few months.

22. RedPhantom07

Posts: 13; Member since: Jul 21, 2012

Couple Comments about the Video: 1) Though Data Caps stifle innovation at the high end of providing us with new streaming services, they do provide innovation in the field of compression, where those same companies will figure out how to provide us with the same data but do so in a smaller amount of data. 2) The people labeled as data hogs aren't just people who download one single big file, they in fact download multiple ones at once. So instead of only having one network connection like most people who may look at Facebook, then there email (facebook and email at the same time), they're opening many, many more simultaneous connections, all of them downloading files. 3) If you don't think multiple connections on a cell tower at the same time slows down speed, or causes network congestion, you clearly don't remember all the big conventions in the early days that used to down towers because so many people we're trying to use 3G at the same time. (I recall a few Apple announcements where they had to setup temp towers just to deal with the extra data backlog.) The fact that these companies are trying to make more money should not come as surprise to anyone in America, ever. That's kinda what businesses do, and if you can corner the market, and put little change in your pocket, that's part of the American dream (see Dan Akyroyd's speech to Chris Farley in Tommy Boy). He's correct in the sense that we don't have many options, but at the same time I've seen the data usage of many people's accounts. Most people don't use more than 2 GB/month. Should they pay the same as people who use more? Shouldn't those of us who use the network more pay more for it? Isn't the same argument that many Democrats use to argue for taxes?


Posts: 1461; Member since: Mar 09, 2010

I have said this over, and over, and over and many carrier fan boys got all upset. Now if you check my past post I even mentioned that when VOIP is implemented that cost for the end users data plan will always over shoot their tiered plans. Verizon's VP Mr. Shamo IIRC said it in one of his meetings to the stock holders about how tiered data would be profitable when VOIP is implemented in the future for obvious reasons. He also mentioned that LTE was used to switch new customers over to tiered data in preparation for VOIP, and that LTE reception was accepted beyond his wildest dreams and people were o.k. with paying them a premium for LTE, and lining up for what they have. The funny thing is that if you pay higher fees you can have 20 gig plus plans with Verizon. This truly means if you pay more for it data hogging is some what is o.k..

24. dorianb

Posts: 617; Member since: Oct 24, 2012

I'm on a 5GB & think I'm being throttled. I've been on 3G for the last three days & I'm still under my cap suspicious..... (=_=* )

28. D_Tech-tive

Posts: 104; Member since: Feb 12, 2012

Nothing but GREED!!!

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