In a new report entitled “4G + Data Caps = Magic Beans,” the firm said that “consumers will find their experiences with the faster services severely hampered by the rationing techniques the carriers impose on customers who use lots data — such as watching video.” The warning comes as operators like Verizon, Sprint and AT&T are feverishly marketing their 4G networks to help sway new subscribers. With low data caps, however, consumers might not get what they thought they were signing up for.
“These data caps actively discourage the types of activities that 4G enables, Public Knowledge said in its report. “Activities that are made possible by 4G, such as watching movies or uploading video to the internet, are made impossible by the data caps. As a result most users will avoid taking advantage of these new services out of fear of incurring large overage fees. That makes capped 4G little more than a bait and switch, like being sold a handful of magic beans.”
While the report notes that 4G can be a useful technology, as it provides faster and better service, the report concluded: “The imposition of data caps on 4G networks marks an unfortunate milestone in the history of network innovation. For the perhaps first time, the introduction of a generationally faster technology will not have a widespread impact on online behavior. As long as there are low data caps, most users will be better off staying with a (cheaper and slower) 3G connection than paying a premium for 4G.”