Wireless Carriers Won't Comment On 5G's Most Important Question: How Much Will It Cost?

We’ve noted a few times that while fifth-generation wireless (5G) will certainly improve the speed, reliability, and latency of existing networks, it’s being pretty painfully overhyped by hardware vendors and cellular carriers. Telecom industry marketing folks spend countless hours insisting that the smart cities and smart cars of tomorrow are only possible with 5G, the sort of claims countless online outlets will repeat utterly unquestioningly. More often than not these claims are based on nothing close to reality (like this one claiming 5G will somehow result in four day work weeks).

While 5G will result in faster, more resilient networks, it doesn’t magically somehow unleash additional innovation for tech that already largely works on existing 4G networks (smart cars, smarter cities). And while carriers have begun testing and hyping various incarnations of 5G, broad phone availability on broadly-deployed 5G networks remains years away as companies hammer out battery life issues (Apple isn’t releasing a 5G iPhone until 2020, or potentially later) and push 5G upgrades to rural and less affluent cities these companies routinely don’t care much about. .

While most media articles on 5G are little more than blind stenography of wireless marketing claims, Sean Hollister at The Verge did a good job last week breaking down 5G’s promises, laying down the real-world impact and deployment schedules. More importantly, he narrows in on what’s probably the most important question for 5G carriers don’t want to answer: how much will 5G cost?

“Consider me a wee bit concerned that on the eve of AT&T’s launch, neither AT&T nor Verizon was willing to talk about how much, how often, how fast, nor answer what’s probably the most burning question: whether we should expect to pay more, less, or the same for 5G connectivity. (Because 5G’s inevitable, right? You’ll be paying for it sooner or later.)

For that matter, neither carrier would even tell me whether today’s data caps might get larger to account for the tremendous amount of data we’ll supposedly be using on 5G. I figured that would be a softball question, but they deflected anyhow.

That question, in turn, is being very directly shaped by the attack on net neutrality:

“I do wonder how the death of net neutrality will embolden the carriers to do things that would have been unthinkable before. One of the reasons carriers argued for the end of net neutrality was to open up “innovative” business models, and it’s possible they’ll look at bundling their own services, or those of partners, with free or discounted 5G connectivity.”

Since most of these services aren’t launching until next year, it’s not surprising they’re not able to comment on pricing yet. That said, if the history of telecom is anything to go by, you can be sure of two things related to 5G pricing: it won’t be cheap, and (like we’re seeing with “unlimited” packages) will be saddled with all manner of caveats designed to nickel-and-dime you just for using it. As such, any evolutionary gains made in network advancement could easily be hamstrung by bad tech policy dictated by mobile carriers.

The problem for carriers: they’re not really sure how much nickel-and-diming they can actually get away with, since a lot of that depends on whether the FCC and its ISP BFFs win next February’s looming net neutrality lawsuit against the FCC. If the plaintiffs (23 State AGs, Mozilla, and consumer groups) win that case, the FCC’s 2015 net neutrality rules should be restored, dramatically impacting 5G pricing and plans. Should they win, there’s not much (outside of a future FCC or Congress passing new rules) preventing the wireless industry from upping the ante in terms of nickel-and-diming consumers in a wide variety of ways.

That means a lot more of the kind of dubious stuff we’re already seeing on 4G networks, such as throttling all video then charging consumers a premium to get around restrictions that shouldn’t exist in the first place. So while 5G will be a step forward in many ways, the death of net neutrality will have a lot to say about how much value consumers (both consumer and enterprise) see from 5G. And of course this is before you factor in in the looming Sprint, T-Mobile merger, which will reduce the overall number of competitors, and any real incentive to compete on price.
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