Monday, 03 June 2013 12:01

Death Of The Deadbeat Carrier, part 3 - Home Internet Access Unplugged! Featured

Last week I posted on the demise of the Deadbeat Carrier, whose antiquated business models will quickly cause theiir obsolescence. In said post I showed how cost effective it is to use unlimited wireless carriers as a sole source of connectivity. Well, the Wall Street Journal ran a similar piece, Cord-Cutters Lop Off Internet Service More Than TV, to wit:

Hundreds of thousands of Americans canceled their home Internet service last year, surveys suggest, taking advantage of the proliferation of Wi-Fi hot spots and fast new wireless networks that have made Web connections on smartphones and tablets ubiquitous.

Last year around 1% of U.S. households stopped paying for home Internet subscriptions and relied on wireless access instead, according to consumer surveys by Leichtman Research Group Inc. Just 0.4% of households in the last year canceled their pay-television subscriptions in favor of getting video entertainment over the Internet via services such as Hulu orNetflix NFLX -3.48%.

...Dropping home Internet service isn't a great deal for heavy Internet users, however. While smartphones are fine for email and social networking, wireless data plans can be expensive and easily drained by even a single streamed high-definition movie. Free Wi-Fi is more widely available than ever, but cutting the Internet cord means users have to rely on cellular access at home.

Still, frustrated by rising cable and Internet bills, some subscribers are testing whether their smartphones and free Wi-Fi might be good enough. Others, unable to afford both services, are having to make do without easy access to streaming video for entertainment and education, underscoring the persistent differences in how people of various economic levels go online.

...Right now, replacing home Internet with wireless doesn't make much economic sense for any but the lightest users, says Craig Moffett, an independent telecommunications analyst. Leading carriers Verizon Wireless and AT&T Inc.T -0.66% have installed high-speed networks, but the companies also are trying to make more money from Internet traffic by pushing plans that charge subscribers by how much data they use.

Well that's the leading carriers! Nobody forces you to do business with a carrier that overcharges for its services!

The broader wireless industry offers less-expensive options, including unlimited plans at Sprint Nextel Corp. S -0.96% and the T-Mobile US Inc., TMUS -2.05% although Verizon Wireless and AT&T have the most extensive networks at the highest speeds.

This simply isn't true, and I demonstrated such in the demise of the Deadbeat Carrier by actually measuring the speeds of both AT&T and T-mobile. T-Mobile speeds are quite compariable in real world situations.

"The way we think about it is, wire-line and wireless networks are going to coexist," says Mike Roudi, senior vice president for corporate development at Time Warner Cable Inc. TWC -1.20% "It would be hard for somebody to rationalize getting rid of their home connection and moving all of that traffic to a wireless rate plan."

Hey, I did it nearly a year ago. It's working out just fine for me!

Still, with average home Internet charges approaching $50 a month and typical low-end smartphone plans costing at least that much, many Americans can't or don't want to pay for both. Surveys suggest that those who have to make the choice are choosing smartphone service—which, after all, offers both voice and online access—instead of home Internet. Minorities and people with low incomes are far more likely than the average American to rely on their phones as their primary way to get online, the Pew Research Center found last year.

Leichtman Research surveys show that spending for home Internet service has risen steadily over the years, to an average of $46.78 a month last year from $28.46 in 2005. People trading up to faster services—from dial-up to DSL to cable to fiber-optic—accounts for some of the increase, but so do rising prices.

I've tested my my T-Mobile LTE/HSPA+ hypbrid connection against AT&T DSL, Verizon Fios fiber-optic and Verizon DSL and it blows the DSL services out of the water and is price competitive with Verizon fiber up to about 15 MBs. Again, see the demise of the Deadbeat Carrier.

For those who don't believe my, I come bearing gifts. First, pretty charts...

Reggie Middleotns Carrier Cost Comparison

My next gift is your ability to generate your own chart with your own wasted wireless carrier dollar expenditures. Check it out..

Last modified on Monday, 03 June 2013 17:14

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