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  • [Narrator] Take a look at this AT&T bill

  • for two phone lines.

  • The total comes to over $142.

  • There are charges for 4G LTE access, international calling,

  • and a bunch of fees and taxes.

  • It's confusing and expensive.

  • But it's not just this bill.

  • Compared to similar markets,

  • the US has the fifth-most-expensive mobile data.

  • These prices aren't set at random.

  • There are a lot of factors that affect

  • what 1 gigabyte costs.

  • And these high costs are hurting everyone.

  • Let's go back to that graph.

  • The US has four major carriers:

  • Verizon, AT&T, T-Mobile, and Sprint.

  • But even though the US has multiple carriers,

  • their prices aren't competitive

  • like other countries with four carriers.

  • Research firm Rewheel found that median

  • mobile gigabyte prices in the US were 16 times higher

  • than European markets with four carriers.

  • Because of these high prices, consumers have to choose

  • the lesser of multiple evils when picking a data plan.

  • You either pay for a set amount of data

  • but get charged when you use extra,

  • or you pay more up front for unlimited data.

  • But unlimited data doesn't mean unlimited speeds.

  • After a certain point, you're going to get throttled.

  • With AT&T's unlimited plan, for example,

  • speeds may be slowed after you use 22 GB of data.

  • And you may find yourself throttled anyway,

  • no matter what plan you choose.

  • A study from Northeastern found that video streaming

  • was throttled even when the network

  • wasn't under a heavy load.

  • Even one of Verizon's unlimited plans explicitly offers

  • "DVD-quality" 480p streaming.

  • That's standard def, by the way.

  • Man: Of course it sounds strange at first.

  • The advertisement says it will.

  • [Narrator] Now, there are several

  • mobile virtual network operator companies.

  • Mint Fox: Hey there!

  • It's me, Mint Fox!

  • [Narrator] MVNOs piggyback off the cell towers

  • of one or more major carriers.

  • Companies like Mint and Google Fi offer cheaper plans,

  • but these aren't nearly as popular

  • as traditional cellphone plans.

  • And their speeds may be limited,

  • with priority given to the main network customers.

  • OK, so mobile data is expensive.

  • But 4G data isn't a physical thing.

  • If you use an extra gigabyte of data,

  • Verizon doesn't have to make another gig

  • to replace what you used.

  • So why does someone who used 10 GB

  • have to pay more than someone who used 2?

  • To understand what you're paying for,

  • we have to look at how data gets to your phone.

  • When you use 4G data, your phone is sending

  • packets of information to a cell tower.

  • That tower then sends information back and forth

  • over miles and miles of fiber-optic cables,

  • sometimes even submarine cables.

  • It costs a lot to run and maintain that infrastructure.

  • You're paying for things like repairs, updates,

  • administrative costs, and the electricity

  • it takes to run everything.

  • But remember all those taxes and fees?

  • You might be getting charged more

  • depending on where you live.

  • In the US, cellphone taxes vary widely by state,

  • and even within a state.

  • Just look at New York.

  • In 2018, cellphone taxes were almost

  • six times higher than Nevada.

  • There's also a serious lack of investment in rural areas.

  • Cities and places with a denser population

  • get new technologies like 5G first,

  • while rural areas have to deal with slower speeds.

  • In 2018, average mobile download speeds in Massachusetts

  • were more than double speeds in Wyoming.

  • And more remote geographical regions

  • often come with higher data costs.

  • No matter where you live, the amount you pay per gigabyte

  • doesn't really equal the cost to maintain the network.

  • It's competition that controls data prices.

  • In 2017, both AT&T and Verizon brought back unlimited plans

  • in response to plans offered by T-Mobile,

  • and research has shown that prices in three-carrier markets

  • are higher than four-carrier markets.

  • But these problems are much worse

  • in certain parts of the world.

  • Only about 51% of the world is using the internet.

  • High data costs are one of the biggest factors

  • that prevent developing countries from getting online.

  • Research from the Alliance for Affordable Internet

  • found that in low- and middle-income countries,

  • 1 GB of mobile data costs 5.5%

  • of the average monthly income.

  • That's five times higher than what the organization

  • considers affordable internet.

  • To give you an idea of how high that is,

  • 5.5% of a $50,000 US salary

  • would be almost $230 per month

  • for just 1 GB of data.

  • Announcer: The dwelling without a phone

  • is cut off from the world,

  • regardless of its closeness to other buildings.

  • [Narrator] But there are solutions to this problem.

  • Some countries are putting specific focus

  • on lowering mobile data prices.

  • Dhanaraj Thakur: Malaysia are putting out an effort

  • to ensure there is competition in the market

  • to make it easier for people to come in,

  • like new companies to come in and sell services.

  • [Narrator] That's Dhanaraj Thakur.

  • He's the research director at the Alliance

  • for Affordable Internet and the Web Foundation.

  • Dhanaraj pointed out that Malaysia

  • has also invested in subsidizing access

  • to lower-income groups.

  • Thakur: Some countries are really making an effort

  • to try and push these powers that can improve affordability.

  • [Narrator] Competition, government investment,

  • and infrastructure sharing can all help lower data costs.

  • But consumers in low-income areas

  • don't always get this investment.

  • In June, the FCC took an initial step

  • towards limiting the spending of universal-service programs,

  • a program that, according to the FCC,

  • is designed "to make broadband as ubiquitous as voice."

  • Capping the USF could limit broadband access

  • in rural areas and classrooms.

  • And competition may be getting even harder to find

  • in the US, as Sprint and T-Mobile are trying to merge.

  • A lot of people are concerned that

  • if the US consolidates to a three-carrier market,

  • the lack of competition will increase costs for consumers.

  • We don't know for sure what will happen

  • if T-Mobile and Sprint merge.

  • They claim the merger will allow them to lower prices

  • and create new jobs.

  • But when AT&T and Cingular merged in 2004,

  • thousands of workers were laid off.

  • What we do know is that higher data costs

  • and lax regulations on carriers hurt consumers,

  • although even in a market that isn't competitive,

  • you may still have some choice.

  • Don't just accept your expensive bill.

  • Take some time to shop around

  • or tell your carrier you're thinking of switching

  • to see if they can offer you something better.

  • You might be able to find a cheaper plan.

[Narrator] Take a look at this AT&T bill

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Why Does Extra Data Cost Money? | Untangled

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    林宜悉 posted on 2020/11/09
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