Monday, March 26, 2012

Now that LTE has landed onto the iPad, true broadband has finally arrived to the most popular tablet on the market. It didn’t take long, however, for many to find out that the new Retina display could also be a negative feature to the new lightening fast third-generation iPad. With the new high-definition screen came the ability to view HD video. More detail means more bytes which means less time. The Wall Street Journal reported that Brandon Wells picked up his iPad on a Friday and proceeded to stream March Madness the next day. In just two hours, he had reached the limit of his plan. Wells $30 plan gave him 2GB of data. To continue watching on his iPad without the aide of Wi-Fi, Wells would have to paid an additional $10 per 1 GB. Naturally Verizon refused to comment on Wells quick evaporation of his broadband allotment but suggested he simply pay for a more expensive plan that would have given a little more than two hours of additional viewing pleasure. It also suggested he use Wi-Fi when possible. What’s the point of LTE then?

Jason Perlow over at ZDNet touches on this new problem and reminds his readers that he warned of this very issue a year ago in late 2010. Perlow points out that when Netflix supports HD with its pending updated app, things will only become worse. He does a very good job of explaining the issue at hand and why the new iPad eats up so much more data than the previous versions.

While Android tablets and smartphones have been riding the LTE wave for over six months on the Verizon network, their small numbers in sales have put little stress on Big Red or much attention to those running out of broadband quickly. Further, Android tablets do not have any HD content to pull out of the cloud as does the iPad. But now, everything’s about to change.

Apple sold an astonishing 3 million iPads opening weekend. That’s 1 million iPads a day. Essentially, Apple sold more third-generation iPads in a few hours than all Android tablets sold in 2010. This sets the stage for a large pool of LTE users who will first become unpleasantly surprised like Wells and then brew up some anger. The majority of users will opt for the $30 per month plan and may up to the $50 plan to garner some more streaming time. Unfortunately, this will only give users a bit more than twice of what they originally had and without changing their viewing habits, this will not even get them past a weekend without running out “time”. Overage fees will surely take a, um, byte out of many pocket books and its sure to stir up some frustration.

Personally, I think the most interesting development from all of this is how Verizon basically bragged about how LTE would allow it to do data better for less when it began rolling out LTE in early 2010. Why? Because 3G networks and its predecessors were designed for voice, not data. With “4G”, things would be much better due to the fact that it was made specifically for data. Yet little change in cost of plans or amount of data – if any – were seen. Instead Verizon and AT&Ts greed and oligopoly give them full reign to continue in this fashion.

So what can be done? Regulation could occur as is the knee-jerk reaction from public out cry. There could be a consumer revolt causing a campaign of users to come together and force change from the carriers. The third and least likely answer would be competition. Between T-Mobile and Sprint on near extinction, it’s only a matter of time for AT&T to figure out how to acquire one of them the second time around with Verizon getting the left over. The other alternative is to simply not purchase an LTE version of the iPad but with Wi-Fi not as widespread as cellular connections, that choice isn’t a good one.

I think we will see pressure from services such as Netflix, Google (YouTube), and other providers that will be effected on its bottom line. It may be a few years before real pressure occurs but with the new iPad, this time table may be sped up. We’ve already seen big names such as Netflix’s CEO Reed Hastings make complaint about data caps which is just the beginning. More will become vocal in the coming years if not months. Really, it will be these people that will be our advocates for more broadband on our iPads and other devices for less cost.

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