[Infowarrior] - Video Speed Trap Lurks in New iPad

[Richard Forno]

	• TECHNOLOGY
	• Updated March 20, 2012, 7:44 p.m. ET

http://online.wsj.com/article/SB10001424052702303812904577293882009811556.html

Video Speed Trap Lurks in New iPad

Users Find the Superfast 4G Link Carries a Big Cost: Churning Through Data Limits in Mere Hours

By ANTON TROIANOVSKI

Brandon Wells got the new iPad last Friday, started wirelessly streaming March Madness games the next day and by Saturday night was out of gas.

Two hours of college basketball—which he viewed mounted to his car dashboard and live at tournament games—had burned through his monthly wireless data allotment of two gigabytes.

 
Excited users of the new iPad are finding there's a drawback to the blazing fast 4G connection offered by their new device: They burn through their data limits in as little as a day, Anton Troianovski reports on the News Hub. Photo: AP.

Now, to keep surfing the Web or watch more NCAA hoops over Verizon Wireless's 4G network, Mr. Wells will have to pay an extra $10 for every gigabyte above his current $30 subscription.

It has been only five days since users of Apple Inc.'s AAPL +0.81% newest iPad first took the device out of the box. Some are now finding just how quickly the promise of superfast wireless connections collides with the reality of what those services cost.

"It's kind of a Catch-22," says Mr. Wells, a 31-year-old Web developer who decided to pony up for another gigabyte. "It streams really fast video, but by streaming really fast video you tend to watch more video, and that's not always best."


Steven St. John for The Wall Street Journal
Brandon Wells of Albuquerque, N.M., holding a portrait of himself on his iPad, is reconsidering how much mobile video to watch on the device.

The iPad's new high-resolution screen and fast connection are specifically designed to spur greater use of online video—a long-stated goal for phone companies as well as technology purveyors such as Apple and Google Inc. GOOG -0.08% Telecom companies in particular are banking on mobile video to drum up demand for their new, fourth-generation networks and create new revenue streams as they adjust to the smartphone age.

That means something has to give: Either consumers will have to get used to paying more or wireless carriers will come under pressure to change their pricing models.

Verizon declined to comment on its pricing strategy, but said customers can pick higher-use plans or they can go easier on their data allotments by shifting to Wi-Fi networks when they are available.

Those alternatives don't always line up well with what consumers want.

Albert Park, a 24-year-old working at a start-up in Austin, Texas, tapped into the Wi-Fi network at a local café on Sunday to watch some YouTube videos on his iPad. The network turned out to be too slow for an uninterrupted stream, so Mr. Park switched to the high-speed mobile network operated by his service provider, AT&T Inc. T +0.44%

For the next hour, Mr. Park watched concert videos and other clips and browsed social-media sites. On Tuesday, five days after getting the new iPad, he found he was already two-thirds of the way through his monthly allotment of 3 gigabytes of wireless data.

"I'll probably avoid watching videos outside my home," Mr. Park concluded.

AT&T declined to comment.

Such decisions set up a quandary for wireless carriers, which are rolling out multibillion-dollar high-speed networks that use a technology called LTE. The technology promises to boost mobile download speeds by 10 times compared with third-generation networks, making it almost purpose-built for mobile video.

Verizon Wireless, a joint venture of Verizon Communications Inc. VZ -0.05% and Vodafone Group VOD +2.66%  PLC, has the nation's biggest LTE network, covering an area with more than 200 million people. AT&T's LTE network covers 74 million people. Both carriers' LTE networks are still growing, and Sprint Nextel Corp. S -0.36% and T-Mobile USA—which don't currently carry the iPad—also have plans to build LTE networks.

The carriers, suffering from a decline in voice-calling revenues, hope that LTE boosts monthly bills for wireless service, and they charge by the amount of data consumed. Thirty dollars a month buys 2 gigabytes of data at Verizon and 3 gigabytes at AT&T.

Mr. Park and Mr. Wells both say they're thinking about upgrading to $50-a-month plans, which buy 5 gigabytes of data at both AT&T and Verizon. But both say they're also reconsidering how much mobile video they watch on their device.

"With LTE, the quality and the streaming is fantastic," Mr. Wells said. "But man, you're really limited in terms of the amount of content you can consume."

Mr. Wells's father, Steve Wells, also hit his data limit on Saturday. While he was at the basketball game with his son, his wife was using his iPad as a video baby monitor for his granddaughter while she napped in another room. By the time the two were back from the game, the app had burned through his two gigabyte plan.

"All the advantages of the iPad device are completely neutralized by the two gigabyte data limit," said Steve Wells, 56.

What many consumers may not realize is the new iPad's faster LTE connection means they will use more data even if they don't change their 3G surfing habits. Take regular video: Verizon estimates that streaming it over an LTE connection runs through 650 megabytes an hour. That's double the amount of data used streaming the same video over a 3G link, because the fatter pipe lets more data through.

On top of that, the new iPad's sharper screen will encourage some users to view videos in high-definition, which uses 2 gigabytes an hour on a 4G connection, according to Verizon.

With users skittish about paying more, wireless carriers are likely to experiment with new pricing schemes as they try to squeeze more profits out of their new networks.

AT&T, for example, is studying a plan to give app developers and content providers the option to pay for the mobile data their products use, thereby keeping those apps and videos from counting against a user's allotment of data, kind of like an 800-number for apps.

That could help win more business from people like Cindy Bryant, a new iPad owner in Clyde, N.C. Ms. Bryant, a 45-year-old appliance saleswoman, got an email from Verizon Wireless on Monday alerting her that she had used up 90% of her mobile data allowance.

Ms. Bryant, who doesn't have landline Internet access at home, figures she's approaching her limit because she downloaded lots of apps. She'd like to experiment with watching videos on her iPad, but says she won't before the next billing cycle comes around.

"I'm going to put myself on a diet," Ms. Bryant says.

Write to Anton Troianovski at anton.troianovski at wsj.com


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Just because i'm near the punchbowl doesn't mean I'm also drinking from it.