What They Don’t Want You to Know About 4G: Rich Jaroslovsky

You can hardly turn on the television or walk into an electronics store without being assaulted by hype about the new, faster data networks being rolled out by the major U.S. wireless carriers.

Sprint Nextel Corp. has “the Now Network.” T-Mobile claims “the nation’s largest.” Verizon Wireless is “Lightning Fast, Lightning Strong.” Everyone is pushing new phones, tablets and other mobile devices that take advantage of all that power.

There’s just one problem. Some of these new networks aren’t so new, some aren’t so fast, coverage is spotty and they can be expensive. Did I say one problem? That was four. And here’s a fifth: Wireless carriers and device manufacturers are creating a confusing mess for consumers.

The confusion stems from a lack of agreement on what constitutes a 4G, or fourth-generation, data network. As initially defined by the standards-setting International Telecommunications Union, 4G was supposed to refer to networks that would be orders of magnitude faster than the 3G networks now widely in use.

That idea was largely ignored by carriers, especially those in the U.S., in the rush to convince consumers they were missing out on something new and cool. Late last year, the ITU basically threw in the towel on its original definition. Now almost anything goes.

4G Creep

The U.S. carrier most affected by 4G creep is probably Sprint, which last year began rolling out service on a new network based on a technology called WiMax in conjunction with Clearwire Corp. (CLWR) It’s a genuinely new network, and if you’re a Sprint 4G customer who is lucky enough to live in an area with 4G coverage, you’ll see data speeds that are noticeably faster than 3G.

Here’s where it gets complicated. AT&T Inc. (T) and Verizon Wireless both have embraced an alternative technology called LTE (for Long Term Evolution) and Verizon began rolling its network out late last year. Meanwhile, AT&T and the fourth major U.S. carrier, Deutsche Telekom’s T-Mobile, have begun tweaking and rebranding their existing 3G networks as 4G.

In promoting the Inspire, a smartphone from HTC Corp. (2498) running Google Inc.’s Android operating system, AT&T offers this explanation in faint, fine print, next to an asterisk: “4G speeds delivered by HSPA+ with enhanced backhaul.” Gee, doesn’t that make everything clear?

More Confusion

Adding to the confusion, the AT&T phones being labeled 4G because they can run on the HSPA+ network may not run on AT&T’s LTE network, which is likely to appear later this year.

“4G is now officially meaningless,” says Will Strauss, a wireless analyst who is president of Forward Concepts, in Tempe, Arizona.

While all carriers cite sky-high theoretical maximum speeds that normal human beings will never see, the only thing that counts is what users can actually expect on a daily basis. In recent months, I’ve tested a variety of allegedly 4G devices from all four major U.S. carriers, using Ookla’s Speedtest app linking to the same remote server to compare speeds.

It’s hard to generalize, because network performance can vary widely from location to location, from device to device and even from hour to hour, depending on the volume of data traffic. But in my tests, conducted in both the San Francisco Bay Area and Los Angeles, I have consistently found that Sprint’s WiMax network is much faster than AT&T’s and T-Mobile’s HSPA+ networks.

Speedy Sprint

For instance, in my San Francisco tests, the Sprint EVO Shift -- a phone made by HTC that runs Google Inc. (GOOG)’s Android operating system -- averaged download speeds that were seven times faster than AT&T’s Inspire, another Android-based HTC phone, and 16 times faster than T-Mobile’s Galaxy S 4G, an Android phone made by Samsung Electronics Co., which were connecting over their respective 4G networks.

The fastest results belonged to Verizon’s LTE network, which it switched on in December and is now available in 38 markets and more than 60 airports. I obtained speeds that were 50 percent faster even than Sprint’s.

There’s a huge caveat, though: The only devices that now take advantage of the network are a couple of laptop-computer adapters. The first Verizon LTE phone, the HTC Thunderbolt, isn’t yet for sale, and the true test of the network’s speed won’t come until it’s crowded with a few million phone users updating their Facebook pages and streaming YouTube videos. My early experiences were akin to speeding down a highway where I was essentially the only car on the road.

Pricing Puzzle

Meanwhile, pricing for 4G service is a murky work in progress. Sprint, for example, charges $49.99 a month for unlimited 4G service, which sounds pretty good until you remember that not everywhere you go may have 4G service. So you’ll likely end up needing the $59.99 plan, which couples unlimited 4G with up to five gigabytes of 3G data.

Verizon is currently charging users of its laptop adapters $50 a month for five gigabytes of data, and $80 a month for 10 gigabytes. There’s no definitive word on the cost for phones, but I bet that one way or another, 4G customers will find themselves paying more.

The moral of the story, if there is one, is to treat any 4G label skeptically for the foreseeable future. Your shiny new 4G phone may turn out to be as fast as you expect, or it may not; just don’t expect the carriers to give you much help figuring it out.

Rich Jaroslovsky is a Bloomberg News columnist. The opinions expressed are his own.)

To contact the writer of this column: Rich Jaroslovsky in San Francisco at rjaroslovsky@bloomberg.net.

To contact the editor responsible for this column: James Greiff at jgreiff@bloomberg.net.

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