Why the 5G Pushiness? Because $$$.

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Selling 5G capability is a huge opportunity for phone companies. Be careful.



CreditCredit…By James Marshall

Shira Ovide

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I find it helpful to look for the profit motives behind what’s happening in our shopping lives.

So why does it feel as if every other commercial you see on TV or online is a phone company blaring “5G! 5G! 5G!” into your ear holes? Because each once-in-a-decade changeover in wireless technology is a shot for companies like Verizon, AT&T and T-Mobile to pad our cellphone bills without us going nuts and to steal customers from one another.

That’s not necessarily bad for us, but it does mean that the next time you’re buying a new phone or staring at a marketing message from a phone company, you should watch your wallet. You want to make sure you’re making a purchase that is good for you, and not just good for the phone company’s bottom line.

I wrote last week that America’s phone companies are overselling the current abilities of 5G, the next generation of wireless technology. My colleague Brian X. Chen has detailed how the reality of 5G coverage differs from the hype: Most of what exists now is not much of an advancement.

Yes, 5G will eventually make our phones zippier and usher in new technologies we couldn’t have imagined. Just not now. This means you do not necessarily need it right now.

(Readers outside the United States: This advice may not apply to you. Some other countries’ 5G networks are further along or less of a mess. I’ll discuss places where 5G is working well in an upcoming newsletter.)

But right now is a very real opportunity for phone companies. Americans who are buying new, 5G-ready smartphones — like the latest crop of iPhone models — are often directed to the phone companies’ pricier service plans.

Those plans — including those with “unlimited” use of internet data — are great for many households, but they’re expensive and inflexible for others. (It’s more accurate to call them “unlimited” with the air quotes because they don’t exactly provide unlimited use of phone data.)

To be fair, the phone companies are spending a fortune to upgrade the country’s wireless networks to 5G. And it’s understandable that they’re trying to recoup their costs.

But that’s not the only thing happening here. What Americans pay for their smartphone service plans hasn’t budged for awhile, and the phone companies are trying to reverse that by giving us a reason to pay more.

The most important factors in a phone company making money on smartphone service are getting customers to stick with the company for a long time, and getting them to pay more each month. The shift to 5G is a shot to do both.

Phone companies’ profit motives can help us get a good deal. But I find it helpful to repeat a line from Brian in a column last year. “Telecommunications is one of the world’s most lucrative industries, and wireless carriers will turn a profit no matter what,” he wrote. “You can’t beat the house.”

Your lead

In last week’s newsletter about why 5G is still the pits in the United States, a number of readers asked: If they’re buying a new smartphone in any case, should they go for one that is capable of operating on 5G cellphone networks? (Phones must have specialized parts to connect to 5G phone networks, so older phones aren’t capable of getting 5G.)

Short answer: Even if you’re getting a new smartphone now, it probably makes sense to go for a slightly older model that doesn’t support 5G. Save your money. Buy more cookies instead.

One of the questions came from Elizabeth Schultz in Manchester, N.J. She has a seven-year-old iPhone, and is debating buying a new $400 iPhone SE or one of the just released iPhone 12 models at $700 and up.

The iPhone SE isn’t capable of connecting to 5G cellphone networks, and Elizabeth is worried that AT&T, her current phone company, might make 4G networks obsolete in a few years if she goes for that one.

Rob Pegoraro, who writes about cellphone service for The New York Times’s product review site, Wirecutter, tackled this question:

  • Between the iPhone 12 mini and the iPhone SE, I would go with the SE. AT&T barely has the ultrafast type of 5G known as “millimeter wave,” and you’ll get a modest or no speed benefit with AT&T’s current 5G in your area based on its coverage map. And I can’t think of any scenario in which AT&T shuts down 4G service over the life of a smartphone purchased today. Current phones with 5G parts also tend to be larger and drain the phone battery more than many people expect.

  • My other suggestion is to consider changing your cellphone plan. Service has generally gotten far cheaper at the major carriers since you last bought a smartphone, but you can’t count on the companies to tell you that you’re paying too much.

  • My colleagues have been busy bees on Google and antitrust! In an interview with our reporter Cecilia Kang, the government’s lead lawyer in the case against Google said that when AT&T was split apart in the 1980s because of an antitrust lawsuit, “consumers wound up much better off.” I’m sure he wasn’t making an analogy to Google at all, nope!

    Steve Lohr spoke to legal brainiacs who proposed the creation of a specialist government regulator to police major U.S. tech companies, similar to how the Federal Aviation Administration is a watchdog for airlines.

    An unlikely and well-funded collection of professional tech skeptics who have urged more aggressive uses of U.S. antitrust laws helped set the stage for the Google lawsuit, Adam Satariano and David McCabe write.

    Greg Bensinger, a member of The New York Times’s editorial board, wrote that the government’s case against Google “is both too narrow and too long coming to dethrone the company.” And the last word here goes to Google’s former chief executive, who told The Wall Street Journal that it’s bad policy to use antitrust laws to regulate companies like Google.

  • The deeper meaning behind a vote on contract work: A California ballot measure over whether Uber and other app companies should reclassify workers as employees is “just the beginning” of a national debate over regulating gig work, my colleague Kate Conger said in our California Today newsletter.

  • How to take better photos of your pets: Try a sheet as a backdrop, be patient and consider a shutter timer. Here are more tips from my colleague J.D. Biersdorfer.

“Dogo Argentino” is not the corny name of a fictional pet detective but a real and adorable dog breed that will start competing in the Westminster Dog Show.

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October 23, 2020
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