Without dramatic changes in wireless pricing and more careful usage, owning a smartphone will cost an average of $119 a month per phone by the year 2019.

Ever since the largest players in the wireless industry decided to monetize wireless data usage by ending unlimited use data plans, the average monthly phone bills of smartphone users have been on the increase. In 2013, the average cell phone bill was $76 a month, according to Bureau of Labor statistics. That’s up 50% from the $51 a month customers paid in 2007, the first year the iconic Apple iPhone was offered for sale.

Although wireless companies claim their current 4G (largely LTE) networks are robust enough to sustain the growing demand for wireless data until more spectrum becomes available, the transition to next generation 5G technology will dramatically increase the efficiency of wireless data transmission, delivering up to 40 times the speed of existing 4G networks. But if providers are not willing to slash prices on 5G data plans, average usage and customers’ phone bills are likely to soar to new all-time highs, costing a family of four smartphone owners an average of $476 a month.

A study by Wafa Elmannai and Khaled Elleithy at the Department of Computer Science and Engineering at the University of Bridgeport found wireless carriers have given up on monetizing voice and texting services, including unlimited minutes and text messages as part of most basic service plans. The real money is made from wireless data plans which traditionally cost customers between $10.79-16.72 per gigabyte, depending on the carrier and whatever fees, surcharges and required add-ons are necessary to get the service.

Wireless carriers defend their pricing, claiming they have cut prices on certain data plans while granting some customers extra gigabytes of usage at no extra cost. Some evidence shows that carriers have indeed reduced the asking price of delivering a megabyte of data by 50 percent annually. But their costs to deliver that data have dropped even faster, particularly as networks shift traffic away from older 3G networks to 4G technology, which is vastly more efficient than its predecessor.

The end of unlimited data plans by AT&T and Verizon Wireless was key to shifting the industry towards monetizing data usage. The more a customer consumes, the more revenue a carrier earns. But as web pages and applications become more complex and bandwidth intensive, customers will naturally consume more and more data each month, forcing regular usage plan upgrades to avoid confronting overlimit fees. Unless providers pass along more of their savings on traffic costs to consumers, bills will rise.

At current usage estimates from Cisco, the average customer will consume at least 57% more wireless data by 2019 than they do today. To sustain that usage, wireless providers are bidding for additional spectrum rights and are working towards upgrading to next generation 5G technology. But some carriers, including AT&T and Verizon, are also investing in new applications for their networks that include in-car telematics, home security and automation, and online video. Using some of these technologies guarantees an even greater amount of data usage, particularly for online video. Unless customers are careful about their usage and avoid high-bandwidth applications, they are in for a much bigger bill in the future, much to the delight of wireless providers.

While most analysts expect wireless companies will choose to give customers a larger data allowance instead of resorting to fire sale pricing, Elmannai and Elleithy expect that will not be enough to keep cell phone bills stable.

“We will need to reduce the bit rate to (1/1000th) of today’s level in order to receive x1000 of data capacity [at the] same cost [we see today],” the authors conclude. That would mean a low end 1GB data plan on a 4G network would cost just $0.03. Larger allowance plans would cost less than one cent per gigabyte.

The authors of the study expect carriers to price 5G data plans more or less the same as 4G plans, but will probably boost usage allowances to deliver a perception of greater value. But as web applications continue to gravitate towards higher data usage, bills will continue to rise, assuring providers of growing returns even with modest to moderate levels of competition.

At the moment, despite some evidence of price competition, some carriers are still raising prices. Verizon increased the price of its 10GB plan by $20 to $100 a month and T-Mobile raised the price of its unlimited data plan by $10 a month last year.

A customer angry over the performance of a Comcast technician in his Berwyn, Ill. home stood in his doorway and blocked the technician from leaving until the work met his satisfaction.

Police say things deteriorated from there. When the technician said he attempted to leave to avoid escalating what was already a heated verbal altercation, Thomas Guel, 37, of the 1900 block of South Elmwood Ave., allegedly pushed the technician and slapped him in the face.

Authorities charged Guel with unlawful restraint and battery.

In our view, such confrontations are unacceptable and unconscionable. It is never appropriate to become verbally or physically abusive to a worker invited into your home. If you are dissatisfied with the work being done by a technician and they are unresponsive after bringing your concerns to their attention, thank them for their time and politely ask them to leave. Then contact your provider and ask for a supervisor to intervene and handle the situation.

The Comcast technician did the right thing by seeking to end the confrontation by leaving. Had he been allowed to, this story would have never been written.

This weekend will end the first phase of our campaign to fight Cox usage caps being tested in Cleveland, Ohio. We’re collecting the names and e-mail addresses of interested citizens that would like to participate in the fight to get Cox to drop its usage-based billing and overlimit fee scheme. If you are interested, use the link at the top to “Contact Us” as a volunteer and include your name and a valid email address.

Next week we will have an initial outline for an action plan with hopes of building a team of Cleveland-area Cox customers to lead the fight. Local participation and involvement is essential to win these battles, and we will expect the city’s Internet enthusiasts to run this effort themselves, with support from Stop the Cap! It’s your fight to preserve your uncapped broadband, so please get involved!

[flv]http://www.phillipdampier.com/video/WEWS Cleveland Cox Changing Internet Service 5-19-15.mp4[/flv]

WEWS in Cleveland ran a story on Cox’s usage caps and interviewed Stop the Cap! about why usage-based pricing is typically a giant ripoff for customers. (2:12)

The new CEO of Frontier Communications is promising more fiber to the home service and advanced ADSL2+ and VDSL2 service to dramatically boost Internet speeds… if you happen to live in a Verizon territory Frontier is planning to acquire in Texas, California, or Florida. For Connecticut customers that used to belong to AT&T, Frontier also plans to spend money to further build out AT&T’s U-verse platform to reach more suburban customers not deemed profitable enough to service by AT&T.

For legacy Frontier customers in other states? Frontier plans nothing beyond what it already provides — usually dismally slow DSL.

Speaking to investors during the JP Morgan Global Technology, Media and Telecom Conference, Frontier CEO Daniel McCarthy said upgrades offer the company new earnings opportunities, but a closer analysis reveals those benefits will only reach customers in areas where Verizon and AT&T already did most of the work and spent the money required to build advanced network infrastructure.

Verizon has spent millions upgrading customers in Texas to its FiOS service and has a significant fiber to the home presence in California and Florida. Because fiber infrastructure is already largely in place, Frontier will not have to spend huge sums to build a new network. Instead, it will spend incrementally to expand service to nearby service areas.

Mediocre broadband in upstate New York.

“The FiOS penetration is much higher, specifically in Texas, but we think there’s a lot of opportunity to drive FiOS penetration in Florida and California,” McCarthy said. “We see that as a big opportunity.”

Fierce Telecom notes Frontier won’t have to make a large investment outside of installing new DSLAMs in remote terminals or local Central Offices to deliver higher speeds over copper. Frontier will likely depend on VDSL2 technology on short copper line lengths in suburban areas and ADSL2+ in rural locations.

“I think in this case it might be replacing some electronics, but it’s not a heavy lift from a construction perspective,” McCarthy said. “By putting in a shelf and next-generation capabilities, whether it’s VDSL, ADSL2+, or all the different flavors you can use to serve the different loop lengths in a market you achieve the ability to bring a fresh product set into an area at a fairly low cost.”

While Frontier is willing to invest money in areas that are easy to upgrade, it has proven itself reluctant to consider major upgrades in its legacy service areas where it acquired traditional copper-based landline networks.

“The new states will clearly have new growth opportunities,” McCarthy said. “In Florida there has been a revival of housing in certain areas and subdivision growth in Texas and California.”

In Connecticut, Frontier will build on the acquired AT&T fiber/copper network with a modest expansion of U-verse.

“We actually see growth opportunity in Connecticut,” McCarthy said. “As we go through and look at the Connecticut property, one of the things that have been a recent development from a technology perspective allows us to serve lower density parts of the state of Connecticut with U-verse product that was limited by densities and loop lengths in the past.”

Although the company often touts millions in upgrade investments, most legacy service areas see only modest service improvements, while the company continues to score very poor in customer satisfaction, especially in states like West Virginia, Ohio, Pennsylvania and New York. With Frontier’s ongoing focus on newly acquired service areas, long-standing customers in other states are feeling neglected.

In upstate New York, the prevalence of Frontier Communications’ low speed DSL on the company’s legacy copper network has dragged down overall broadband speed ratings to some of the lowest in the country. Frontier territory Rochester, N.Y., in particular, is now among the worst cities in the northeast for overall broadband speed performance, now rated at just 21.42Mbps. The national average is 36.22Mbps. In comparison, Buffalo scores 24.31Mbps, Cleveland: 22.57Mbps, and NYC 55.56Mbps.

Signing a three year contract usually meant a cheaper device.

Canadians still stuck on an old three-year wireless contract may be able to leave their current carrier penalty-free as soon as June 3rd as the Canadian Radio-television and Telecommunications Commission’s (CRTC) deadline on lengthy wireless contracts takes full effect this Sunday.

In June 2013, the CRTC banned three-year cell phone contracts in its wireless code to give customers a chance to switch providers more often without an expensive early termination fee to deter them. The commission set a two-year transition period which will end June 3.

But it turns out wireless carriers have not made the process of leaving penalty-free easy and the Commissioner for Complaints for Telecommunications Services (CCTS) expects the ombuds office will be forced to intervene on behalf of consumers. Some providers have applied creative interpretations of the wireless code the industry earlier sued to block on the grounds it created retroactive interference with contractual rights. The Federal Court of Appeal dismissed the wireless industry’s lawsuit last week. The CCTS is notifying providers what it expects from them.

There are two primary groups of customers affected by the June 3rd deadline:

• Those who signed a three-year contract before June 3, 2013:

These customers will see their three-year contracts cut to two years, and all will expire June 3. They can leave their current provider without any early termination fees or penalties.

• Those who signed a three-year contract between June 3-Dec. 3, 2013:

Things get more complicated for customers in this window. While carriers quickly introduced new two-year plans, there are a number of customers who managed to sign a three-year contract during this transition period. These longer contracts have also been cut to 24 months by the CRTC, but an early termination fee may still apply if the contract has not run a full two years and carriers will be permitted to get back their device subsidy if you have not yet paid off your device.

If you like your current carrier, you can stay on your existing contract and nothing will change. If you are ready to leave for another provider, you will need to calculate the termination fee you are likely to owe when you cancel service.

If you accepted a device subsidy to reduce the cost of your device, here is the formula to determine your payoff amount:

Jane Smith signed a contract with Rogers in the late fall of 2013. She is now about 20 months into her contract, which the CRTC has now automatically shortened from its original three years to two. For our purposes, let us say she received a device subsidy of $240 (the exact amount of the device subsidy you received is available from your provider.)

Carriers like Vidéotron offer customers discounts if they bring their old device along.

To calculate the payoff amount to buy out and cancel the contract, take the original device subsidy and divide it by 24. In our example, that equals $10. That means for each month Jane has been in her contract, she has repaid $10 towards the $240 subsidy she received. In this example, she has made 20 payments under contract, which means she has paid back $200 and still owes an additional $40. When she cancels service to switch to Bell (or whatever other carrier she chooses), her exit fee will be $40.

The CRTC also allows carriers to collect an Early Termination Fee (ETF) from customers who paid for a device upfront or brought their own when they signed a contract. These no-subsidy customers must either wait until 24 months have passed from the contract signing date or pay an ETF of the lesser of $50 or 10% of the minimum monthly charge for the remaining months of the now two-year contract.

Bill Smith brought his old iPhone to Telus and signed a three-year contract at the same time Jane did. The CRTC has already lopped off one year of his contract. He will hit the 24 month mark four months from now, but wants to leave to switch to Vidéotron Mobile today. The minimum monthly charge on his Telus bill is $65. For the remaining four months on his contract, he has to pay 10% of $65 for his termination penalty, which amounts to $26 total — his ETF.

Howard Maker, chief executive officer of the CCTS, said, “The calculation is maybe a bit challenging, because not all customers’ contracts will indicate what the device subsidy is.”

Some customers have used the impending end of their contracts as a tool to negotiate a better deal, but it can be tough finding one. After the demise of the three-year contract, last fall many Canadian cell providers raised the monthly price of service on two-year contracts to recoup lost profits.