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Posted at 06:00 AM ET, 08/23/2012

Consumer group asks FCC to require more 4G disclosure

Consumer advocate group Consumer Watchdog is asking the Federal Communications Commission to require carriers to list the speed of their 4G networks in advertisements and at the point of sale.

In a petition to be filed Thursday, the consumer group said that while carriers tout their “4G” networks, the definitions of what qualifies a network as fourth-generation are too unclear for consumers to make sense of the designation.

“When it comes to advertising data speed, the cellphone marketplace is like the Wild West. We need the FCC to step up to its role of sheriff and set standards so people can comparison shop without being ripped off and then locked into a two-year contract,” said Harvey Rosenfield, founder of Consumer Watchdog.

The petition asks the FCC to adopt rules that would require carriers to disclose the average data speeds for different regions in their advertisements and give national average data speeds. The proposal would also require the carriers to provide these speed figures at the point of sale when customers buy smartphones or other broadband devices.

There is little guidance on what counts as a 4G network — a problem that technology companies have run into when advertising products, particularly overseas. In the U.S., LTE, HSPA+ and WiMax networks can all be given the 4G moniker, following guidelines set by the International Telecommunications Union.

Jeffrey Silva, an analyst with Medley Global Advisors, said that speed is a key selling point in this market, which has largely become a zero-sum game. And it becomes even more competitive as carriers look to tap into the time consumers spend surfing the Web with smartphones.

“In that environment, that puts pressure on the carriers without subscriber growth to come up with greater revenue through wireless data,” Silva said. “If you can say you have 4G or you have the fastest network, that's a major selling point in this market.”

Silva said the issues reminds him of the coverage map debates that happened with the introduction of 3G technology, when consumer advocates asked carriers to be more transparent about where nationwide consumers could use their phones.

“The idea was to make it as transparent as possible so that consumers could make an educated purchase.”

By  |  06:00 AM ET, 08/23/2012

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