Consumers are fine with usage-based pricing for wireless data but are confused by their plans nonetheless, according to a new report from a government watchdog. The report, from the Government Accountability Office, found that consumers are generally much more concerned about usage-based pricing and data caps for their home broadband service than for their wireless service. The GAO is the investigative arm of Congress.
The GAO held a total of eight focus groups with consumers in Baltimore; Des Moines, Iowa; Las Vegas; and New York City. The focus groups contained a mix of ages, races, genders and education and income levels. Each group contained nine to 10 participants (77 in total).
The focus group study found that most consumers are still confused about their wireless usage and plans, despite tools from wireless carriers that estimate the data used by emails, web pages and videos. Participants expressed uncertainty over their plan details, such as their data allowance, as well as about whether their plans were subject to throttling. All four Tier 1 wireless carriers offer some form of usage-based pricing, though Sprint (NYSE: S) and T-Mobile US (NYSE:TMUS) still offer unlimited smartphone data plans.
Yet the focus group participants expressed few serious concerns about wireless usage-based pricing. Their main concerns were focused on overage fees and managing the data usage of other members of their household. The report found, unsurprisingly, that customers have adapted to usage-based plans by limiting their use of streaming video, changing plans, and connecting to Wi-Fi networks.
However, in all eight groups, participants expressed strong negative reactions to usage-based pricing for wireline Internet, and were especially concerned about having to worry about usage at home, where they are used to having unlimited access. Seven of 13 wireline ISPs surveyed offered usage-based pricing to some extent. Participants also expressed concerns that ISPs would use wireline usage-based pricing as a way of increasing the amount they charge for Internet service. Their negative reactions were driven in part by confusion about the amount of data used by Internet applications. Article