Gadgetwise: Virgin Mobile Changes Pricing

Into the summer squall of new phone plans, add Virgin Mobile (is owned by Sprint), which is changing the price of its no-contract plans. The change raises the prices of two tiers of service but lowers the cost for the unlimited voice plan. Data remains unlimited in all of the plans.

The new plan takes effect on July 20, so you have a week to sign up under the old deal if you prefer it.

Virgin may have found a clever way to raise revenue without rankling users. What Virgin has done is to keep unlimited data and messages on all tiers but raise the cost of voice minutes. So they aren’t “taking away” something or limiting what was unlimited.

The really clever part is this: At most carriers, based on actual use, the lowest tier of data would be enough for most people but the lowest tier of voice minutes wouldn’t. So a greater proportion of customers are likely to need a more expensive plan than if Virgin had raised only the cost of data.

Why? Let’s look at some numbers. These aren’t perfect, just basic back-of-the-envelope figuring to illustrate the point.

Across the industry, basic tiers are commonly set at 200 megabytes and 2 gigabytes. Although demand is growing quickly, very few people now use that much. When you use less than your limit, it is the same as paying a higher rate for the part you do use.

So how much do most people use? A study of 11,000 Verizon Wireless bills submitted to Validas, which analyzes its customers’ bills to match them with an efficient phone plan, found that 96 percent of Verizon smartphone customers used less than the 2GB of Verizon’s minimum tier each month. And 36 percent used less than 75MB of data.

Those numbers are about the same for Virgin Mobile. “Less than 3 percent of our current customers are using more than 2.5 GB per month,” said Jayne Wallace, a spokesperson for Virgin Mobile.

Virgin Mobiles cites 2.5 GB because the unlimited data isn’t exactly unlimited. After using 2.5GB of data, your service slows down, which is called “throttling” and is intended to discourage people from hogging the network.

Now look at the percentage of people who could use the lowest tier of voice service. Virgin said 60 percent of its customers were on the lowest tier voice plan, with the rest split 20 percent each for the middle and top tiers.

So while 97 percent of Virgin’s smartphone users could get along with an industry standard bottom-of-the-barrel data plan, only 60 percent could get along with the cheapest Virgin Mobile voice plan. The disparity in those numbers is where the money is.

Where the new Virgin plan is a better deal is if you really use more than 1200 voice minutes a month, in which case your fees drop from $60 a month to $55 a month. Blackberry users also catch a break. There was an additional $10 monthly fee to Blackberry users, which has been dropped.

There is a potentially less expensive alternative on the Sprint network. Boost Mobile — also owned by Sprint — offers only one monthly service, an unlimited plan for $50 ($60 for Blackberry), but the plan goes down in price if you pay your bills on time.

For each six on-time payments — and they don’t have to be consecutive – the bill is reduced $5 a month, until it reaches $35 a month ($45 for Blackberry). That would be in a few as 18 months if you are good with your payments.

Once you hit a price drop, your monthly fee remains at that rate, even if you miss a subsequent payment. Once you’ve lowered it, it stays there as long as you keep your account active. Of course, you do have to pay full freight for your phone, which ranges from $50 to $200.

Verizon Landline Unit at Heart of Strike

Verizon employees picketed in front of the company’s New York corporate office on Monday.

The unions’ refusal to believe Verizon is one reason, labor relations experts say, that the 45,000 workers who went on strike Sunday are already dug in and braced for a lengthy walkout. Heightening the stakes, some industry analysts say Verizon sees the weak economy as a prime opportunity to chop union costs. Verizon has repeatedly stressed that it needs to cut costs in its landline business because that division’s customer base and profit margins have fallen over the last decade. Many consumers have dropped landlines in favor of competing options like mobile phones, cable and Skype.

Verizon officials describe its heavily unionized landline division as a laggard, while Verizon Wireless, a largely nonunion joint venture in which Verizon is majority shareholder, is hailed as the shining star, its hefty profits lifting the rest of the company.

In the first six months of this year, Verizon Wireless had operating income of $9 billion, the company reported, while its landline business had operating income of $606 million.

In defending the company’s push for concessions — including a pension freeze, fewer sick days and far higher employee health contributions — Verizon’s chief executive, Lowell McAdam, said in a letter to employees, “The existing contract provisions, negotiated initially when Verizon was under far less competitive pressure, are not in line with the economic realities of business today.”

Officials with the striking unions — the Communications Workers of America and the International Brotherhood of Electrical Workers — insist that the landline division is doing just fine. They note that its profit margins have increased over the last five quarters and that its FiOS TV and Internet service is growing strongly.

The unions further argue that members in the landline division should not be pressured to accept concessions just because Verizon Wireless is doing better. Union officials maintain that Verizon is seeking concessions worth $1 billion a year or about $20,000 a year per union member.

“It’s true that wireline is losing lines, but many of them are going to Verizon Wireless,” said Robert Master, a spokesman for the communications workers. “And regardless of how many lines they’ve lost, they’re obviously operating as an enormously profitable company. Considering these profit numbers and the huge amount that Verizon’s top executives are being paid, it’s not fair that our members are the ones to have to make sacrifices.”

Verizon officials say that FiOS is not — as the unions say— going to be the financial savior for the landline business.

Verizon’s chief financial officer, Fran Shammo, said Wednesday at a conference that FiOS’s profitability was increasing. But he said that because of the huge upfront costs involved in laying the fiber optic network, FiOS would never be as profitable as the early telephone business, which had little competition.

FiOS, he said, faces a “very fierce competitive environment with the cable companies,” adding, “The legacy core business is a real drag. And we have to fix that cost structure.”

George Kohl, a special assistant to the communications workers’ president, said Verizon used billions of dollars in profits from its traditional landline business to finance its expansion into wireless. Verizon Wireless, he noted, just announced a $10 billion dividend to its shareholders, with $5.5 billion going to Verizon.

“The wireline guys sweated day by day to make the profits to create wireless,” he said. “And now they want to take away the middle-class life from the wireline employees who made the investment in wireless possible.”

Craig Moffett, a telecommunications analyst at Sanford C. Bernstein & Company, said the tables had turned in recent years, and profits from wireless were financing the huge investment in FiOS.

Mr. Moffett agreed with Verizon’s arguments that its landline business was hurting.

“Verizon FiOS is a very good network, but it hasn’t stopped the bleeding in wireline,” he said. “Wireline is a business that is earning about a 1.6 percent return on investment and it has a 7.5 percent cost of capital. It isn’t coming close to earning enough to cover its cost of financing.”

The financials of Verizon’s landline business are not the only set of numbers that company and union are fighting over. Union officials dispute the company’s estimate that each employee receives $50,000 worth of benefits each year. In that number, the company includes $14,700 for medical and dental insurance, $10,900 for retiree health care and life insurance, $10,800 for pension and $7,500 for time off.

Union officials say total benefits average $25,000 a year. Mr. Kohl, the union official, disputed the $10,800 yearly figure for pensions, noting that Verizon’s annual report said the company’s 2010 contributions to the union’s defined benefit plans “were not significant.” Verizon officials said the $10,800 was an average annual amount.

Mr. Kohl also said the $10,900 retiree health care figure was greatly exaggerated, asserting that many retirees had worked years to pay for that care so the cost should not be attributed to current employees.

Mr. Kohl also quarreled with Verizon saying the value of time off — vacation, sick days and personal days — was $7,500. He dismissed that as double-counting because that number was already counted in wages.

Have a Verizon 4G LTE Phone? Forget About Roaming on AT&T

Brenda Raney Verizon spokesman confirmed yesterday that the telephone company are not compatible with other LTE LTE networks in the U.S. (AT & T and MetroPCS) because they run on different network frequencies. The news means that consumers will face the same contradictions create confusion with the next generation of cellular networks with their existing 3G networks.

LTE phones rely on SIM cards, like the current GSM phones from AT & T and T-Mobile. "But perhaps its design Verizon phones only run on very specific frequency of Verizon Wireless, blocking all the other carriers as possible," Sascha Segan May PC writes "Verizon and AT & T, both to manage their networks in the band 700 MHz LTE . But the Verizon network is first in 746-787MHz, while AT & T will be mainly in the 704-746MHz. "

So, it seems that we should abandon all hope LTE will be a universal standard that magically make life easier for consumers. AT & T, which has not yet announced LTE phones could easily lock down their devices, just like Verizon. LTE and other networks, including existing and Cricket and MetroPCS LightSquared future configurations, perform the Verizon completely different frequencies.

Segan also stressed that the international situation is even worse LTE, with a multitude of possible frequencies that can be impossible to sustain with the current LTE antennas. Like the United States, someone could build a device that roams through all the competing networks, but this seems unlikely given that carriers seem so indifferent to cross match.

Filed under: Science and Technology, Mobile Venture Beat,

Copyright 2011 Venture Beat. All rights reserved.

End near for endless data use on smartphones (AP)

FILE – In this Feb. 10, 2011 file photo, Chris Cioban, manager of the Verizon store in Beachwood, Ohio, holds up an Apple iPhone 4G. Verizon Wireless,

SAN FRANCISCO – When Verizon Wireless kills off its unlimited data plan for new smartphone customers on Thursday, it will mark another blow for endless Web surfing and video streaming.

The move by the nation’s largest wireless carrier has long been anticipated. More people are switching to smartphones and using an increasing amount of data for all manner of wireless activities. The shift could help wireless carriers ensure that they can handle the traffic flowing over the new higher-speed “4G,” or fourth-generation, data networks they’re rolling out.

AT&T Inc. and T-Mobile USA, the second- and fourth-largest U.S. carriers, respectively, have already set limits on monthly data usage. AT&T uses tiered data plans like the one Verizon is rolling out, while T-Mobile slows data speeds for unlimited data plan customers who use up their monthly allotment. Sprint Nextel Corp., the country’s third-largest carrier, still offers an unlimited plan.

The death of unlimited wireless data is happening as service providers see an explosion in data usage, due mainly to an ever-growing number of smartphone users. According to market researcher comScore Inc., 77 million people in the U.S. had smartphones in the first three months of the year — up 11 percent from a year earlier. And according to a Nielsen study, smartphone users’ average data growth climbed 89 percent to 435 megabytes in the same time frame.

Simply put, there’s more profit to be made with capped data plans. Steve Clement, a Pacific Crest Securities analyst, said this growth just won’t work with a fixed-pricing model over time, so to make money from the surging traffic the carriers have to try something else.

By moving away from unlimited plans, the carriers can profit more from the heaviest data users. And, as RBC analyst Jonathan Atkin pointed out, by offering low-level data packages — such as the 200 megabyte plans that T-Mobile and AT&T offer — they can bring in more smartphone users.

Part of the move to capped data is to get consumers accustomed to the idea that data isn’t a limitless resource. If carriers didn’t move to usage-based data plans while rolling out newer speedy data networks, the networks would get abused, Zachary Investment Research analyst Patrick Comack said. And while the pricing of Verizon’s network is higher than AT&T’s, its service is speedier, so it can charge a premium for now.

Verizon Wireless’ current unlimited plan costs existing users $30 per month. With the new plans, smartphone users will choose between paying $30 for 2 gigabytes, $50 for 5 gigabytes or $80 for 10 gigabytes of monthly data usage. Customers who use more than their allotment will be charged $10 more for each additional gigabyte.

AT&T, meanwhile, charges $25 per month for 2 gigabytes of data and $45 for 4 gigabytes. The over-allotment fee is the same.

Verizon and AT&T say much of the move away from unlimited data plans has to do with making users pay for the data they really use.

“If you drive a car, you drive 50 miles, you pay for gas for 50 miles,” Verizon Wireless spokeswoman Brenda Raney said.

AT&T Inc. spokesman Mark Siegel said customers told the company that they wanted a choice instead of just having one unlimited plan for $30.

How are customers likely to react to the new plans? It depends.

Current Verizon smartphone users will not be affected, regardless of whether or not they have a long-term contract with the company.

And given that 95 percent of the company’s current smartphone users use less than 2 gigabytes per month, chances are that most of the newcomers — which includes new customers and existing ones trading up to a smartphone — won’t be affected by the change.

At AT&T Inc. the picture is similar: Siegel said 98 percent of smartphone customers use less than 2 gigabytes in a month.

Neil Strother, an analyst at ABI Research, believes caps on data usage will make things more confusing for consumers. Carriers will have to be increasingly transparent about what data caps mean and help them keep tabs on how much data they use. The carriers do offer online data calculators and alerts that customers can use to learn about how they use data.

“I think the issue for most people is they just don’t want to have that surprise bill,” Strother said.

The most recent changes don’t mean that data plans will always look this way, though. Some analysts suggest that carriers might eventually offer different speed tiers, perhaps charging more to always use a 4G network, or having customers start off using their 4G network and then switching to the slower 3G network after hitting a monthly data-usage allotment. T-Mobile’s existing unlimited data plan flirts with this idea already.

Strother expects to see some experimentation, saying the carriers will likely try different pricing models in order to keep themselves and consumers happy.

“Frankly no carrier wants a block of their customers to say, `I don’t like this, I’m moving to the other guy.’ They want to keep you,” Strother said.

FCC asks AT&T about spectrum claims (Reuters)

Reflections are seen in the window of an AT&T store in New York

WASHINGTON (Reuters) – Federal telecommunications regulators have asked AT&T Inc for more information on its planned merger with T-Mobile USA, including claims on spectrum shortages, coverage overlaps and plans to close facilities.

AT&T's plan to buy T-Mobile USA from Deutsche Telekom AG for $39 billion has been attacked as a bad idea because it would further reduce the number of wireless carriers.

The Federal Communications Commission, in a filing posted on its website on Friday, asked the companies for all analyses and plans it had drawn up to deal with spectrum shortages.

AT&T, the second largest wireless carrier, had cited spectrum shortages as the key reason for its decision to buy T-Mobile USA, the fourth largest U.S. mobile provider.

The deal would vault AT&T over current market leader Verizon Wireless, a joint venture of Verizon Communications and Vodafone Group Plc.

The FCC, which must approve the deal for it to go forward, asked for information about under-used capacity, and the companies' future plans. It also had questions about whether subscribers who changed to another company did so because of pricing issues or service quality.

The agency asked for a list of areas where AT&T would no longer need to arrange roaming agreements.

The FCC said it wanted AT&T and T-Mobile USA to provide any plans it had drawn up to raise prices or change other terms for providing "backhaul" — the wired network that connects cellular towers — to small carriers.

This issue has been hotly discussed as smaller carriers say they fear that a bigger AT&T would charge them more for leasing wired connections to their cellular towers — potentially pricing them out of the market.

AT&T has sought to allay those worries by saying that also must buy backhaul, and that it is good business for them to continue selling it.

Among other points, the FCC asked for information about coverage overlaps between AT&T and T-Mobile USA's network — where cell sites or other facilities would be consolidated and or decommissioned as a result of the merger.

In addition to the FCC, the Justice Department must approve the deal. AT&T notified five states about it. Louisiana has said it will open an investigation of the deal while California is also mulling a review.

If approved as proposed, the deal would concentrate 80 percent of U.S. wireless contract customers in just two companies: AT&T/T-Mobile and Verizon Wireless. Additionally, critics say the loss of discount carrier T-Mobile USA could lead to higher prices for consumers.

Critics of the deal include No. 3 U.S. mobile provider Sprint Nextel.

(Editing by Richard Chang)

Carriers to revamp tablet service pricing (Reuters)

An Apple store employee gives a class on how to use the new iPad 2 during the China launch at an Apple Store in central Beijing

NEW YORK (Reuters) – Mobile service providers are reworking charges for wireless connections on tablet computers to lure in customers put off by costly fees.

Carriers see tablets like Apple Inc's iPad as key to revenue growth. But high prices for the devices and more fees on top of phone plans are seen pushing consumers to bypass the cellular network and rely on free Wi-Fi services.

This is expected to result in a drop in the percentage of tablets supporting cellular, potentially making operators less relevant as tablet distributors than electronics stores.

"The tablet's more natural point of sale is retail," Nvidia Chief Executive Jen-Hsun Huang told the Reuters Global Technology Summit this week. "The question is whether carriers will find a reason to bundle tablets with other services and create a subsidy model that is really appealing."

Today, carriers limit cellular Web use on tablets by charging for each gigabyte (GB) of data downloaded. For example, Verizon Wireless charges $20 per gigabyte and AT&T Inc charges $25 for two. Sprint Nextel subsidizes tablets but charges more per gigabyte and requires long-term contracts.

Such arrangements will gradually result in more consumers opting for Wi-Fi-only tablets, according to iSuppli, which sees sales of tablets with cellular connections falling as low as 30 percent of the total in 2015 from about 60 percent in 2010.

To avoid being sidelined, some operators are planning changes.

France Telecom says it will be ready to change pricing "soon." Verizon Wireless said it would make changes eventually but was careful not to provide a timeline. Orange, France Telecom's mobile service, is looking at offering a data plan shared between smartphones and tablets.

"Shared bundles may be an answer for these customers who don't know how much they will use on the go," Anne Bouverot, head of mobile services for Orange, told the summit in Paris.

Verizon Communications sees its mobile venture Verizon Wireless taking the concept a step further by letting families share data service plans across different devices in the same way that today's voice service plans allow family members to share a bucket of phone call minutes.

"I think it's safe to assume that at some point you are going to have mega-plans (for data) and people are going to share that mega-plan based on the number of devices within their family," Fran Shammo, Verizon's chief financial officer, said at the summit in New York. "That's just a logical progression. When we get there, I have no idea."

SHARED/SESSION PRICING

Other pricing options will involve the sale of tablet connectivity for limited time periods, an executive for Sprint Nextel, the No. 3 U.S. mobile provider, said.

"What you'll see is the ability to buy sessions — a day, a month or a week pass," David Owens, vice president for product development at Sprint told Reuters ahead of the summit. The industry could move this way in the coming months, he said.

Because consumers use tablets more sporadically than smartphones, the plans need to reflect this.

"This is not a product like a handset where you have to always be tied to a network connection," Owens said.

Other operators like AT&T Inc, which will become the biggest U.S. mobile provider if its plan to buy T-Mobile USA succeeds, were less vocal about the need for change.

John Stankey, AT&T's head of business solutions said AT&T's tablet plans are already "very consumer friendly" because while the operator does not pay a subsidy to reduce the price of the device, neither does it require a long-term contract.

But he said AT&T could possibly provide subsidized tablets in future to consumers who subscribe to a long-term contract.

Analysts say operators need to make changes, either by making the device or the service cheaper.

"In the absence of higher subsidies or lower connection fees, the logical channel is not the carrier," CCS Insight analyst John Jackson said, ahead of the summit.

Tablet makers, trying to challenge the dominance of Apple's iPad, could also be hindered if the carriers charge too much. Rival tablet makers include Samsung Electronics Co and Motorola Mobility and computer makers like Huawei Technologies and Dell Inc.

Even if carriers subsidize iPad rivals, "consumers might not want to lock themselves into an iPad competitor" that could end up being upstaged by the next iPad, Gartner analyst Michael Gartenberg said. "The carriers have a long way to go to figure out the right business model."

(Additional reporting by Leila Abboud in Paris, Noel Randewich and Poornima Gupta in New York; Editing by Gary Hill)

Could Over-the-Air iOS Updates Brick Apple’s iPhone? (NewsFactor)

Apple and Verizon Wireless are planning to over-the-air downloads of 5th IOS News broadcasts are heralding the end of the day, when users connect an iPhone to a computer and get a link to iTunes to the latest version of the mobile operating system.

Over-the-air downloads are nothing new. Google Android phones make it. Microsoft Windows Mobile phones do. Hewlett-Packard Palm devices do. So why not Apple?

Michael Disabato, executive vice president of network and telecommunications at Gartner, may consist of several reasons why the over-the-air downloads of IOS 5 would be a bad idea.

Reliability problems

"AT & T network is not reliable enough for me that a 200MB file directly to your phone – the same with Verizon," said Disabato."Even if they put in the operating system that does not mean that network operators will happen admitted -. And if they are smart, they will not be the day Apple released it announced iOS messages that would half the population iPhone try to download, and it crashes on the network. "

While downloading an over-the-air is interesting that it eliminates the need for iTunes in the process of updating to do without Disabato Apple does not control. Update applications on air is one thing, he says, but the updates on the air of the operating system is different.

A "dangerous" Concept

"IOS is a huge file. It took me 18 minutes yesterday evening with a download link to six megabits per second. You do not get six megabits per second over the air," said Disabato."So you're after an hour to download the update from your phone, and may stop in the middle and the brick phone. Then you must connect the phone to iTunes to download."

As Disabato see, would have over-the-air must be bulletproof, unsinkable for people to even attempt the feat – and after the first horror story, nobody would do it again. In essence, if any part of the download is damaged on the way, turns the iPhone into a neat block. It can happen on a wired download too, but it is much less likely.

"It is dangerous. The first thing that happens when you perform an upgrade IOS? It supports the phone. What do you think back to the phone if you download over-the-air? If you don ' not have a backup, then you brick your phone. You can go to the Apple Store and the phone unbricked, but you do not have a backup of your data, "said Disabato."I think this is incredibly bad idea and I do not see Apple allow it."

Laptop Users Still Prefer USB Modems (PC World)

Mobile data users still overwhelmingly prefer USB modems for keeping PCs and other devices connected on the go, but they may turn more to built-in cellular radios and portable Wi-Fi hotspots over the next five years, according to ABI Research.

Despite the growing market for connected tablets and the availability of laptops and netbooks with high-speed cellular modules built in, worldwide shipments of USB modems still surpass embedded 3G and 4G modules by three to one, ABI said in a report Monday. But by 2016, that ratio may change to near parity, said ABI analyst Jeff Orr.

Mobile operators including AT&T, Verizon Wireless and Clearwire give shoppers the option of buying a laptop or netbook with an integrated cellular module. Those computers let subscribers go online almost anywhere without using up a USB port or carrying around a separate piece of hardware that sticks out of the side of the system.

Built-in modems lock buyers into one carrier or network technology for the life of the device, which most consumers and enterprises don't want, Orr said. They buy USB modems because they can be easily discarded when a better network comes along, he said. Prices are low and often there is no early termination fee for getting out of the carrier data contract.

"That device becomes almost disposable," he said.

One problem with built-in modems is that wireless technology changes faster than most users want to change computers. For example, the past three years — a typical PC lifetime — have seen the construction of both a WiMax and an LTE network in many cities around the U.S., offering 10 times or more the speed of 3G networks.

The market for embedded modems is still fairly small, according to ABI. In 2010, only about 5 percent of laptops worldwide shipped with built-in cellular modems, Orr said. Among netbooks, 17 percent came with modems, but overall shipments were much smaller for netbooks than for laptops. Meanwhile, 40 percent of tablets came with such modems, but the overall tablet market was smaller still.

But embedded modems could start to gain popularity as tablet sales grow and as the incremental cost of the modems shrinks, Orr said. One thing that could cut that price is shifting some of the cost to an activation fee paid only if the customer decides to sign up for service, he said. There are already laptops available from U.S. electronics retailer Best Buy with WiMax built in, with no requirement for the buyer to sign up for Clearwire service.

Meanwhile, portable Wi-Fi hotspots that use cellular data networks may dwarf both embedded and USB modems by 2016, Orr said. These allow users to connect several devices to the 3G or 4G network simultaneously and pay only for one data plan. All that's needed on each device is Wi-Fi.

Stephen Lawson covers mobile, storage and networking technologies for The IDG News Service. Follow Stephen on Twitter at @sdlawsonmedia. Stephen's e-mail address is stephen_lawson@idg.com

Wireless carriers get consent to use location data (AP)

WASHINGTON – The nation’s four largest wireless carriers say they obtain customer permission before using a subscriber’s physical location to provide driving directions, family-finder applications and other location-based services, and before sharing a subscriber’s location with any outside mobile apps that provide such services.

But in letters to Congress released Thursday, the wireless companies also say they have no power to require device makers like Apple or independent developers of location-based apps to get similar user consent if these apps don’t rely on the carriers themselves to track a user’s whereabouts.

“While new third-party applications bring many consumer benefits, there are risks too,” Kent Nakamura, vice president for policy and privacy for Sprint, wrote in a letter to Reps. Joe Barton, R-Texas, and Ed Markey, D-Mass. “And because mobile devices are now an open platform, consumers can no longer look to their trusted carrier … to answer all of their questions.”

The letters from the four carriers — AT&T Wireless, Verizon Wireless, Sprint Nextel and T-Mobile USA — were released one day after Apple admitted that its popular iPhone stores data used to help the device locate itself for up to a year. Faced with an uproar among privacy watchdogs and lawmakers after two researchers revealed iPhone location tracking practices last week, Apple said Wednesday that it will no longer store the data on phones for more than seven days, will encrypt the data and will stop backing up the files to user computers.

Google, too, acknowledged last week that phones running its Android software store some GPS location data for a short time.

Privacy watchdogs warn that location data that gets stored over time can provide a window into very private details about a person’s life. Databases filled with such information, they fear, could become inviting targets for hackers, stalkers, divorce attorneys and, of course, law enforcement agents.

Representatives from both Apple and Google are expected to testify at a Senate Judiciary Subcommittee hearing on the matter next month. The Senate Commerce Committee is also planning a hearing.

Despite this week’s intense focus on location privacy, the letters from the four big wireless carriers are actually in response to requests for information issued by Barton and Markey in late March.

The lawmakers asked the wireless companies to explain their policies for handling location data after The New York Times reported that a Deutsche Telekom customer had discovered that the German phone company had kept detailed information about his phone’s location over a period of months. Deutsche Telekom owns T-Mobile USA, but is seeking to sell the company to AT&T.

One theme running through the letters released Thursday was that the wireless carriers all comply with federal rules that prohibit phone companies from using customer data — including location information — for purposes other than providing service, or from sharing it with outside parties, without first obtaining subscriber consent.

But those rules do not encompass device makers such as Apple, software providers like Google or mobile apps. Although many apps rely on cell tower triangulation provided by wireless carriers to determine a user’s location — and may therefore be indirectly bound by federal rules — many others depend on GPS technology, Wi-Fi hot spot databases and even Internet Protocol addresses to pinpoint a user’s location. Right now, few government privacy rules apply when those technologies are used.

Companies are experimenting with various approaches to help users understand that locations are being tracked. Popular apps such as the social networking service FourSquare asks users to actively “check in” to the places they visit. Many also notify users that they collect location data — and require users to agree_ before an app can be downloaded. Apple requires iPhone apps to obtain user permission to gather location information

Meanwhile, CTIA -The Wireless Association, the wireless industry’s top trade group, has developed a voluntary set of industry guidelines to ensure that location-based services adequately notify consumers about location tracking and obtain consent.

Still, government officials may get involved. The Federal Communications Commission is looking at what rules could — and should — apply. The issue is also on the radar screen at the Federal Trade Commission, which wants to ensure that apps and other mobile services that gather location data do so with the full understanding and permission of users. And Barton hinted Thursday that Congress may weigh in too.

“After thoroughly reviewing the responses from the wireless carriers, I am left with a feeling of uneasiness and uncertainty,” Barton said in a statement. “The companies informed us that customer consent before access of location data is a common practice, but the disconnect is when third-party applications come in to play … It is time we hold third-party developers accountable, and I am determined to work with other members of Congress to get this done.”

Verizon’s New 4G Mobile Hotspots: Which One Works Best? (PC World)

Mobile hotspots like Novatel’s popular MiFi 2200 have been greeted warmly by tech users and have sold well. They simplify things by providing our various devices with Internet connectivity under one data service bill. And they’re small and superportable.

But mobile hotspots have often connected devices to the Internet at relatively slow speeds, until now. A pair of new mobile hotspots that run on Verizon’s fast new 4G LTE network–Samsung’s 4G LTE Mobile Hotspot and Novatel’s MiFi 4510L–have become available, and they truly do live up to being ten times faster than their 3G predecessors.

The two devices and their accompanying data plans are priced the same. The hotspots each sell for $100 with a two-year contract at the Verizon Wireless site. For data service, you can buy a 5GB plan for $50 per month or a 10GB plan for $80 per month. Both plans charge $10 for every gigabyte of data you use over your monthly limit.

So which device is the better buy? I break them down feature by feature and pick a winner at the end (feel free to skip down). In a nutshell, I found a number of small differences–and one big one–that might make all the difference when choosing between the two.

Battery Life

Advantage: Samsung

Let’s get right to that “big difference”. By far the biggest complaint about these 4G hotspots (4G phones, too) is battery life. It seems that when connected to fast 4G service, hotspots simply need more juice than when in 3G mode. To test the longevity of the batteries in these two devices, we streamed a movie continuously to a hotspot-connected device until the battery in the hotspot failed.

Here the Samsung outperformed the MiFi. Samsung says its hotspot battery will last for “up to 226 minutesâ€

Meanwhile, Novatel says the battery in its LTE hotspot will last “up to 5 hours." In our tests the MiFi came nowhere near that estimate, running out of gas after just 3 hours and 6 minutes.

But regardless of the manufacturers’ projections, the battery life of these devices is clearly lacking. The companies that make the 4G radios inside these devices must begin to use components that require far less power, or the battery makers need to learn how to make batteries that last longer. A hotspot capable of a full day of work would seem to be a reasonable expectation, and until that expectation is met, consumer adoption of hotspots will have a real ceiling.

Despite battery conservation being so important to using these devices, neither Samsung nor Novatel offers a very accurate way to monitor your battery use.

The tiny LED light on the Samsung hotspot stays green until the battery gets down to 20 percent, then turns yellow. But the two colors look so much alike, and the LED lights are so small, that I never noticed when they changed color.

The battery indicator on the MiFi uses the same four-bar icon as some phones. So it at least changes every time another 25 percent of battery life has been used, making it easier to know how much of that big 3 hours and 6 minutes of battery life you have already consumed. The MiFi thankfully gives you about 2.5 minutes of grace time after the last bar disappears before shutting down.

Well aware of the limited battery times, both Novatel and Samsung built into their devices an auto-shutoff feature that powers down the device after 30 minutes of idle time. Many people actually complained about this in the product reviews at the Verizon site, apparently unaware that you can shut it off in the configuration settings.

Size

Draw

Both LTE devices take up just a few millimeters more table space than a credit card. The MiFi is more than half an inch thick, while the Samsung is a little less than half an inch. The MiFi weighs 3 ounces, and the Samsung weighs 2.7 ounces.

Ease of Setup

Draw

Both hotspots are pretty much plug-and-play. No software installation is required (the drivers are installed in connected devices automatically), and neither is any configuration (although, of course, you can adjust the settings).

The set-up process for the Samsung and the MiFi is almost identical. After you power up the devices, they automatically connect to the Internet via an LTE cellular connection (provided you have an active SIM card inserted correctly underneath the battery). Once connected to the Verizon network, the hotspots then send out a Wi-Fi signal to connect your devices to the Web.

When that signal is detected by your laptop or smartphone, you’ll see the name of the hotspot listed in the “available networks” list. After you select the hotspot from the list, you’ll be asked to type in the network password, which is supplied in the literature and printed on a sticker underneath the back panel.

And that’s it–you’re connected. You can repeat this process with up to four other devices, but remember that the devices are sharing the same pool of bandwidth that the hotspot is pulling down from the network. Thankfully, with LTE service that pool is pretty big. To monitor your data usage you can log in at www.verizon.com/myverizon.

Interface and Ease of Use

Advantage: MiFi

On the front of the Samsung you’ll find three small status lights, one for 4G network connection status, one for 3G network connection status, and one for the status of the Wi-Fi signal that the hotspot is sending out to connect other devices.

The 4G light is green if the signal is strong, yellow if the signal is weak, and red if there’s no signal. If the light is rotating through the colors, that means you’re roaming. The 3G light uses the same colors for the same meanings. The Wi-Fi light is blue for connected, blinking blue when transmitting data, green for standby, and blinking green if the device is in setup mode.

The power button on the front is also filled with meaning. It’s solid green if the battery is more than 20 percent, solid yellow if the battery is 6 to 20 percent, and solid red if the battery is down to 1 to 5 percent of capacity. You press and hold the power button for 2 seconds to turn the hotspot on, and for three seconds to turn it off.

Novatel’s MiFi has somewhat simpler status indicators. The top screen has a four-bar signal strength indicator, a triangle-shaped roaming indicator, a four-bar battery indicator, and a five-dot indicator to show how many devices are connected. The LED light on the front side of the device offers more device status information. Amber means the hotspot is in standby mode and may be charging. Green means 4G service is on, and violet means 3G service is on; in both cases, if the light is blinking it means data is being transmitted. A red light means a SIM card error has occurred.

Speeds and Latency

Advantage: Samsung

As I mentioned up top, these two devices are different and better than any other mobile hotspot on the market because of their connection speeds. Verizon says users should expect download speeds of 5 to 12 megabits per second (the average home broadband connection speed is 6 mbps), and upload speeds of 2 to 5 mbps.

To test this, I connected my PC to each hotspot, and then ran the speed and latency test at speedtest.net, operated by Ookla. I found that both devices regularly met or exceeded Verizon’s speed projections, even in a difficult cellular environment (well inside a structure with several physical barriers between the radio and the outside).

From my desk at home, several of the 3G hotspots I’ve tried couldn’t establish a connection because it’s a very difficult cellular environment. I have to use an amplifier even to get wireless voice service. Of the two 4G hotspots in my home tests, the Samsung connected at slightly higher speeds than the MiFi, although the difference is so small that it might not be significant.

The Samsung clocked an average download speed of 12.1 mbps and an average upload speed of 4.1 mbps. However, I saw download speeds of up to 20 mbps during my tests, and upload speeds as high as 15 mpbs. The average latency or (network delay time) was impressively brief, at only 54 milliseconds on average.

The MiFi clocked an average download speed of 9.4 mbps and an average upload speed of 4.5 mbps. But with the MiFi, too, I saw some very high peak speeds, meaning downloads of up to 17 mbps and uploads as high as 7 mbps. Latency speeds were even better on the MiFi, averaging a mere 50 milliseconds.

I also tested connecting to the hotspots from long range, by moving my PC to a position 30 feet away in an adjacent room. I first selected the Samsung hotspot from the list of available networks on my PC. The Samsung paused for perhaps 30 seconds before it could begin transferring data. Once a connection was established, the Samsung connected the PC at just 0.80 mbps for downloads and 1.1 mbps for uploads, on average.

The MiFi performed somewhat better than the Samsung at long range. In my test, the MiFi began transferring data almost immediately, and connected at higher speeds: an average download speed of 2.5 mbps and an average upload speed of 1.5 mbps. This may suggest that the Wi-Fi signal emitted by the MiFi is a bit stronger than that emitted by the Samsung.

But since most people won't need to stray so far away from their hotspot, and because the Samsung did get the best speeds overall, Samsung wins the speed category.

Dual-Mode (3G and 4G)

Draw

Both devices are backwards compatible with Verizon’s 3G service (CDMA 1xEV–DO Rev.A), meaning they downshift to a slower (in this case, much slower) 3G connection when the 4G LTE signal is not available. I noticed no interruption in connection when either device moved back and forth between 3G and 4G, although the devices were connected to 4G service most of the time during testing.

Bottom Line

The good news about both of Verizon’s new LTE hotspots is that they are fast—truly 10 times faster than 3G hotspots–and deliver a much bigger pool of bandwidth to the devices that will connect them. That’s huge.

In our speed tests, we found that both devices delivered impressive speeds, with the Samsung hotspot testing marginally faster overall.

The apparent cost of the fast 4G service is battery life. The LTE technology inside both the Samsung and the MiFi drained battery life in a hurry. But our tests show that the Novatel MiFi simply doesn’t operate as long as the Samsung on one charge of the battery.

So while the Samsung definitely has its defects, its slight superiority in throughput speeds and its clear superiority in battery usage earn it the nod as the better of the two Verizon LTE hotspots available now.