Why are companies allowed to use "unlimited" as a term for 2GB of data?

Anna Scantlin
Contributing Editor from  Kansas City, MO
| Published: January 16, 2013


In not-so-surprising news, it turns out that Straight Talk’s “unlimited” data plan for the iPhone 5 (and iPhone 4S) is just like the majority of data plans being offered in the U.S. right now and becomes throttled after 2GB of data usage. While this isn’t necessarily unexpected from those of us already in the industry, those who aren’t familiar with such throttles may be surprised when their service gets shut off for excessive usage.

While Straight Talk’s $45 unlimited data plan is nothing new to the company, the fact that they were willing to make that compatible with the iPhone 5 was something that a lot of people were looking forward to. $45 a month seems like a steal compared to today’s market as you certainly can’t find those prices with some carriers like AT&T and Verizon. However, if something seems too good to be true it probably is and Straight Talk is no exception to the rule.

While 2GB isn’t that bad of a deal for the casual phone user, if you upgrade to an iPhone 5 you’re probably doing so because you want to take advantage of the faster download speeds - even though you can't use LTE on Straight Talk's service, many claim that they get HSPA+ speeds, which is still better than 3G. However, by being capped at a measly 2GB, even a casual user can get carried away with how much faster the download speeds are and might use the phone a lot more than they normally would while on a 3G device. I myself only use my phone’s internet while connected to WiFi unless I absolutely have to use 3G because it’s so slow; my data usage is very minimal on a 3G device. However, when using an HSPA+ device I had no issues running on cellular data alone. This is where data caps get dangerous.

For somebody who is under the impression that they have virtually no data cap, the results can be devastating. You use the phone as often as you’d like, and once you hit 2GB you experience what’s called a “throttle”, which means instead of getting the sweet HSPA+ speeds you’ve been using, you end up getting stuck with internet that can barely load a simple web page. Even if you’re patient enough to put up with such slow speeds and you decide to keep using data, you can expect to be shut off relatively soon because man, you are just using too much data.

I always recommend that people read the fine print of a plan because of these misleading advertisements; but even the fine print can make things purposefully confusing or difficult to understand. They use a lot of filler content and often the print is too small to read. Sometimes the fine print doesn’t even make any sense. Straight Talk’s disclaimer is pretty puzzling in itself, since according to it you aren’t supposed to download apps, stream television content, or tether. Yes, I would say that by taking everything a smartphone can do and throwing it out the window makes 2GB a pretty reasonable cap to stay under. You are basically buying a Mercedes-Benz that doesn’t come with a key. You have all the bells and whistles and it can do a lot of things, but you only get the pleasure of looking at it.

The sad fact that advertisements are allowed to call 2GB of data “unlimited” is a laughable offense. I have no doubt that until laws are changed they will continue to manipulate the word to look like it means whatever the public wants it to mean because they’re still making money.

I always thought that frequent churn in a company was a bad thing. If you have people suckered in because they thought they were getting a good thing and it turns out they’re not, a lot of them aren’t going to hesitate to get rid of the service as quickly as they got it. Doesn’t a company lose money that way? While it was nice to see that Straight Talk is stepping it up in terms of offering newer devices, they’re still stuck in that manipulative trap that many contract carriers still face today. But at least you’re only paying $45 for them to lie to your face, right?

Readers, what do you think about calling a data plan “unlimited” when there is actually a cap? Would carriers benefit more if they just flat out said what their true data packages are, or would they see a decrease in customers by being honest? Let me know what your opinions are!