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An ‘E’ For Evading The Truth

a stand-alone AT&T store at sunset.
photo by Mike Mozart

While a rose by any other name would smell as sweet, 4G cellular networks are much less charming when providers call them “5G.”

I recently performed a routine software update on my phone. Shortly after, I started noticing a small “5G E” label appearing where I once saw 4G or LTE indicators. I live in Atlanta, and I knew that AT&T had announced my city would be part of its first round of test markets. So I assumed the software update had given me access to the new generation of cellular technology.

When I went to try out the network, however, I was underwhelmed. Instead of lightning-fast speeds, I experienced streaming video at more or less the same speed I’d experienced for years.

I decided to make sure I was not the only one experiencing this confusion. I asked my colleagues in Palisades Hudson’s Atlanta office whether they’d seen the 5G E indicator, and if so, whether they’d noticed any change in performance to go with it. At least one of them had the same experience I did: new logo, old speeds. Then Vice President Paul Jacobs, who wrote about 5G in this space not long ago, alerted me to the fact that my phone is not even capable of connecting to a 5G network. I have a Samsung Galaxy S8 Plus; while AT&T and Samsung have promised 5G-capable phones sometime in 2019, I definitely do not have one yet. So what’s the deal with the 5G E icon on my very non-5G-equipped device?

It turns out I am not the only one who wants to know.

AT&T’s website describes “5G Evolution” (thus the “E”) as “our first step on the road to 5G.” In fact, AT&T has branded certain parts of its existing 4G LTE network as “5G E,” but for many customers like me, this change doesn’t actually represent significantly faster data. The speeds AT&T advertises for 5G E are only about half of what it cites as maximum speeds for actual 5G. The 5G E icon appears whenever AT&T phones like mine connect to 4G LTE networks that have received certain speed-enhancing updates. These updates are not exclusive to AT&T; other providers offer the same service as “4G LTE Advanced.”

Other mobile carriers were unimpressed by AT&T’s marketing sleight of hand. T-Mobile mocked the ploy on Twitter, posting a short video of someone covering their phone’s 4G LTE icon with a sticky note that reads “9G.” Verizon published a blog post promising never to call its 4G network a 5G network of any sort, and it called on other companies to make the same commitment. But Sprint took things a step further by filing a lawsuit in federal court, seeking to prevent AT&T from using the 5G E label altogether.

In its filing, Sprint cited a study it had conducted, which found that a little over half of the people surveyed thought 5G E was the same as, or even faster than, regular 5G. In addition, 43 percent of those surveyed thought AT&T currently offered a 5G-capable phone. It doesn’t. Sprint’s suit argues that AT&T’s practice is substantially harming the reputation of real 5G among consumers.

AT&T seems prepared to stand firm. In a statement following the announcement of Sprint’s lawsuit, the company said, “We understand why our competitors don't like what we are doing, but our customers love it.” (Obviously, someone from AT&T hasn’t spoken to me.) AT&T claims it has always clearly defined what 5G E is and has provided exactly what it promised. AT&T CEO Randall Stephenson told CNBC, “We feel very comfortable with how we’ve characterized the new service that we’re launching.”

Even if it turns out AT&T has not violated the law – the Federal Communications Commission will determine that point – I believe that it has hurt itself in the court of customer perception. It has also potentially hurt the perception of real 5G among consumers. They can claim all they like that customers will not be confused, but I suspect my story is representative. I try to stay well-informed in general, and I still was not aware of the distinction. If it weren’t for my colleague and the research involved in writing this post, I might have simply assumed I was getting true 5G and that the service was unimpressive.

Part of the reason we have 4G LTE today is the similar marketing tactics surrounding the rollout of 4G. If people think the service they get on their phones already is 5G, they are likely to see little reason to get excited about the rollout of the actual network when it arrives. Nor are they likely to rush out and buy a 5G-capable phone if they think their existing phone already uses 5G.

False advertising can cover a range of behaviors. It may be hard to prove that AT&T is engaging in false advertising, in that the term “5G” is inherently nebulous, serving as an umbrella term to cover a variety of technologies and performance standards. But many other companies have discovered the steep cost of crossing the line between stretching the truth and outright making false claims. Just ask Volkswagen. AT&T may not have gone so far, but the challenge of regaining public trust once it is lost is still daunting, even when it doesn’t come with a steep fine attached.

AT&T wants to win the 5G race, but doing so by confusing and misleading its customers is not the way to go. They may not feel there is a problem with their tactics, but I believe they have a thorny issue on their hands.

Client Service Manager ReKeithen Miller, who is based in our Atlanta office, is the author of Chapter 14, “State Income Taxes,” in our firm’s book, Looking Ahead: Life, Family, Wealth and Business After 55.

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