Murphy's Law: Downloading the AT&T Kool-Aid for $25+ a Month
Murphy's Law: Downloading the AT&T Kool-Aid for $25+ a Month
Posted 06/04/2010 at 8:01am
| by David Murphy
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The current state of the mobile market, contrary to what some tech commenters might be opining, is anything but ponies and roses. It's a lot like coming home from a hard day of work and finding out that your toilet is leaking--leaking all over your floor, that is. You don't really have the tools to fix it, but you do have a healthy amount of duct tape sitting around.
Get where I'm going?
AT&T's announcement that it's eliminating the unlimited data plans for iPhone and iPad owners is but the black, sticky tape covering up a greater disaster underneath. But that's not what the various Internet commenters would have you believe. To them, the charitable AT&T has graciously swooped down to lower everyone's monthly data fees since so very, very few people will ever push past its first-tier pricing scheme of $25 per month for two gigabytes of data.
This is not some charitable reduction that saves 98 percent of AT&T's user base an extra $5 a month. If you believe that, then by all means, let the carrier come marching right up to your front door with a new contract and a shiny golden ticket to Wonka's candy factory. Because that, sir or ma'am, is just the level of delusion we're talking about.
No, AT&T is doing what one might otherwise call, "laying the foundation." Look, Apple has the carrier strapped to the rooftop as its various devices go on a grand road trip throughout the mobile marketplace. And it's no secret that the Cupertino giant might be eying other carriers in a grand effort to end its exclusivity with AT&T once and for all.
Were I AT&T, I'd be doing everything under my power to prepare for the inevitable-including jacking up my fee for abandoning a contract early (done!), cancelling network-killing unlimited data plans in favor of a "pay as you go" strategy for all (done!), and thinking of every possible way to grind blood from the iStone's still-unworkable features (tethering?)
But it would be foolish to say that AT&T's switch to tiered "DataPlus" and "DataPro" lines is, in itself, the network's only real buffer against the future. No, this is just the beginning. Like ISPs, AT&T has seen the light at the end of the tunnel, and it ain't the word, "unlimited." But the company can't just up and switch everyone over to a pay-as-you-use kind of plan, nor can it somehow cut the monthly data allotments of DataPlus or DataPro to an absurd, consumer-angering degree.
So what does it do? AT&T conceals the switch in a discount. Sure, to the average person, that new iPhone contract you just signed up for (once Apple unveils the new device Monday) might appear to save you a crisp $15 to $5 based on the old plan. Awesome right?
Okay. What happens when AT&T begins rolling out its 4G network in 2011? Up go the data transfers. What if some combination of the new iPhone's video camera/multitasking/magical Steve Jobs emulator doubles the phone's bandwidth use? Okay. What happens if Apple releases a slimmed-down version of the iPhone that's just that-a phone with no bundled Wi-Fi whatsoever? In short, you're stuck.
It's betting against the house to think that, over the course of however many months of your restructured iWhatever contract, that there will be no compelling reason for you to increase your bandwidth usage. But even if I'm just making this all up, one fact remains clear: Now that AT&T has let tiered data plans through the door, it's only a matter of time before it starts tightening the noose.
Don't believe me? Then why would you have to pay $20 on top of the data plan (which you're already being charged based on your usage) simply a way to use your iDevice's Internet connection on a given system? Why has AT&T made the switch, now, some 30 days after the launch of the iPad itself (and its widely touted unlimited data plan)? Why the heck are consumers still being charged so much for a freakin' text message?
AT&T isn't selling its users cheaper data plans; it's selling them a grim future.
David Murphy (@ Acererak) is a technology journalist and former Maximum PC editor. He writes weekly columns about the wide world of open-source as well as weekly roundups of awesome, freebie software.
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sotoa
June 07, 2010 at 5:19am
Dear God don't let the other carriers follow. Just when we start "using" our smartphones, they put in limits.
I want to continue downloading my NOBSPodcast and other podcasts with no limits.
I want full true unlimited data and full tethering. Even if I have to pay more. Just don't make me live in fear wondering if I went over the cap.
snapple00
June 04, 2010 at 3:15pm
So that link confirms that 98% don't use over 2 GB, followed by "this or that could change in the future".
Are you just confirming the above post?
snapple00
June 04, 2010 at 1:01pm
"...Why has AT&T made the switch, now, some 30 days after the launch of
the iPad itself (and its widely touted unlimited data plan)? Why the
heck are consumers still being charged so much for a freakin' text
message?..."Why? Because all these idiots gladly pay. No one is going to do anything about it. People just open their wallets and shell out a ton of cash for nothing.
If AT&T can get more out of these tools, I say jack up the prices. Lets see how far people are willing to go.
Righteous Fury
June 04, 2010 at 11:36am
but I just had someone tell me that the EVIL-APPLE-EMPIRE does not allow for tethering Iphone to Ipad... is this true? Will void warranty or service contract or some such?
TheMurph
June 04, 2010 at 2:20pm
Bingo. No iPad/iPhone love for you. Not only does the iPad lack a USB port, but it won't Bluetooth-tether with your iPhone.
But, I mean, come on. Did you really think Apple would let that back door open? ; )
oihorse
June 04, 2010 at 12:20pm
Comes up with a lot of results on this one.
Here is one:
http://www.techflash.com/seattle/2010/06/att_no_iphone-ipad_tethering.html
Righteous Fury
June 04, 2010 at 12:25pm
guess i was doing a bit of, ahem, "trolling" to see if this was common knowledge or not. Today was the first i'd heard of it.
iftegod
June 04, 2010 at 10:57am
This whole discussion reminds me of a Lewis Black bit, where he says the TSA blamed the long lines at airports on all the travellers. And the point he made is true here as well. Its true iPhone/iPad users, its your goddamn fault. How dare you use your ped's that are locked into a single telecom service. I'm no fan of Apple or AT&T, but you people really are @ssholes. Crippling an overwhelmed network with your streaming media and downloads, you f*cktards! This is why there is an AT&T, to make you not want a smartphone. Its not like your paying hundreds of dollars in equipment and monthly usage fees. I hate that you think you can use your electronic devices as advertised. Just remember, if you have one of those devices, its your goddamn fault, you @ssholes.
HVDynamo
June 04, 2010 at 10:20am
Even considering this new tiered service, I think paying for texts separately when you already have a data plan is the worst. I can understand tacking on $20 for tethering if they had truly unlimited service because the likelyhood of data usage increasing as a result is 100%. However with the tiers, tethering shouldn't cost anything extra (except the overages of course because you know that will happen...) In short, they should dump paying for text messaging if you have any data plan, and only charge extra for tethering if they kept the "unlimited" plan.
oihorse
June 04, 2010 at 8:20am
Given the feedback from tech blogs and podcasts most of the populace falls into line with the cheaper data plan. They don't use more than 200MBs a month on their iPhones. $15 is an awesome choice for the vast majority of customers.
The vitriol should be directed in having AT&T and other carriers set-up a truly unlimited plan that the 2% or so who consume vast quantities of bandwidth can pay for if they so choose.
This is almost the same debate as the cable plan versus cable a-la-carte, except roles are reversed - people are villifying the a-la-carte version instead of clamoring for it.
More analysis and less fear mongering, please.
BrandNewJesus
June 04, 2010 at 8:41am
I think he made the point of, for how long is the majority going to only use 200MB, or even 2GB when there could be some major change in the way everyone uses these devices where their data consumption skyrockets even tomorrow/Monday. The point was that they are laying the foundation here.
It has been said that iphone users user a vast amount more data that a regular smart phone user. Maybe once apple is not tied to att and some iphone users switch there will not be as much congestion on the network. just a thought.
I am still pissed about the fact that there is such a huge difference in the tiers. $15 for 200MB and $25 for 2GB is bullshit. They know that for the majority of people right now 200MB is close to enough, if not they go for the 2GB plan, but if it was $13 for 1GB they would lose the people who only use 300MB who are going to have to pony up. AND remember, you were paying $30 for 5GB!
TheMurph
June 04, 2010 at 9:04am
"I think he made the point of, for how long is the majority going to only use 200MB, or even 2GB when there could be some major change in the way everyone uses these devices where their data consumption skyrockets even tomorrow/Monday. The point was that they are laying the foundation here. "
Bingo. I doubt I use 2GB now, but as phones become more advanced / I find new programs to use / multitasking oh god oh god, then I'll be in the perfect position for--one year down the line--paying AT&T up the wazoo just to be able to play Words With Friends Super Turbo HD Edition on my phone.
I digress. The point is that AT&T is giving you the carrot now so they can hit you with the stick later.
oihorse
June 04, 2010 at 10:22am
As data useage grows, with what evidence do you base your assumption that they wouldn't up the cap limits?
It's boogeyman analsysis to presuppose that the 200MB and 2GB cap limit will stay in place once average data use comes close to those caps. If anything, there's more evidence on the side that AT&T will have no problem adjusting the plans given they've adjusted the plan 2 months after being initially announced with the iPad.
Morever, it puts other carriers in a ripe position - should iProducts be released to other carriers - to offer much more compelling plans. In a market that stands to get far more competative, it seems silly to assume AT&T would staunchly refuse to up limits with usage.
Now, if there was actual numbers on how much data video conferencing would take up on the iPhone - I'd understand the arm waving and panic.
Right now it's all smoke and mirrors.
TheMurph
June 04, 2010 at 2:26pm
Raise the caps? You're not trolling, right? This is serious?
Here, I'll play the role of the AT&T Executive:
"Gee, self. We sure have done well at AT&T this quarter. But, wait, it says here in my contract that I get a huge bonus for bringing squillions more dollars to AT&T. Well, with the release of our huge-ass 4G network on the horizon, it seems that users are going to be coming pretty close to hitting our two-gigabyte cap! Well, that's pretty cool! Go technology! Here, I'm going to put in a call to our CEO and see if we can't extend them more bandwidth for the same awesome price they're already paying."
No, I'm kidding. There is no way in heck that they're going to give you more bandwidth when they already have it set up such that you pay them for more bandwidth.
BrandNewJesus
June 04, 2010 at 11:06am
"As data usage grows, with what evidence do you base your assumption that they wouldn't up the cap limits?"They did just lower the cap from 5GB to 2GB, and I can only imagine how much they are going to charge when they put out a 5GB cap down the road. I bet it will be more that $30."...once average data use comes close to those caps."Or, new advances will not be adopted because of these caps. And are you saying that the new caps are good for the ipad? I was under the assumption that jobs really had to fight with att to get that unlimited plan with no contract by giving the ipad att exclusivtivity. That was a big bullet point for the ipad. "Moreover, it puts other carriers in a ripe position - should iProducts be released to other carriers - to offer much more compelling plans. In a market that stands to get far more competitive, it seems silly to assume AT&T would staunchly refuse to up limits with usage."Where do you get the assumption that this market is going to get far more competitive? Look at how much you are paying for text messages! Industry standard. I do hope that we come into some kind of price wars for data, but that just remains to be seen. But like I have posted before, people will vote with their wallets, and if iproducts come to Verizon or other carriers that have a better plan, people will jump ship and AT&T will have to counter.
Time will tell, but judging by AT&Ts track record, I’m on the Murphs side.
Biceps
June 04, 2010 at 10:42am
Large companies like AT&T never ever ever do anything that is not in the best interest of their bottom line, whether that be in the short run or long run.
Murphy has made an excellent argument that AT&T is laying the groundwork for the future, and I tend to agree with him.
To answer your question above, AT&T will absolutely not raise the caps on their bandwidth plans, because the cap is a revenue generating tool. The cap isn't there to stop people from overusing the network - it is there to generate $$ from people who do exceed the cap. Therefore, as usage increases, the cap will stay the same (at least for the forseeable future) and AT&T will start to make some real mula on the overages. When people complain, AT&T will say "Well, stop using so much bandwith!". And the majority of the competition will have followed AT&Ts lead, giving consumers few other choices.
If you still doubt, then look at Comcast. Comcast instituted a 250GB cap, what, 2 or more years ago. Today, you can easily exceed that cap by watching 2 or 3 HD movies on Netflix... so in a day or two. And is Comcast talking about raising their cap? Nope. They are sending out overage bills and raking in the cash, cash, cash.
Nice article, Murphy.
oihorse
June 04, 2010 at 11:15am
An HD streaming movie from Netflix consumes roughly 3.6GB.
If you plan to watch more than 69 HD movies from Netflix a month, you might have a problem with the Comcast cap. I think many might find it hard to watch that many movies a month.
Saying "AT&T will absolutely not raise the caps on their bandwidth plans." is outrageous. Never isa very long time.
And this is my point. People are tossing analysis and accusations without data. That's crap journalism. I expect better of the Murph.
Biceps
June 05, 2010 at 10:09am
Dude, way to insult the author of the article for my comment. That takes real brains and class.
I never said NEVER, I said "in the forseeable future". Before you go insulting other people for my comments, first learn to read.
I should have said 2-3 movies per day... most Americans watch like 45 hours of the boob toob a day anyway, so that isn't too much of a stretch in my ridiculously well-informed opinion.
And, again, to make it very crystal clear - AT&T will not be raising the cap in the forseeable future. If you disagree, sit back and watch how the world really works over the next 2 years or so and you might learn something.
TheMurph
June 04, 2010 at 2:30pm
Crap journalism? This is a column. This is my opinion. An opinion grounded in fact--companies are starting to transform "unlimited" policies into "tiered" policies. The logical extension is that they will continue to define and split the user base into service tiers to extract the maximum possible revenue for their business.
The issue is not that you might be suffering at this moment from AT&T's caps. The issue is this (well, two issues, really): You will feel the effects of tiered service at some point in the future and, more importantly, AT&T is loosening you to the idea of tiered service so that when the hammer eventually falls, it doesn't appear as that big of a shock.
Frog, hot water, et cetera.
Keith E. Whisman
June 04, 2010 at 6:28am
I'm sick of tiered service. The people that came up with that are not computer enthusiasts or even really ever use a computer beyond maybe checking their email and doing a google search once every month or so.
Unlimited needs to be unlimited and I would like to see a class action law suit against all the carriers that claim to offer unlimited data plans that have any kind of a cap. Class action law suits usually are settled out of court where the company offers a small amount say 10million dollars knowing that the lawyers will likely receive around 30% or more of that settlement the lawyers are likely to agree with very little negotiation.
So I think it to be probably better to have a class action lawsuit with a legal team that has been instructed to not settle out of court.
Also I implore all customers of these carriers that offer unlimited data plans with bandwidth caps to complain to the BBB. With thousands of BBB complaints companies can't ignore that even if they think these BBB complaints are not justified.
snapple00
June 04, 2010 at 3:20pm
Who offers unlimited service?
Do you ever read the fine print? There is always some sort of limit.
TheMurph
June 04, 2010 at 9:02am
"I'm sick of tiered service."
You and me both. Or, rather, I'm more unhappy by promises of unlimited service that give way to tiered service (Comcast, AT&T, et cetera)
BrandNewJesus
June 04, 2010 at 6:20am
I agree with everything dave the murph man murphy said. But I still don't understand the $20 fee for teathering. It's just so much bullshit, who would be stupid enough to pay? ($20 to teather to an ipad, where you are going to use more data that you would on your phone, but you are still limited to the 2GB cap, which you are more likley to go over, so all in all you pay $25 for 2 gigs, $20 for using it on a different device, and $10 for going over, total $55 for data (for 3 gigs!)). Next they will graciously drop the teathering fee, so you can use your ipad and go over you 2GB cap.
atleast for now there are other options, maybe not for apple products, but that will probably be comming soon like you said. Its when the other carriers follow suit that maybe the FCC needs to look into this anti-consumer behavior.
TheMurph
June 04, 2010 at 9:02am
"who would be stupid enough to pay?"
Answer: lots of people. that's why it costs you $20 to tether.
TechJunkie
June 04, 2010 at 5:12am
Glad I'm with sprint! I just ordered the EVO 4G to replace my Palm Pre (giving to daughter) and I'm so glad I don't have this problem as Sprint has true unlimited data usage. Don't get me wrong, I feel for you guys that AT&T would treat it's customers this way. It's just wrong.
D3lt4
June 04, 2010 at 7:33am
You still pay the 10$ a month Evo tax extra, and its 20 - 30$ for teethering, simply (almost) everything.
TechJunkie
June 04, 2010 at 10:09am
True, but I don't have to pay the $10 tax till 4G hits our market...end of year possibly. I don't need to tether, so to me, it's simply everything to me.
TheMurph
June 04, 2010 at 9:01am
True. In that one sliver of the country where you'll have great 4G access, you'll be able to download as much as you want. :D
(i keeeed. i keeed)
TechJunkie
June 04, 2010 at 10:06am
You can still download as much as you want with 3G. 4G is just a huge benefit. Unfortunatley, I live in the Orlando market and 4G isn't slated to hit till end of this year.
Mark17
June 04, 2010 at 4:47am
It's like AT&T and Apple are in a competition to see who is the most evil company. Right now, I can't tell who's winning.
Mosher
June 04, 2010 at 4:25am
Its gonna be baggage fee's all over again. It just hit me that the airlines and the phone company's have the same price fixing structure!
Mighty BOB!
June 04, 2010 at 3:27am
Bleh, if they try and raise prices on me again I'm switching to a different provider.
compro01
June 06, 2010 at 6:41am
Just wait and watch all the other carriers follow suite?
Huh? What do you mean "collusion" and "oligopoly"?
Biceps
June 04, 2010 at 10:48am
I am assuming that any research paper you will be writing will be in a language other than English? A haiku for you:
SPAM is a great food
But it has no place in the
Max PC forum
TheMurph
June 04, 2010 at 9:00am
Well shoot, vikojhons. I'm sold. Please sign me up for your newsletter.
Caboose
June 04, 2010 at 7:29am
There was so much bitching by everyone, that I think the spam filter has been removed and so all the spam's coming back.
MPC could very easily use some form of capticha (or w/e its called) with posts. That might help...
-= I don't want to be dead, I want to be alive! Or... a cowboy! =-
festiva_man
June 04, 2010 at 12:34am
that all carriers will follow suit. Pisses me off. I better hear Gordon rant about this at some point next week.
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