“Yet Ma Bell, for all her shortcomings, has a point. With the smartphone fast replacing the PC as the center of many consumers’ digital lives, changes in the way people use mobile computing are inevitable,” Burrows and Kharif report. “Analysts and other experts say wireless operators need to train American consumers that bandwidth isn’t unlimited. That won’t just be good for phone companies; it’ll be good for virtually all mobile phone users. Today, AT&T says 3% of iPhone users account for 40% of the traffic on its data network. The other 97% may get better, cheaper service if YouTube video and online radio addicts paid more for the network upgrades required to support their habits. ‘It’s not a question of if this changes, it’s a question of when,’ says analyst Charles S. Golvin of Forrester Research.”
Burrows and Kharif report, “In the three years since the iPhone’s debut, data traffic on AT&T’s network has soared 5,000%. De la Vega is certain it’s just the beginning. Tens of thousands of software developers are dreaming up applications to run on the iPhone and devices from Research In Motion, Motorola, and Nokia. Several apps already use unprecedented amounts of bandwidth: Ustream allows people (like actor Ashton Kutcher) to broadcast live video to millions of fans over the iPhone. ‘Other carriers are just getting a glimpse of what’s coming,’ says de la Vega.”
“AT&T, meanwhile, is racing to improve,” Burrows and Kharif report. “It’s upgrading software that should double the speed at which bits move from a phone to the nearest cell tower and digging trenches to add 100,000 fiber-optic lines to connect cell towers back to the Internet. Overall, the company is expected to invest $7.5 billion in its wireless network this year, says market research firm Ovum, slightly more than Verizon.”
Full article here.
[Thanks to MacDailyNews Reader “James W.” for the heads up.]
No, we won’t get better or even cheaper service. We will get more restricted service for higher costs. Same old story. If AT&T;and others cannot build a network large enough, then I say it’s time to call in the Obama administration and let’s put people to work building the next great public works project, the great American digital highway of the 21st century. Turn it all over to the government. That’s how sick I am of all these Balkanized crappy over priced bandwidth services from cable to wireless. He’ll, make the “highway” free so people can get some freAking work done.
No way. If AT&T;caps my data, I’m switching my iPhone somewhere else. I’ll hack it or whatever.
If you tag the few that use the most and frees the rest from network issues-Good for ATT. Just allow our phone to have real time data tracking. I have no problem with the few using gobs of data. Just allow them to pay there fair share. But it does create a bad slope for the general consumer, that I have concerns about.
When Steve P. Jobs return to apple in 1997 he said: “We need Office in the Mac, so we better treat well the company that put it there” (microsoft).
AT&T;should do the same, they are making a lot of profits and getting a lot of new customers thanks to the iPhone, so they better treat very well the company that put it there.
@theIoniousMac
there SHOULD be one unified network in the united states. wireless communication has become a necessity and its clear that independent providers cant get the job done.
If spending 7.5 bil a year is not treating costumers well, what is? Do you realize that fiber optical lines and cell towers are real physical things, not just some software. They cannot just wave a wand and increase capacity. It is taking 13 years to build a new bridge accross the San Francisco bay. Commuters know there is not enough capacity now but can actually see that it takes time to fix things. Go to Verizon if you are not happy. You can do that in a new york minute. I for one have three iPhones and would prefer a pay per use program. If that did not reduce my rates I would be very surprised.
Data hogs spoil it for everyone else.
No doubt some ATnT iPhone customers are using the data service in place of home internet access. That is cheating. It hurts every other ATnT customer.
Weed them out without hurting most users and you have a win-win situation.
I think some sort of tiered pricing is not only unavoidable, it’s probably a good thing. I use my iPhone a lot, but I’m certainly not in the top 3 percent tier (I don’t stream video or watch hours of video a day). My utility company has a tiered pricing, where the marginal cost for additional watts gets higher and higher, but basic usage is pretty affordable. That way, I can choose to power a huge Christmas light display, but I know I’ll have to pay for it (and not expect my neighbor to absorb the expense).
There’s no reason why digital data can’t be priced the same way. Frankly, the top 10 percent of users SHOULD be paying extra for their bandwidth. And either normal users like me will pay a little less, or have a slightly speedier Internet.
It’s like email: everyone demands email should always be free, but if you charged one cent to send each email, spam would disappear overnight and my costs wouldn’t amount to very much.
New technologies demand new ways of thinking, and new ways of pricing. The iPhone is no different.
How about two tiers of pricing. One that will cover 97% of the users, and a higher tier for the 3%.
This will result in some of the 3% curtailing their high use of data, and some of the others will continue to use more — and will pay more. And there will be some extra revenue to use for expanding the network.
Keep on expanding the network and revise the cut-off for the higher tier periodically so that it only affects about 3% of the users.
use the government to lower cost and be more efficient…i’ll take at&t;
They will. Handle data similar to voice, in that there is tiered pricing, and the middle-of-the-road user should not see a price difference. Don’t forget rollover megabytes. If you use a lot one month and not much another, thats where the frustration with teired pricing: everyone wants to get their value without getting reamed for going over a little on rare occasion. As long as they aren’t seen as hostile to consumers, its fine. Realistically, those who use a lot should expect this. Starting out unlimited I see as a way to both promote its use, and seed a pool of statistics for when tiered pricing is neccessary. the iPhone was different enough that using the existing statistics would have been trouble.
“then I say it’s time to call in the Obama administration and let’s put people to work building the next great public works project, the great American digital highway of the 21st century. Turn it all over to the government.”
Oh, really? Do you understand that the government has NO money of its own, only that which it would take via taxation from non-owners of iPhones?
We could “pay” for it via printed Monopoly money which we are doing now at the rate of 50 cents on the dollar. For every dollar that we “borrow” (Borrow from what?) 50 cents is unaccounted for. By the year 2023, public debt will be 100% of GDP.
When Medicare was first proposed, it was projected that the total cost roughly 20 years later would be ONE TENTH of what it actually came to be in the year 1993.
Tell me exactly why this would be different.
Not gonna happen!
If you suck up the band width, pay the price. Simple and fair.
Oh they’re going to do this, alright. It’s the only way to moderate bandwidth usage. Pay to play is the capitalistic way.
Caps and limits is the American way.
“AT&T;says 3% of iPhone users account for 40% of the traffic on its data network.”
What percentage of PRE users are using what percentage of the traffic on Sprint’s data network?
What percentage of G1 users are using what percentage of the traffic on T-Moblile’s data network?
What percentage of Droid users are using what percentage of the traffic on Verizon’s data network?
Does anyone know?
Anyone who thinks that the government would be more efficient than the private sector in this or any other matter is fucked in the head.
“Anyone who thinks that the government would be more efficient than the private sector in this or any other matter is XXXX in the head.”
If they do, let them start their own country.
Just like the major cable companies monopolized cities and raised prices, limited choices, and tied new service charges to the subscriber, so will the phone companies take advantage of their users.
The good thing about competition: Competitive pricing.
The negative? Limited growth possibilities.
Real competition would include the elimination of penalties for dropping a contract, let the consumers pay the full price for their phones. This would bring the prices down (seriously, how many of us schlubs could afford an iPhone at $600 up-front???) but lower profitability for both the service provider and the phone maker. Less cash for either party to expand quality of service and product.
Capitalism is a conundrum that mirrors life; all bioorganisms require energy consumption to survive. Food. In the business world MONEY is food.
I’m sure there’s no correlation to AT&T;actually spending LESS on upgrading their network now than they did back when the iPhone was originally launched (with WAY fewer data users back then vs now)…
“penalties for dropping a contract”
Handsome Smitty: to some degree I would agree with you, but if there are no penalties for dropping a contract, it is no contract at all.
If we don’t have contracts, whether they be economic, cultural, behavioral or whatever, all bets are off and people start shooting.
If competition applied, I think the unsubsidized iPhone price would drop to whatever natural point that the customer would either pay or not pay. I think it would be somewhere in the $200-300 range.
The same for the cost of moving data. The price would fall to its natural level if we could buy data moving services from whoever will supply them at an agreed upon price between me and the supplier. If any third party gets involved, legislative for example, the price goes up to cover the cost of the bureacracy that is necessary to maintain it. (plus an unspecified amount just, in case, you understand. See Medicare)
I do think we should be able to have an iPhone from whoever can supply the service.
One nationwide wireless standard (LTE).
Multiple wireless carriers.
Unlocked phones compatible with all networks.
True COMPETITION based on service quality, not lock-ins.
THEN, AND ONLY THEN, tiered pricing may work.
Otherwise, the action is anti-consumer and unwarranted.
Where oh where is the FTC and the FCC on this?
Oh…and ATT needs to expand their network to service the customers they already have. They have been selling a level of service (unlimited data) under false pretenses since the ATT actually hasn’t been able to deliver this to many users in some locales.
Yes, certainly, ATT is looking to tier pricing to make it better for the people who think they don’t use much data. Please check the consumption on your phone before you start wagging your finger.
THis company and Verizon are the same ones who place buttons on your phone in a way that makes it likely for you to initiate data downloads that you do not want and charges you for it. Same companies who make non iphone users spend time on the phone listening to canned message retrieval messages that we all
know too well. Same companies who want to charge you more that what you phone is worth for terminating a contract.They both suck, face it
HughB if you think putting up cell towers is the same as building a bridge across SF bay, someone better check your engineering degree.
@$$$$
What, you can wave a magic wand and have cell towers appear out of thin air?
Last time I checked it takes actual construction workers to put up a cell tower. Same as a bridge.
These carriers went into the wireless business with the intention of selling data services on lousy phones. Now that Apple showed the carriers and cellular handset manufacturers what a real cell phone really is, we’re all buying data services. Only now, the carriers discover they aren’t ready to provide the service they’re selling?
Tough numb nuts.
Approve Emergency Spending. Build out the damn networks. ATT should have been preparing for this. Compared to their earnings and growth, ATT made inadequate investments in infrastructure. Their executives probably were waiting for LTE even as they collected their bonuses each year, and didn’t want to invest in this older technology, but LTE didn’t arrive fast enough (or the iPhone arrived too soon). Either way, ATT entered into a contract with customers. Until the network is fixed, the company should be penalized for not providing the contracted services. That’s the way the business cookie crumbles sometimes.
Get over it and build out the network ATT. Meanwhile, we all need to storm Congress and force the wireless carriers to solve bandwidth problems some other way. Same thing for Comcast, Time Warner and the land-based telcos. Throttled services and tiered pricing is not the answer, because someday, we’ll all be moving huge amounts of data across wireless networks.
Think, good name you should do it. Go back to your civil e. books and see what it to build a huge bridge across a span of water
The US cell carriers are doing fine overall. If you think that Obama/feds would do a better job, just look into how difficult it is to find a doctor that takes Medicaid or, increasingly, Medicare. Government underinvests and creates scarcity. Stop whining and demanding a free lunch. There is no “unlimited” anything, including bandwith. ATT and the others will need to switch to tiered pricing, which is not necessarily a bad thing. Why should lower bandwith users have to subsidize the bandwith hogs?? If there’s no tiered pricing either A) there is overuse and you get bottlenecks (now) or B) they overcharge lower bandwith users.
I’ve never heard of a wireless carrier changing the price or plan of an existing customer base. Certainly they’ve changed their offerings due to competition, but that affects new customers, not existing ones. Of course there are those who would argue that a carrier has the right to do whatever they want whenever they want, but has anyone ever heard of a wireless carrier rewriting their plans in such a way that customers renewing their annual contract would have to agree to less service for the same price?
First, I do not have a iPhone. I would like to know who is reporting all the network problems with ATnT. Is it Verizon getting people to believe it, or M$, or is it for real. In these days of paid shills who the heck really knows.
Let’s just admit it: Obama is a serious idiot. Slightly more people got snookered than not. Okay, so a mistake was made. We can correct it starting in 2010 and finish it off in 2012.
BTW: The brilliant windbag gets quite a neck workout without Mr. Teleprompter. I think I had the same cadence while reading “Where The Wild Things Are” aloud to my parents when I was in second grade:
We are completely fed up with AT&T;. We will be jailbreaking my wife’s iPhone tomorrow and I will NOT be buying the iPhone that I had planned to buy until Apple gets an alternative to AT&T;.
My wife bought our kids each an $80 AT&T;phone to replace their pre-paid AT&T;Go phones. The younger son decided he didn’t want to replace his old phone, so she took the unopened, unactivated phone back to the AT&T;store. They said there was a $35 “restocking charge” for returning the $80 phone. When my wife asked why they hadn’t told her about the restocking charge before she bought the phones they said the notice about that is clearly printed on the back of the receipt. Never mind that the receipt isn’t available to read until after you’ve bought the phone. They then said that if she hadn’t left the store with the phone they could have taken the phone back without the restocking charge, but that since she had left the store with the phone there was nothing they could do. Of course, this simply demonstrates that had they WANTED to they could have given her a full refund, and it wasn’t really “out of their hands”.
It gets better. Not being one to take abuse without a fight, my wife then stood outside the store attempting to sell the unopened phone to passersby, explaining about the restocking charge and why she was trying to resell the phone. The manager of the AT&T;store then approached her saying he was going to call the mall security guard if she didn’t leave. Her response was to call the guard herself and ask how far she needed to be from the AT&T;store to be legal. The guard advised her that it wasn’t permitted to sell anything on mall property without a lease agreement. My wife then went to see the mall manager, who ended up buying the phone from her at the original retail price.
AT&T;will never see another dime from us…EVER! No matter what! For any product or service! I am an Apple investor, and I will oppose any further dependence or association with AT&T;for Apple. Apple is a reputable company. AT&T;are simply pirates out to rape the public at every opportunity. Die, AT&T;, just die!
an ooh rah for your wife zeke. The juxtaposition of appl’s service vs t’s is remarkable, has t learned nothing from appl since 07.
Dear John above, why don’t you listen to the unamerican shill and go buy some gold from Goldline, maybe while you’re weeping about something
You know, I never said building the Golden Gate bridge is the same a cell network. What I said is that both are physical. One you can see the construction that is necessary, the cell towers are much less obvious and so many folks just don’t believe they are any kind of a problem. In my neighborhood it took Tmobile three years to get approval for a new tower becaus of all the NIMBY. Just one of the problems with an instant build out.
Exactly–if you think Obama–or any republican government for that matter can run anything they touch, except into the ground, you are as delusional as the germans were trying to appease Hitler. So far Obamanation has already outspent GW 9-1 in trillions of dollars. All of you who use to whine about GW and how he was ruining the future for the kids and grandkids have now ruined it even for the great grandkids as well.
And while I’m at it, I’m tired of this corp bashing. Yes you will pay, why the fuck to do you think you should get everything for free? or that you are soooooo specail that ATT needs to bend to your whims? and remember without these “evil” corporations you wouldn’t even have a cell phone or enjoy the great life we have with them.
Yes they will invest 7.5 bill. and gee all you invest is your perpetual griping and 39.99 a month and then you want to hog all the bandwith you can get–how pathetic and childish–as selfish as my 8 year old
That’s all for now
“ity poor AT&T;. The wireless operator with exclusive rights to sell the iPhone in the U.S. is bashed incessantly for service that rarely lives up to the elegant promise of Apple’s sleek device…”
I know AT&T;’s users experience problems with their network than those on other wireless carriers, but to say it “rarely” is good is hyperbolic.
“Anyone who thinks that the government would be more efficient than the private sector in this or any other matter is fucked in the head.”
You mean like the military?
I’d love to see the private sector run the military–kick some ass and be done with it–rather than this incessant mambee pambee left over burned out hippie loosers of vietnam–ya I’m 50 so I should know
A common problem with iPhones is a software issue that prevents iPhones to see WiFi connections. This issue seems to be neglected by Apple, and AT&T;. If AT&T;fixed this issue, they would most likely see a decrese in 3G internet use.