“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