Carl Hutzler's Blog

From The Unofficial Apple Weblog…

“…AT&T was working on improving service to the strained New York and San Francisco services. AT&T may soon introduce pricing tiers that would penalize high-bandwidth users.”

Good that they are working on improving service in NYC and San Fran. I hope they can make things better quicker than the 9 months AT&T told me it would take to put a new cell tower up for my area at the Reston Town Center.

Penalizing high bandwidth users is an interesting idea and approach. I know from my monthly bill that I used 1,340,989 KB of data last month (1.34GB). My wife used 784MB. My son (original iphone/edge) used just 11MB.

The month before I used 1.433GB. The month before that 1.285GB. So I am likely always the biggest consumer of data on my family plan of three iPhones and my average is fairly consistent around 1.3 to 1.4 GB. Am I a “high bandwidth user” ? I thought that my data cap was 5GB and for the $30 a month I am paying, I was entitled to up to 5GB which I have never hit.

But I bet my wife is likely more of an average iPhone 3G user and she does about 700MB a month. I likely use more BW because I stream Radio Paradise in my car a lot. And even though it is just 64kbps, if you do an hour of streaming, that totals 28MB an hour. So 10 hours of streaming is 280MB which starts to get close to the difference between an average user and me….a bit above average.

My fear is that AT&T is talking about me when they refer to high-bandwidth users. They will want to cap me. So instead of capping me at 1GB a month and lowering my data subscription fee, the fee will stay the same and the cap will be implemented. I will then have the option to pay $60 a month for that 5GB I currently have along with maybe a 3GB tier for $45 or so.

Why do I think this? I think AT&T mispriced the data portion of the iPhone plan at $30/mo. ATT offers “Laptop” data plans for $60 a month (USB modem) which also have a cap of 5GB a month. How could two plans both with 5GB caps be different prices? The answer is that AT&T mis-guessed on how much data iPhone users would actually use. The data plans offered by the carriers for each device/phone are based on how that device will most likely be used. Old WAP browsers had very low usage and the carrier knew that. Laptops can have a lot more usage. Blackberry’s are somewhere in between…but if you use your Blackberry with a corporate account, the data plan charges are more expensive as the carriers know those corporate users do a lot more email than silly AOL/Yahoo/MSN email users. So back to the iPhone and AT&T bad guesses…now that we are using the iPhone a lot more (app store, voip, streaming music, streaming video, etc) they want to change the price.

But they can’t just change the price. Or can they? We all have contracts. And Apple may have a contract too for the $30 price point. But maybe the contract does not state the limt? If it doesn’t, AT&T will keep the price but reduce the limit and make new plans available for higher tiers. Or they will change the whole pricing for data on the iPhone and open up an opportunity for iPhone users to get out of their 2 year contracts without the ETF fee.

But would people with iPhones drop their AT&T service if given an opportunity? I happen to love my iPhone and could not think of going back to a freakin’ MOTO RAZR. But I might switch to T-Mobile. Of course if AT&T waits too long and Apple does a deal with the red devil (VZW), then all bets are off. Maybe VZ would have tiered pricing for data too? Will be interesting. But wouldn’t some competition (and extra towers) be wonderful for us poor iphone folk :-)