The Limits of Cellular Data

Carriers Want You to Use Less Bandwidth and Pay More for the Service

Sometimes I think I just don't get some of the major business models. Here's how I see the model the major cellular phone/mobile data carriers in the U.S. are using: You develop a service; you heavily advertise the service; you accept customers for the service; you punish (and publicly scold) customers who actually use the service. Did I miss anything important?

Now, I'm with them right up to the last point. I just don't understand how you go to the trouble to build and advertise a service that's supposed to let you do wonderful things, and then are surprised when customers actually use the network to do those wonderful things. Earlier this month, though, Ralph de la Vega, head of AT&T wireless, scolded customers who use their iPhones to do all the nifty things shown in the commercials, and hinted heavily that, if they don't stop it, AT&T will be forced to charge customers more money if they want to, you know, use their smart phones for anything more than making voice calls.

While there haven't been any public pronouncements, I've heard through some back channels that Verizon is considering the same sort of arrangement, though the nation's largest cellular phone provider is apparently looking to tie the limits to the effort to force slow-to-move customers from 2G to 3G devices and networks. Since Verizon is rumored to be the next U.S. carrier to get the iPhone, the capacity planners are probably looking at AT&T's recent experience in horror, trying to figure out how to convince customers to pay for as much capacity as possible while using as little bandwidth as can be managed.

The real problem with both these companies' approaches (and, to be honest, the approach of the other cellular carriers) is that they end up treating customers as an enemy rather than a resource. The same mindset that worked so well for the music recording industry has taken hold of cellular carriers and could very well lead them into some very interesting business places.

It's not like this is new -- back in 2007 there were articles explaining that "unlimited data" plans had some very real limitations. The difference between now and then, though, is the explosion in data use due to devices like the iPhone and Android-based phones, and the willingness of many users to have their smart phone be a primary computing and communication platform. As long as phones are tied tightly to specific networks, the carriers can do pretty much what they want -- if you need to carry the latest, hottest phone, you'll deal with the limitations -- but the promise of open networks means some radical changes for the carriers and their customers.

I think it's that prospect, in fact, that has the carriers scrambling to put limits on data use and demonize customers who actually use the features they're advertising. They realize that, for all the ads touting network superiority, they're not ready for a significant number of customers to use the cellular networks for data-heavy applications. They also realize that advertising those same data-heavy apps is the only way to convince new customers to switch and come on board. The result is a marvelous game in which the carriers have to advertise services they pray you don't use. Welcome to the new decade.

What's a customer to do? Well, the first thing is to take a serious look at how your users are actually going to use the mobile devices you give them. If phone calls are the bulk of the use, then make your device and network decisions based on phone call quality and coverage. If, on the other hand, your IT strategy depends on mobile data, read the contract closely, negotiate short contract periods, and be prepared to hold unpleasant conversations with your corporate account rep. Don't meekly accept double-talk as a substitute for contractual obligations, and realize that, when the phone company executives scream about "abusive users" they're talking about you. Oh, yeah, one more thing -- press the FCC and your elected officials about network neutrality and device independence: Neither is a universal panacea for mobile networking trouble, but each can help give customers more leverage in negotiating with the carriers, and that is a very good thing, indeed.

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