May 11, 2009, 11:01 AM — I got some comments on my Friday post (welcome, Slashdot readers!) that seemed to indicate that I didn't quite make my point properly in regards to the ongoing 3G expense of a WWAN-enabled Apple notebook or netbook. Obviously such devices will have Wi-Fi built in, and will default to such a connection where it is available; but from the perspective of your pocketbook, that won't really matter, as you'll be paying for some sort of mobile data plan from a cellular carrier regardless. And generally the current pricing strategy for such plans is to charge you a nontrivial flat fee for the month that covers either unlimited broadband or a reasonable person's version of the same (with the addendum that tech nerds like me and most of the people reading this blog use an unreasonable amount of broadband).
I bring this up again because it relates to a rather chilling statement in an article in today's Wall Street Journal on the iPhone's unique stress on AT&T's network. The article discusses the fact that Web browsing eats up a significant amount of bandwidth, and that building out the network to support the extra traffic will be expensive enough to dent or eliminate the profits from selling the iPhone (and smartphones like it). But the section that jumped out at me was the author's proposed remedy: "In the short term, carriers should abandon unlimited data pricing plans. Both AT&T and Verizon Wireless already charge extra for heavy users with wirelessly connected laptops. They will have to contemplate similar strategies for smartphone users."
The article notes that the traditional method that wireless carriers use to make more money is to add more customers, but that too many smartphone customers could have the opposite effect. I'd add the the traditional method -- traditional over the last five to ten years, anyway -- for telecoms in general to make cash is to sell plans that are, in theory or in practice, all-you-can eat. The slowly dying landline segment routinely sells people these days on unlimited long distance plans, which actually are more profitable than the traditional metered plans. Most cell phone plans today offer buckets of minutes so large that users don't use them up, along with unlimited texting plans. And, of course, Internet access has also traditionally been unmetered, with outrage meeting the telecoms' hesitant steps towards adding bandwidth caps. But, assuming that the numbers in the WSJ article are real and not some sinister plot by AT&T to squeeze even more ungodly profits from its customers, the all-you-can-eat model may be breaking down when it comes to digital data.
The thing that really makes the iPhone awesome, at least for me, is that it's always there. Having access to Wikipedia and IMDB and e-mail at a moment's notice is, as far as I'm concerned, the entire point of the thing. And if I had to worry every time I took it out of my pocket that I was going to go over some bandwidth limit, it would kill the joy of the device; I imagine it would make people think twice about buying it, especially if they're doing so for their kids and have visions of a four-digit phone bill arriving in the mail. This is a question that device makers and wireless companies need to nail down before they start selling 3G-enabled everything.
One potential remedy would be to sell a single pool of digital data for multiple devices. What if you could buy a set amount of data transfer on a network, which you could use on your iPhone, your Macbook connected to a USB 3G modem, or your 3G-enabled Mac tablet? This might help networks feel like customers are really paying for the resources they're using, while allowing customers to manage multipled WWAN-ready devices without paying too much.
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