December 10, 2009, 8:15 AM — Remember last spring when Time Warner Cable was making itself so popular and loved by talking about rolling out a tiered pricing plan for broadband? We reported ont the impact of the proposed plan, then reported that it was raising a few eyebrows in Congress, and finally on Time Warner's wise decision to back away from the issue due to the intense negative reaction of its customers to such a plan.
Well friends, gather up your pitchforks and your torches, because we've got another tiered-pricing monster to slay. This time it comes from AT&T Wireless, and it's aimed squarely at you iPhone users. AT&T CEO Ralph de la Vega says iPhone users are bandwidth hogs and you need to either stop watching frivolous YouTube videos or start paying more.
OK, that's not literally what he said. He actually said that 3 percent of smartphone users are using up 40% of AT&T's network capacity, and he suggested that users don't understand that streaming video and audio use a lot of bandwidth, while reading email doesn't. He wants to educate users in the short term, and institute a "pricing scheme" that addresses these heavy users in the long term. Ars Technica and CNET both have more details on this story.
Of course, this isn't quite the same as the Time Warner situation. For one thing, most users have a choice of wireless carrier (in many cases Time Warner Cable customers were stuck with the choice of Time Warner or no broadband), though changing carriers might mean switching phones. For another thing, there's a precedent in place. AT&Ts wireless data-card customers spend $60/month and have a 5GB cap on their service, after which they're charged for additional bandwidth used; iPhone owners pay $30/month for unlimited data. And lastly, given the widely reported problems with AT&T's coverage at big conferences and events where lots of iPhone owners congregate, there may actually be customers (those who just want to make a phone call) who support de la Vega's plans.
At the same time, it all sounds a big disingenuous, doesn't it? AT&T cuts a deal with Apple to be the sole carrier to offer the iPhone. AT&T sets the pricing. AT&T markets the wonderful abilities of the iPhone with its always-available online connectivity. AT&T reaps the rewards as users enthusiastically purchase iPhones and sign-up for contracts. And now AT&T is complaining that users are actually using their phone. Imagine that.
Here's an idea for AT&T. Instead of charging people for using too much bandwidth, how about rewarding people for using less? Start kicking out $5 or $10 credits to users who use less than 1 GB of data in a given month. Use the carrot instead of the stick. You might avoid the angry mobs that way.
So AT&T customers, what do you think of the idea of charging extra for heavy bandwidth use? Is it a reasonable plan that should help normal users get better service? Or should AT&T just buck up and add more capacity to their network? Please leave a comment; I'd love to hear your thoughts!
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