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The Almighty Buck The Internet Wireless Networking

The Odd Variations On 3G Per-Megabyte Pricing 205

Posted by Soulskill
from the taking-their-toll dept.
GMGruman writes "Carriers are increasingly charging for 3G mobile access by the megabyte, to prevent 'unfair' subsidies of heavy users by everyone else. So why does the price of a 3G megabyte vary based on the device used to send or receive it? Why is an iPad megabyte cheaper than a MiFi one? After all, a megabyte is a megabyte as far as the network is concerned. InfoWorld has a comparison of 3G pricing for the four major US carriers for their various supported devices, so you can see whose 3G pricing is out of whack for which devices."
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The Odd Variations On 3G Per-Megabyte Pricing

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  • Fascinating (Score:5, Insightful)

    by Ltap (1572175) on Friday December 03, 2010 @05:18PM (#34437396) Homepage
    The best way to undermine a broken, corrupt system is to draw attention to the inconsistencies in its operation.
    • by Monkeedude1212 (1560403) on Friday December 03, 2010 @05:21PM (#34437440) Journal

      The best way to undermine a broken, corrupt system is to draw attention to the inconsistencies in its operation.

      Funny! That's also how my first marriage ended!

    • by pesho (843750)
      This is how telecom companies get to charge arbitrary rates under the guise of offering 'more choices for consumers'. They have practically put an 'abstraction layer' that makes it difficult for consumers to make decisions based on service and price.
      • Re:Fascinating (Score:5, Informative)

        by timeOday (582209) on Friday December 03, 2010 @07:02PM (#34438866)
        Dilbert coined the term confusopoly [wikipedia.org] for this: "a group of companies with similar products who intentionally confuse customers instead of competing on price."

        Obama advanced Elizabeth Warren for the new Consumer Financial Protection Bureau, and she has railed against this problem for years: "Today, the big banks churn out page after page of incomprehensible fine print to obscure the cost and risks of checking accounts, credit cards, mortgages and other financial products. The result is that consumers can't make direct product comparisons, markets aren't competitive, and costs are higher."

        It's not hard to see the tie between confusopoly and the mortgage meltdown that wrecked the economy, either - and here I include not only under-educated sub-prime borrowers, but bankers creating and selling complex derivatives that were not well understood by ratings agencies, regulators, nor even the bankers themselves.

        However, Republicans slammed [house.gov] the bill creating the CFPB as "a government takeover of the economy. The President and Democrats today gave financial regulators the power to create years worth of financial uncertainty, which will only lead to more struggling businesses and fewer jobs." Just as with the Credit Card Reform Act [findlaw.com] of 2009.

        • by epine (68316)

          I hadn't come across the term confusopoly. The other day I commented that lately rather than reading Dilbert, I check up on the developer blog at Open Pandora.

          Market discipline (and invisible hand enlightenment) depend crucially on transactions between rational, well informed parties.

          The prime order of business in a mature firm is to escape market discipline. Market discipline entails the risk of failure if you decide poorly. Who wants that, if you can avoid it?

          I've spent far too much time in the past de

    • by mattack2 (1165421)

      Unfortunately, it hasn't worked for "The Daily Show". (That's one of the things that makes me mad watching the show -- they point out the inconsistencies/hypocrisy, with video clips, that the nightly news shows should be doing!)

    • by SimonInOz (579741)

      Of course, if you really want to look at high charges, have a look at charges for messaging (texting, SMS). Here (Oz) carriers charge up to 20 cents (US dollar is about the same these days) for a message.

      It's, what, 140 bytes. Hmm, that works out at $1,428,571 per megabyte.

      Now that's what I call a profit margin!

      • by chrish (4714)

        Text messages are $0.50 each to send or receive in Canada. So very awesome having a three-way confusopoly controlling 95% of the market.

        It's even worse when you learn that texts are max 160 bytes because that's the amount of space left in the packets your phone is sending to the tower anyway (see this article [nytimes.com]). They cost absolutely nothing in terms of bandwidth. 100% profit.

  • by godrik (1287354) on Friday December 03, 2010 @05:24PM (#34437490)

    that's the one that actually contain the table your are looking for.

    http://www.infoworld.com/d/mobilize/the-strange-unpredictable-pricing-3g-data-plans-485?page=0,2 [infoworld.com]

    • by SheeEttin (899897)

      http://www.infoworld.com/d/mobilize/the-strange-unpredictable-pricing-3g-data-plans-485?page=0,2

      Page (0,2)? We're paginating in two dimensions now?!

  • by Anonymous Coward

    Transferring 1 1MiB chunk stresses the network a lot less than transferring 1024 1KiB chunks.

    It makes sense to charge differently for devices with different usage patterns.

    • Ok, I am not a CS major, so please explain why that is? A packet is a packet, and all packets are the same size, no? If anything, transferring one 1MiB would take less packets because of the need for less routing overhead. The network "knows" that these X packets are all going to the same place. As opposed to sending 1024 1KiB packets, each of which needs routing appropriately.
      • That's what he said. Well, most of the packets will be capped at 1500bytes for historical reasons. Sending 700 1500-byte packets is less demanding than 1024 1024-byte packets. Less demand on the routers, and timeslots are better utilised.

        Voice goes seperatly in cells of 48 bytes for other historical reasons. The difference between a packet and a cell is the former is variably sized, while the latter is always exactly 48 bytes, no more, no less.
      • by Nadaka (224565)

        You must be a first year CS major.

        No. Not all packets are the same size.

        a single large packet has has a header that tells the network where it is supposed to go.
        1024 small packets each have a header of about the same size as the header of the large packet, for over a thousand times the overhead cost just in terms of bandwidth.

        • by Bigjeff5 (1143585)

          It sounds bad, but it really isn't. The vast majority of packets sent are sent at the maximum 1500 MTU. This is because it is hard to get files that are smaller than 1500 bytes, so the only extra overhead for small files vs big files is the tail end of the smaller files.

          It's very minor. 1024 1kb files transfers an extra 9kb of data due to overhead compared to a 1mb file. That's about 0.8% waste.

          Even a 1gb file doesn't waste much - 1gb worth of 1kb files transfers an extra 8mb of data due to overhead comp

      • by Sancho (17056) *

        You two are in agreement. He said that 1 large chunk is easier to transfer than lots of small chunks.

        A TCP packet has a minimum size of 64 bytes. That's with no payload (no real data beint sent.) If I have 1400 bytes that I want to send to someone, my device can choose to send 1400 65 byte packets (91000 bytes total including overhead, and not including acknowledgement packets.) It could also choose to send 1 1400 byte packet (1464 bytes, with the same caveats.) These are obviously the extreme cases--i

      • by Bigjeff5 (1143585)

        The network "knows" that these X packets are all going to the same place.

        The network knows no such thing. It only knows where each individual packet is going, it has no concept of the entire cluster that is being sent.

        Sending a 1mb saves about 9kb (about 6 full packets worth) of data compared to 1024 1kb files. That's 0.8% waste. Not exactly something to write home about.

        Here is the breakdown: each packet for the 1mb download will hit the cap of roughly 1500b. With an overhead of 28 bytes per packet, that's 695 packets to transfer a 1mb file vs 1024 1kb files. The extra 28

    • by c++0xFF (1758032)

      But the usage patterns don't jive with their pricing.

      I should preface this by saying that this is only a guess -- any rebuttals are welcome.

      Let's start with web browsing. I'd say the usage pattern for each device is about the same, with the big difference being volume. The biggest difference would be for smartphones, which will have fewer large image files by visiting web sites optimized for a mobile device.

      Next: email. I don't see a big difference here. Maybe fewer large files for smartphones and table

  • It's eerily similar to our patent laws, communication laws, and copyright laws.

  • UK - setup (Score:5, Insightful)

    by ZERO1ZERO (948669) on Friday December 03, 2010 @05:27PM (#34437528)
    What gets me, is they are double creaming you. You Pay for a limited amount of megabytes AND only for a time period! So with 3G dongles for example, you pay say £10 or £20 or £50 for maybe 1GB, 5GB and 'unlimited GB' - but they cap you in that this is for '30 days'. So if you dont use up your allowance in the time period, then you are shortchanged, as you have paid for it. Some people operate it the opposite way - you buy an amount it entitles you to 24 hours, 2 days, 7 days or a month etc so If you want to perhaps check your emails or what not when you are on business for a few days, you have to either pay over the odds each day or buy morethan you need.

    Can they not just charge you for WHAT YOU USE, WHEN YOU USE IT. It's fucking retarded.

    In terms of PAYG mobiles they dont have these problems

    • Re:UK - setup (Score:4, Informative)

      by RotateLeftByte (797477) on Friday December 03, 2010 @05:42PM (#34437750)

      Some UK PAYG Tariffs do have time limits on the period that the 'Top-Up' is vaild for, AFAIK, these are not from the main carriers but secondary networks that buy space on the main networks.

      Back to Data Tariff's.
      '3' has a contract £15.00/month for 15Gb. i use the same Sim in a 3G Dongle and in a 'mifi' unit. No problems with 1Mb 1Mb here.

      • by illtud (115152)

        No problems with 1Mb 1Mb here.

        Top tip! Use != when attempting inequality on ./

    • by Splab (574204)

      Local areas may vary, but the company I work for charge you however you want it.

      You can buy an allowance for the month, like most places - from $10 (1GB) to $30 (5 GB) - or you can pay $1 per MB.

      The thing is - if we where to charge you the actual cost per MB traffic, it would be hugely expensive for you to get anything close to 1 GB (putting up towers and having xDSL in the boondocks is expensive, think avg. price pr. MB in the 20 cent range) - most people wont use more than 50-100MB, therefore we can lower

    • by Nick Ives (317)

      You're railing against the basic issue of provisioning. Even on fixed line ISPs you get a certain limit (or "unlimited") for a certain time.

      Selling someone an allocation without a time limit is a nightmare. What if you end up with large amount of unused data allocation? Potentially it could all be used at once, leading to service disruption for regular users. Also, pure PAYG data usage is a bit of a problem. You don't want people turning up and using large amounts of data out of the blue which is reflected

  • That's an easy one (Score:5, Informative)

    by Minwee (522556) <dcr@neverwhen.org> on Friday December 03, 2010 @05:28PM (#34437538) Homepage

    So why does the price of a 3G megabyte vary based on the device used to send or receive it?

    Because you keep paying it. Next question?

    • by tlhIngan (30335)

      So why does the price of a 3G megabyte vary based on the device used to send or receive it?

      Because you keep paying it. Next question?

      Close, but the real reason is you're paying for varying levels of access. Think of it this way - you could buy a raw Internet connection at some high price. Or you can buy cut down versions at cheaper prices.

      Let's take some simple plan categories - dumbphone, blackberry, smartphone, laptop, VPN. Does ao dumbphone which offers facebook, basic email, twitter and the like need fu

    • by thegarbz (1787294)
      Sub question: What can we do about it?

      If you're going to say vote with your wallet, then I ask to which provider? Not having internet is no option. Which provider in that list will offer me 3G internet and 3G mobile at the same rate?
  • by grasshoppa (657393) <skennedyNO@SPAMtpno-co.org> on Friday December 03, 2010 @05:32PM (#34437594) Homepage

    A megabyte is not equal to a megabyte, necessarily.

    For instance, let's say I have a credit card processing server going across the same WAN link as web traffic ( for other workstations ). Obviously the web traffic is lower priority than the payment traffic.

    As it applies to cell phones; maybe iphone users use their devices differently from other devices? Who knows, it's more likely cell phone companies bilking their customers ( as always ), but my point is that not all MBs are the same.

    • by h4rr4r (612664)

      So sell X GiB at Y QOS level. No per month, since that is just a scam. Either they get you with overages or you don't use it all and it expires.

    • Also A lot of the different pricing comes from recoup costs for subsidizing the smart phone and tablet costs. The just do the math as we need to make up X for each customer who uses a smart phone because we give out Y number of smartphones at Z loss. Z/Number of estimated users = the amount we need to jack up the price. Some items cause them to loose more money then others like the little USB modem may cause them to loose more money and thus creates a different price system. 1 megabyte is the same no ma
    • by thegarbz (1787294)
      Your QoS example falls down on the face that the device which requires the highest QoS (mobile phone) also has the cheapest rate.
  • In the article it states:

    "Note that Sprint is the only carrier to offer tablet 3G service without requiring an ongoing commitment; you can start and stop whenever you want -- perfect for the occasional traveler."

    But that is true of the iPad plan as well - you can start or stop whenever you like. The Samsung tablet does have that issue with Verizon, which has a fee for stopping service.

  • Part of the data plan's purpose is to subsidize the cost of the phone. That's why they won't let you buy a data-capable phone without the data service. There's no technical reason they can't, they just don't want you to get the discounted phone without paying them back for the discount.

    The whole system is stupid. If cell phone providers sold cars, you would get the car for $50, but sign a multi-year agreement to buy gas from them at an inflated price.

    • by bbtom (581232)

      "That's why they won't let you buy a data-capable phone without the data service."

      http://expansys.com/ [expansys.com] does. If you've got loads of money: iPhones/iPads, Android, Palm, Blackberry, Nokia etc.

      Oh, wait, you mean in the US where you've got weird old network technologies (CDMA), lack of effective regulation and bizarre pricing (pay to get a text message? Who thought that up?!)

      In most EU countries you can buy unlocked phones, and if you've got a phone on a contract, once the contract's minimum term is up, you ca

  • They're priced different because pricing isn't based solely on the cost to the supplier. Demand, competition, perceived value, price discrimination, etc... all influence the price as well.

  • Premist is flawed (Score:5, Insightful)

    by Mr. Freeman (933986) on Friday December 03, 2010 @06:09PM (#34438132)
    "Carriers are increasingly charging for 3G mobile access by the megabyte, to prevent 'unfair' subsidies of heavy users by everyone else."

    No, they're not charging more in order to make the network "fair" for everyone. They're charging more because they can get away with it because there are no real alternatives for anyone to switch to (especially with the 2-year contracts they're allowed to lock everyone into).
    It's just that saying "We're charging more money because we're a company that's driven by making more money" doesn't go over as well as saying "We're charging more money to keep the network fair".
    • Well, if the customer read their contracts, they could get out of it when the company changed it because it is a significant change. That is to say, if a company decides to change the terms of the contract, I don't have to agree and I'm no longer locked into the 2 year agreement. My friend did that last year with Sprint because they were going to charge $0.70/month (or some other bogus amount). He then sold his (subsidized) Palm Pre on eBay and bought a Droid through a different carrier.
  • A megabyte at the hour of peak usage is worth much more than a megabyte in the wee hours. So one reason to charge more for megabytes from USB modems is because they are more likely to be used during business hours than iPhones.

    It would be better to make the network completely device agnostic and instead have time-of-day per-megabyte pricing tiers, but that would add complexity.

  • I don't know how this fits in, but Verizon's driods require the unlimited droid dataplans. You can't buy it without the droid data plan. It's unlimited for aproximately $40/month. no cap. phone only (tethering costs extra unless you use barnacle)
  • And now with "4G" speeds, you can effectively use up a 5Gb alotment in a month in just over 30 minutes. At least in theory.

  • I remember a while ago, when companies still offered unlimited internet plans... but they were throttling traffic. People made a big fuss about it.
    Today, we see unlimited plans for internet and wireless are disappearing, overcharges are common...

    The first thing to note of course is that a network (cell-phone or internet...) is not something to be characterized in such a simple manner as cost per MB. There is no cost per MB.
    Costs for a network are basically the following

    1. Infrastructure costs (routers, e

  • The assumption, as best I can tell, is the same that drives carriers to charge $20/mo tethering fees for using smartphone data plans with a laptop. Basically, they don't expect you to use very much of your monthly plan.

    The ipad+mifi deal from Verizon is another good example. If you want just a mifi (for, say, a laptop or an existing ipad), you pay $260 + $40/mo (contract) for 250MB or $60/mo for 5GB. If you buy it with an ipad, you pay only $130 for the mifi device and get the option to buy month-to-mont

  • I have "unlimited" data service on my android phone, so after a damn simple rooting I now have wifi tethering for devices to the phones 4G network. This let me get rid of my clear.com service for my laptop ($45 a month), and avoid buying another data service for my ipad.

    It may be a breach of service contract, but I'll be goddamned if I'm going to buy 4 completely different internet data services, when one is all I need at any given time (except I really do need two as the one at home has to be up all th

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