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Wireless Networking Communications The Almighty Buck The Internet Apple

Mixed Reception To AT&T's New Data Pricing Scheme 514

Several readers have sent in followups to Wednesday's news that AT&T was eliminating its unlimited data plan. Glenn Derene at Popular Mechanics defends the new plan, writing, "Imagine, for a moment, if we bought electricity the way we buy data in this country. Every month, you would pay a fixed amount of money (say, $120), and then you would use as much electricity as you wanted, with an incentive to use as much as you could. That brings price stability to the end user, but it's a horrible way to manage electricity load." Others point out that this will likely engender more scrutiny from regulatory agencies and watchdog groups. A Computerworld article says that one way or the other, AT&T's decision is a huge deal for the mobile computing industry, influencing not only how other carriers look at data rates, but how content providers and advertisers will need to start thinking about a data budget if they want consumers to keep visiting their sites. AT&T, responding to criticism, has decided to allow iPad buyers to use the old, unlimited plan as long as they order before June 7, and Gizmodo has raised the question of "rollover bytes."
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Mixed Reception To AT&T's New Data Pricing Scheme

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  • by mayko ( 1630637 ) on Friday June 04, 2010 @06:23PM (#32464596)
    Then price it like electricity. Does anyone pre-pay for electricity?

    Fortunately my power company doesn't rape my wallet if I use a few extra watts. At 25 dollars per 2gb then they should only charge you .0122 dollars per mb you go over right? Hell they should just charge you that rate regardless of what plan you buy.
  • Re:I don't want this (Score:3, Interesting)

    by bunratty ( 545641 ) on Friday June 04, 2010 @06:28PM (#32464638)

    The infrastructure is there and costs nearly the same if tons of data is going over it or no data is going over it.

    But if people keep using more and more bandwidth, someone will have to pay for more and more infrastructure to support the ever growing usage. If we charge for bandwidth used, people will have an incentive to use less, and the cost will be reduced for all but the heaviest users.

  • by Mike216 ( 1808602 ) on Friday June 04, 2010 @06:35PM (#32464710)
    I don't understand why so many people make these analogies between networks and fuel/electricity/etc. AT&T isn't providing the data, they're providing the conduit you use to get it. I'll use the same example I used on the AT&T forums:

    Two people pump x amount of gas each from a fuel pump at the same time. The hose is split so that they can do this simultaneously. This goes relatively quickly.
    One hundred people pump x amount of gas each from a second fuel pump at the same time. Again, the hose is split so they can all do this at the same time. This takes considerably longer.

    For those who think charging according to how much data you use is only fair, remember - all people mentioned above will end up being charged the exact same amount of money. In this case, they're paying the supplier for the hose based off how much they pump through it. This, IMO, is a much better analogy for what the carriers are doing.
  • by irid77 ( 1539905 ) on Friday June 04, 2010 @06:36PM (#32464724)


    "Imagine, for a moment, if we bought electricity the way we buy data in this country. Every month, you would pay a fixed amount of money (say, $120), and then you would use as much electricity as you wanted, with an incentive to use as much as you could. That brings price stability to the end user, but it's a horrible way to manage electricity load."

    That analogy doesn't work, because the main constraint for electricity isn't network capacity, it's the fact that most current methods of production consume a resource irreversibly, so you're being charged for the use of the resource, not just the use of the power lines. Data doesn't get "used up", only transferred around, so it's relatively easier/cheaper for cellular (or land) networks to increase their capacity to transfer data than it is for energy companies to produce more energy.

  • Re:I don't want this (Score:3, Interesting)

    by Grishnakh ( 216268 ) on Friday June 04, 2010 @06:37PM (#32464738)

    No, there's no reason for this at all. All you have to do is identify the bandwidth hogs, and then deprioritize their traffic. A simple algorithm could be devised to rank customers by their bandwidth usage, and then give them priority in inverse order of this. Then, the hogs will get crappy bandwidth during peak hours, but still be able to download to their hearts' content during off-hours when no one else is using the bandwidth. There's no reason to increase the infrastructure capacity.

    Charging for bandwidth is asinine when during much of the day, that bandwidth is not being utilized at all (e.g., midnight to 8AM).

  • Re:I don't want this (Score:2, Interesting)

    by Monkeedude1212 ( 1560403 ) on Friday June 04, 2010 @06:38PM (#32464752) Journal

    Apps and Browsing right? I mean, if the page I'm looking for is only a few K when I browse at home, but on my phone without an adblocker its going to be over a few megs, that hardly seems fair to charge me by the amount of data, right?

  • Some early toasters didn't come with the traditional two-pronged plug. Instead, you had to unscrew a light bulb and screw in the toaster's plug. Why? Because the electric company charged more for general-purpose outlets! Prior to metered billing, people paid for electricity by the number of fixtures and their estimated electric use. Everything became sane once the electric companies introduced metered billing.

    Anyway, AT&T's $20 / month tethering plan is just going to make me switch when my contract is up. Charge me for the bandwidth that I use, not for the device!

  • Re:I don't want this (Score:3, Interesting)

    by bunratty ( 545641 ) on Friday June 04, 2010 @06:40PM (#32464786)
    I don't see how changing for bandwidth would stifle growth. Airlines make passengers pay for each seat on an airplane, no matter how full it is, even though the plane's going to fly the route anyway. The airline industry has grown quite a bit in the past several decades despite this. I don't see why charging for bandwidth use would affect competition over network speed.
  • by IANAAC ( 692242 ) on Friday June 04, 2010 @06:46PM (#32464844)
    I belong to a coop for my electricity, and yes, we do pre-pay, in a way. We pay 31 bucks a month for a set amount of kilowatt hours, and if we go over, we get charged more.

    The big difference between electricity and cellphone data charges though, is that if I see I'm going substantially over my limit - very easy to do in the summer - then I can self-regulate, by not using power hogs like air conditioners. Or I can split my load to partial electricity and partial propane (which is ALWAYS prepaid in these parts). That's very hard to do with data consumption. I mean, say you visit a specific news site every day. Not unreasonable. But how do you know what's going to be on the page from one day to the next?

  • Re:I don't want this (Score:4, Interesting)

    by Runaway1956 ( 1322357 ) on Friday June 04, 2010 @07:01PM (#32464984) Homepage Journal


    There are already posts about loading pages for a few k of content, which total up to megabytes - all because the page is burdened with advertising. Even though I have the slowest, crappiest, highest latency DSL in the world, no page should EVER take a minute to load. I upgraded from dialup just as soon as DSL became available in my area, and the advertisers sucked up every bit of bandwidth that I'm paying for!! Me, I'm PAYING for advertising! Why? I don't want to see ANY of it!

    AdBlock Plus, and noscript are essential to browsing the web on dialup and any low-bandwidth plan, as well as for anyone living an hour or two from the big cities. That is just so WRONG, on so many levels.

  • by oddaddresstrap ( 702574 ) on Friday June 04, 2010 @07:07PM (#32465040)

    Back when we ran a small, dialup ISP, we charged everyone the more or less standard $20 per month. Then we did a little number crunching and found that most people used less than 100 hours a month, but there were a handful that were online pretty much 24/7. In at least one case, it was a family that had mom on ebay during the day, the kids gaming until late and then dad on during the wee hours. They complained bitterly when we raised the fee for "unlimited", but calmed down when we explained that it cost us around $22 a month just for the phone line they were using and by charging them $20 a month, we were subsidizing their connection.
    At least in our area, the situation remains somewhat the same, where ISPs have to buy more bandwidth to keep customers happy during the peak evening hours when more people are streaming more stuff (ie, Netflix and p2p) every day.

  • Expensive per MB (Score:4, Interesting)

    by mprindle ( 198799 ) on Friday June 04, 2010 @07:12PM (#32465112)

    What really bugs me about the rate changes is how much they are charging per MB when compared to a standard DSL or cable connection at home. Comcast now has a 250GB / 250,000MB data cap and my service runs around $43 per month. So my cost runs around .017 cents per MB assuming I use my full 250GB allotment.

    With AT&T's model the cost per MB on the $15 plan is 7.5 cents per 200 MB and the $25 plan is 1.25 cents per 2,000 MB. This is roughly a 440% and a 73% respective increase of the cost of my home bandwidth.

    Yes I know it's not quite a apple to apple comparison, but the cost of the bandwidth and wireless support can be no where near the prices they are charging. Unfortunately in the states this goes for the biggest two wireless carriers ATT and Verizon.

    I have no problem paying for what I am using, but the pricing of there data is way out of the ball park.

    Note: Yes I know my numbers are not exact and I also know I didn't use the standard 1,024k when doing my calculations from GB to MB.

  • by erroneus ( 253617 ) on Friday June 04, 2010 @07:26PM (#32465264) Homepage

    People invariably react badly when they read a news story about some industry and containing words like "government" and "scrutiny." I don't because I can appreciate what things would be like without government protection and regulation. Without government protection, there would be no power lines, telephone lines, data lines or protected radio frequencies. Power company pisses someone off and someone decides to take down a few power polls... someone doesn't like what AT&T wireless is doing and then sets out jamming devices to block wireless signals. Government protection is pretty much a requirement for services like these. But government protection comes with rules and regulation. After all, the government should not afford special rights and privileges without those who benefit from them giving something back to "the people" in some way.

    Increasingly, we are seeing a LOT less giving something back to "the people." Increasingly, companies like AT&T whose "right of way" comes from the government of "we the people" abuses the people with all sorts of unreasonable pricing and increases. And then when the government starts looking at what they are doing, both the businesses and people who are pro-business quickly forget where their right-of-way privileges come from and get indignant about government scrutiny, oversight and regulation.

    If anything, we need to use the power of "we the people" to threaten such business with increased regulation and oversight including but not limited to pricing structure regulations and the like. This works quite well for other government regulated business such as electric power. They all have limits over what they can charge and not a single plant has gone bankrupt as a result of government regulation. In fact, in places where deregulation has occurred, prices went up and quality/reliability went down. The people NEED government regulation of such utilities. POTS is considered a utility and so should wireless service these days. Their current limit-pushing behavior is simply screaming for a government slap-down with imposed limits that benefit the people... the people whose government has granted these companies right-of-way protection in order to operate.

  • by gringer ( 252588 ) on Friday June 04, 2010 @07:37PM (#32465368)

    Does anyone pre-pay for electricity?

    I do. I'm signed up with powershop [], which provides various specials that you can purchase in advance to save a bit of money.

    For example, they had a "winter" special, offered three months before the start of winter, and I could purchase blocks of 150 units of electricity over three months of winter (50 units per month). Now that New Zealand is experiencing winter, electricity prices have risen by about 3 cents per unit, so I've saved a bit of money by doing that (about $4 saving, where I could have made about $1 by keeping the money in the bank).

    They have better one-off specials, but you need to be watching the online shop like a hawk to get those.

  • Re:it had to happen (Score:3, Interesting)

    by icebike ( 68054 ) on Friday June 04, 2010 @08:04PM (#32465616)

    And I really don't mind the concept of making high-usage customers pay higher costs.

    But this nonsense of a fee for tethering? Why?

    Continuing with the Popular Mechanics analogy of buying electricity, why should I pay more just to light a bulb in my garage instead of my house? As long as I pay for the kilowatts what does it matter?

  • Re:it had to happen (Score:3, Interesting)

    by T-Bone-T ( 1048702 ) on Friday June 04, 2010 @08:40PM (#32465826)

    The tethering fee is due to the added value of the data going to your computer instead of your phone. It is far mare convenient to access the Internet on your laptop than on your phone so why shouldn't you pay for it? I'm not saying I like it but that's how capitalism works.

  • by Anonymous Coward on Friday June 04, 2010 @08:59PM (#32465936)

    If I'm going to pay for the amount of data I use, then I want the ability to completely filter ads on my iPhone. This includes the coming iAds.

  • Reality Check (Score:1, Interesting)

    by Anonymous Coward on Friday June 04, 2010 @09:08PM (#32465994)

    Two points.

    Point one, and I think many people need to understand this, seriously. AT&T NEVER HAD AN UNLIMITED 3G DATA PLAN. EVER. Not for the Joe Schmo you and me, anyway; I'm sure they made deals with large corporations. Why do I say this? Because I, two close friends, and a dozen or more people I know passingly have ALL received overage bills on our UNLIMITED data plans over the past year or two. There was, never, an unlimited data plan. It was 'unlimited' in the same way ISP's back in the day offered 'unlimited' connection time; it was unlimited until you actually left your modem dialed in for a few days, and then they disconnected you for 'overuse'. AT&T pulled a bait & switch on you when you bought the unlimited plan in the first place. Do you want to know why they're doing away with it? Two reasons: one, the new limit on the plans is lower than the 'unlimited' limit.. and they like that; two, and more importantly -- Obama is in office. Yes, I said the president's name. No, I'm not going to say one thing one way or the other politically except this - he's pushing for consumer protections, at least insofar as proper documentation and up-front contracts. AT&T sees the writing on the wall and figures it can kill 2 birds with 1 stone -- fix a glitch they've had for awhile (too much bandwidth available for a flat fee before any overage is hit), and get in line with the political hammer before it comes down on them. That's all this is. It's a way to generate more profit on existing customers AND get good with the government before they even come knocking. Win win.

    Point two:

    Carriers don't want to start charging per-mb or per-gb except for overages because they know they'll end up like the backbone bandwidth market (not consumer or dedicated server bandwidth; colo & above bandwidth). PREMIUM blended bandwidth at a LOW commit will, if you have any sense, run you anywhere from 50-150 dollars/mbit for the first 10mbit (note that single-provider low-cost bandwidth can literally be as low as 1-2 dollars/mbit at high commit rates, but I'm intentionally going high here).

    1 mbit -- 100 dollars, let's call it that for ease of math.

    1 mbit / 8 = 125,000 bytes / 1024 = 122 KB * 60 (sec) * 60 (min) * 24 (hour) * 30 (day) / 1024 (MB) / 1024 (GB) = 301.75 GB.

    301.75 GB for 100 dollars, assuming you used every second of the pipe. That's, wow, that's / 33 cents a GB, isn't it? And I'll tell you right now, NOBODY would ever charge you an overage or an 'overuse' fee for using that full mbit 24x7 in that market; you pay for 1mbit, you may use it, all month long if you wish. Oh, and that's for fairly outrageous low-commit bandwidth pricing. I've personally seen high-commit pricing for a single provider in the under 4 cent/GB range, when the math is done this way.

    Even figuring in that you only utilize a portion of such a pipe in a day, it still doesn't work out in AT&T's favor when compared. Various providers charge up to 2 DOLLARS a MEGABYTE for usage past their 'included limit' on these plans. Isn't that, umm, gosh, actually, I can't even factor how many times over more expensive that is than internet connectivity pricing. Is a cellular network THAT MUCH more expensive than a fiber network? I'll grant you it is more expensive, but over 1000 TIMES as expensive? No, no I don't think so.

    You get ripped off every day you pay $10's to $100 for a couple of GB of usable limit (which is what you do RIGHT NOW on your 'unlimited plan' -- the new one just spells it out for you instead of lying). Every. Single. Day.

  • by MobileTatsu-NJG ( 946591 ) on Friday June 04, 2010 @09:26PM (#32466108)

    If I'm going to pay for the amount of data I use, then I want the ability to completely filter ads on my iPhone. This includes the coming iAds.

    Mod parent up.

    The iPhone was never designed for tiered data plans. What are they going to do, have flags for what data connections are allowed? Are apps going to have a bandwidth rating? Or am I just going to have to turn the data off unless I'm in Wifi... ...I hope AT&T is listening. It'd be far cheaper for me to just get a regular phone and an iPod Touch. That idea hadn't even popped into my head until this came along.

  • by gad_zuki! ( 70830 ) on Friday June 04, 2010 @09:39PM (#32466190)

    Yes, it is a "cultural thing." In American culture we accept some kind of divine rule of kings for large corporations. We don't boycott or complain. We take the shiny and pay out the nose. Our markets are based on brand identification and our purchasing moves are dictated almost purely by ads and marketing. In other cultures, money has value, and demanding good service for exchange of money is not seen as being 'cheap' or 'crass.'

  • Re:it had to happen (Score:5, Interesting)

    by laughingcoyote ( 762272 ) <barghesthowl@e x c> on Friday June 04, 2010 @09:56PM (#32466286) Journal

    The tethering fee is due to the added value of the data going to your computer instead of your phone. It is far mare convenient to access the Internet on your laptop than on your phone so why shouldn't you pay for it? I'm not saying I like it but that's how capitalism works.

    Bullshit. Utter bullshit.

    If I buy something, I can use it however I like. You can't have it both ways. If you want to give me a limited amount of data, I should be able to do absolutely whatever I want with that data allowance. You're selling me 2 GB per month to use up in any way I see fit. THAT, is how capitalism works-you sell me something, it's mine now, and I do with it whatever in the hell I like without owing you another nickel.

    It doesn't matter that there's an "added value". If I buy flour, you get money for the amount of flour you sold me at the price you asked, and that is the end of you having any say or interest in that portion of flour. You don't get to come back later and say "Wow, that's a nice loaf of bread you baked. That added some value to that flour, let's talk about what you owe me now...". The moment you got paid, you no longer should have any control over what you sold me or how I choose to use it.

    Don't get me wrong, I'm not a rabid capitalism supporter, either. But capitalism involves a transfer of ownership being a transfer of ownership, period. Government-protected monopolies rent-seeking every penny they can get their greedy little mitts on is not a "free" market in any meaningful sense of the word.

  • Re:I don't want this (Score:3, Interesting)

    by Firehed ( 942385 ) on Friday June 04, 2010 @11:16PM (#32466648) Homepage

    You can control how far you drive or how many lights you have on. You can't control how much data an http request is going to send back to you. You can't stop an incompetent fool from resizing a 5MB jpeg with HTML attributes rather than cropping it down to size in [editor of choice]. And with the ubiquity of AJAX these days, even leaving a page open doing nothing can still cost you bandwidth - many widely-used sites continue to communicate with the servers so long as the window is open in order to keep content refreshed, or even set up some sort of web-based IM service (read: Facebook).

    I certainly have no idea what my monthly bandwidth usage is for my home cable bill, and it's a tremendous pain in the ass to find out what I've used on my smartphone. And unlike gas where I know I've been driving more than usual this month, there's really nothing to indicate that my surfing habits included more media-heavy stuff than usual.

    I'm not fundamentally opposed to the idea, but it would need to be both priced reasonably and done in a way where I'm not going to get a surprise thousand-dollar bill. Given the nature of what you're buying, I think the current all-you-can-eat model just makes more sense.

  • Re:Last byte? (Score:3, Interesting)

    by adolf ( 21054 ) <> on Saturday June 05, 2010 @03:01AM (#32467364) Journal

    It's easy to get people to use your Google Voice phone number instead of your real number: Just change your real number to something else.

    I've done it. It's not so hard, but I didn't have a choice: My employer provides my cell phone service, and during a phone shuffle to save money, I got a new number.

    Fortunately, I had already been using Google Voice (then Grand Central) for awhile, and a lot of my personal contacts were already up-to-speed with it, and the rest were just a quick phone call or SMS away. Banks and utilities were already set up to use the GV number, my wife used the GV number, and my own fly-by-night PC fix'em clients all used my GV number.

    Business contacts of my employer (whom I never give my Google Voice number to) were a harder bunch to shuffle over to the new number, but I just figured that any money lost due to this would be that of my employer, who decided to do the shuffling in the first place. *shrug*

    What's more, though, it's a transition that I only had to make once. I can keep my Google Voice number wherever I go, if I change jobs, move to a different side of the country, am stuck working in a DoD facility where I can't have a cell phone but do have a DID extension nearby, or whatever.

    From now on, for the people who are personally important to me, the transition is done. I should never, ever have to do it again.


"I prefer the blunted cudgels of the followers of the Serpent God." -- Sean Doran the Younger