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In Defense of AT&T's New Data Pricing Scheme

longacre (1090157) writes | more than 4 years ago

Wireless Networking 2

longacre (1090157) writes "Glen Derene at PopMech defends AT&T's new pricing plan: "AT&T's move away from all-you-can-eat pricing on June 2 has enraged many in the tech press--most of whom, I assume, own iPhones. I agree that some aspects of AT&T's pricing plan are unfair and even nonsensical. For example, charging an extra $20 a month for tethering, on top of an existing data plan, means that you are essentially paying twice for the same data usage. That being said, AT&T is taking its first, albeit clumsy, step toward a more equitable and sane way of moving data around the country--one that may end up solving the largely misunderstood problem of net neutrality."

He compares bandwidth to electricity: "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."

And says that the current system gives no incentive for carriers to improve service: "There's no extra revenue generated by all that extra usage, so they are content to offer a quality of service that is only as good as their customers will bear (and many of those customers are trapped by multiyear contracts). If customers pay by the megabyte, then bad service directly equates to lost revenue for the carrier. This becomes especially important as we migrate toward 4G networks. Because on 4G networks, everything is data--including voice calls, which are handled as VoIP. Dropped calls equal undelivered bits, and undelivered bits should mean less revenue.""

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Logic as applied to monopolies isn't logical. (1)

NicknamesAreStupid (1040118) | more than 4 years ago | (#32461172)

If Glen's premise were true for AT&T, then they would have a better 3G network than Verizon because they have had bigger market opportunity with the larger and faster growing base of smart phones (i.e, iPhones) that use 3G bandwidth. Alas, Verizon offers more coverage and more uniform QoS and is widening the gap with 4G. AT&T may be faster in some places, e.g., Apple HQ in Cupertino, but their coverage is very spotty and improving more slowly than its competitors. It seems that cellular vendors' business decisions are driven more by internal priorities -- RIO, labor contracts, tariffs, federal regulations, and "business synergies." Customers are still not customers; they are subscribers. This latest change in billing just puts cellular data in line with their voice billing, which has been the same for over a century.

The Sell Data Like Electricity (1)

WrongSizeGlass (838941) | more than 4 years ago | (#32463554)

If the comparison between data and electricity is valid, then sell data like electricity.
* My toaster, TV, computer, etc all run on the same electricity so why must my phone be supplied by one and only one vendor's data? I have the option of picking my electric company, and businesses have even more choices for electricity, so why not for data?
* I pay a reasonable price for electricity, and I'm billed for only the amount that I use. I don't need to buy it in large blocks which may never be completely used, and I don't have to buy another block if the first block is used.

Don't compare data to electricity unless the providers are willing and able to sell & deliver it the same way. Phone companies have been able to bill for exact usage for decades so why is this such a hurdle for these companies selling data? It's because they want to charge someone for 200MB, or 2GB, even though they know the customer will never use all of it. Billing for exact usage, instead of fees based on arbitrary blocks of potential usage, is not in the best financial interest of the data providers.
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