IPhones: Today’s Savior and Today’s Menace

May 11th, 2009 by · Leave a Comment

As if we needed any more proof that our society needs to see a psychiatrist, today's buzz is about the data usage of the iPhone. The Wall Street Journal online has an article today detailing how iPhone users are using 2-4 times the bandwidth used by other smartphone operators.  They have some nice charts showing why this is, but they don't really need them.  Owners of the iPhone use more bandwidth because it's a great device designed to enable them to make use of that bandwidth to do things they want to do.  'Nuff said.

But it seems like just last week we were hearing about how without the iPhone AT&T (NYSE:T, news, filings) would be in tatters and that Verizon (NYSE:VZ, news, filings) was fighting for a foot in the door as well lest it get left behind.  Ok, it really was just last week.  But today, of course, the iPhone is now expected to completely trash their backhaul networks, force impossible capex spending, and overwhelm the all-you-can-eat pricing structure they are selling the things on.  Can we say bipolar?  Of course, it's true that higher data usage will require greater investment, but geez guys - AT&T can afford it.  Have you seen their cash flows?  And frankly, people are neglecting the effects of the innovation that cost pressures will bring.  This is a good thing, and I applaud AT&T for not backing away from it so far.

The roots of all these worries lie in the paradox that pervades the industry.  Service providers of all stripes would simply prefer it if everyone would just buy their bandwidth, even crave it, savor the amazing speeds - so long as they don't actually use it much, in other words - so long as it is just cool and not terribly useful.  Technologies which enable people to do things with the bandwidth they have purchased - whether wireline or wireless - are therefore threats.  So we crack down on bandwidth hogs and such.  It reminds me of the insurance industry, where the numbers work so much better if we only insure the healthy people.

But there's no holding back this tide, both over the airways and through the fiber it is just barely beginning.  All-you-can-eat plans aren't going to go away, nor are bandwidth-hungry applications that let people finally do the things we've always hoped that new technology would bring.  So lets stop whining and find a way to deliver the bandwidth instead, ok?

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Categories: Internet Traffic · Wireless

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