So AT&T Finally Decided to Try Caps, Eh?

June 3rd, 2010 by · 6 Comments

I love the outrage.  I mean, for the media and blogosphere to act shocked and hurt when they've been preparing for over a year for some wireless carrier to try this - it's hard man, real hard.  So AT&T is finally going to try its hand at bandwidth caps for its 3G wireless plans, and unsurprisingly they are deflecting the blame onto the people who love their product the most err I mean waste the most bandwidth.  Lower prices for the good, decent users who love having bandwidth at their fingertips but use it sparingly, and higher prices for the evil, gluttonous, bandwidth hogs who ruin it for the rest.  Ok, well maybe they didn't quite say it that way, but still...  

The fact that Skype's 3G app for the iPhone just landed is of course not a coincidence.  Now it's true that VoIP bandwidth is far less than video or even music, but the key is perception.  Users don't really know how much bandwidth they are using while talking on the phone, nor do they want to.  Hence, the cap will make them think twice about using Skype over 3G as a replacement, and that will slow them down even if economically it shouldn't.  Nevertheless, sooner or later usage had to be tied to price else the economics would soon break down as bandwidth burning apps proliferate.

Paul Kouroupas suggests though that we let the market take care of this, and I agree.  Suppose all those heavy bandwidth users now take their business to Verizon and Sprint, burdening their networks instead - those companies will have to deal with the traffic and the cost structure too and maybe they'll find a better way.   Or perhaps they will find their way to WiMAX networks, putting those to a real test at last.  But hey, AT&T can take a punch.  The iPhone has given them a boost in subscribers but a bigger boost in traffic, and now perhaps as a result they must spend some of their gains by taking the lead in trying to us all from all-you-can-eat plans.  Think of it as a bit of bandwidth karma.

The first effort is bound to be improved upon by the competition, so let's let this one play out before we get Julius involved...  You'd think he'd be busy enough already at the moment.

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Categories: Internet Traffic · VoIP · Wireless

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6 Comments So Far


  • This mainly affects iPhone junkies, who cannot take their devices elsewhere. (Some Congressmen are going to be mad.)

    T-Mobile is rolling out a flat rate data plan that caps out at 5GB per month. That’s all you get according to Stacey @ GigaOM.

    Makes you wonder what happens next year when the iPhone isn’t exclusive? Or how mad Jobs must be since this will surely mean more Android devices.

    • Rob Powell says:

      For now perhaps, but I suspect some form of it will spread to any phones, android or not, which burn enough bandwidth to make trouble.

  • Ryan says:

    In Canada we’ve never known what “unlimited” means. However, I view my 6G plan as unlimited.

    The only time I’ve used over 2G was when I tethered my laptop for the entire weekend.

  • carlk says:

    Rob Powell seems somewhat “bothered” by the audacity of this carrier taking such draconian measures-pun intended-even while if I’ve read him correctly over time, he had been predicting this for becoming universal or standard practice.

    Ken Dulaney, an analyst with Gartner, said he expected Verizon to try to capitalize on AT&T’s decision to eliminate unlimited pricing, at least at first.

    “I suspect we’ll see Verizon putting out Southwest Airlines-style ads saying, ‘Our bags still fly free,’ ” he said. But he agreed with other analysts that Verizon would eventually join not just AT&T but most other carriers around the world that, for years, have had tiered pricing or charged on the basis of use.

    http://finance.yahoo.com/news/Heaviest-Users-of-Phone-Data-nytimes-826731331.html;_ylt=Am_nq2455.36RYlM_5BrMqe7YWsA;_ylu=X3oDMTE2b2swdjlnBHBvcwMxMARzZWMDdG9wU3RvcmllcwRzbGsDbW9yZXdpcmVsZXNz?x=0&sec=topStories&pos=8&asset=&ccode=

    • Rob Powell says:

      I’m not really bothered by the audacity of AT&T, I’m just sort of laughing at the whole process. Everyone has unrealistic expectations here. Users want unlimited data. AT&T wants customers who pay them lots of money but only check their email twice a week. And the media and blogosphere wants justice. And the winner shall be…. maybe Clearwire? 🙂

  • carlk says:

    I was glad that Dr. Kleinrock agreed with me even though he depicted a most gloomy outcome for AT&T in the final analysis.

    He believed that some type of sharing relationship must occur between infrastructure owners and content providers with respect to the advertising space in order for a healthy environment to persist. One needn’t look further than GOOGLE or APPLE today for a hint as respects lop sided revenue streams by APP providers versus transport systems.

    In the spirit of Benjamin Graham, Dr. Kleinrock can be quoted as stating, “In the short term AT&T was very right; in the long term very wrong” whilst referring to them ignoring the power of the internet at its earliest stage when its first message was being sent from UCLA to STANFORD, a message that did not get completed entirely when texting “LOGON.”

    Have you ever researched (3)’s slide presentations regarding their references to growth in “advertising revenues” as part of their CDN space?

    By the way, speaking of CDN’s with “value added” business models, see AKAMAI run, run AKAMAI run! imo

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