6 ms·

AT&T's new data plans will ruin the future of mobile

26 points by zacharye 16y ago

slapshot 16y ago
Or, AT&T's new data plans will empower the future of mobile by making mobile app developers use bandwidth intelligently rather than wastefully. If bandwidth is free, there's no reason to focus on preserving it. The result is a tragedy of the commons where apps use more bandwidth than they have to, slowing the network for everyone and making some apps impossible to run in crowded (SXSW) or remote environments. Maybe a challenge to use bandwidth wisely will spur innovation.
- maukdaddy 16y ago
  This! Same concept can be applied to water in countries like the US. Our water is insanely cheap or free in more places, giving consumers no incentive to conserve or otherwise limit their consumption.
  - Raphael 16y ago
    Digital bandwidth can be expanded indefinitely, whereas most water is so salty that it is undrinkable.
- dbrannan 16y ago
  Oh yes, now everything mobile will look like Craigslist. Gee, what a step forward for everyone!
  - bokchoi 16y ago
    Or hackernews?
  - Raphael 16y ago
    CSS doesn't take much space. That gives you colors, fonts, and layout.
- aquark 16y ago
  I'd expect performance to be a much more immediate driver for bandwidth conservation than cost. Consumers would have a hard time connecting a single app with their monthly bill, but know how responsive the app feels when the use it.
furyg3 16y ago
How else will a service like Hulu be able to reach mobile devices? It would eat through caps like a hippy at a Phish concert. Wow. With all the pun threads on the internet nowadays... that's really one of the best ones I've seen in a long time..
mdasen 16y ago
The article points out a definite possibility. However, I prefer to be optimistic. Usage fees could give carriers a large motivation to make their networks faster and add capacity. As carriers increase capacity and speed, they will likely compete with each other to drive down prices per unit of usage. Right now, most carriers are offering 5GB for $30 and AT&T just made it 2GB for $25. That said, I can't see that pricing sticking around for long. As the four carriers push into 4G in the coming year, there will be intense competition to offer users data services. As capacity increases, carriers will take into consideration that increase as well as the cost of building that increase and figure out what they can offer more cheaply. Usage fees aren't bad when they're modest. Most of us pay for heat and electricity that way. For those of us who have a server, we get an allocation of bandwidth and overages are usually very reasonable - or with Amazon, you pay for what you use. Now, telecoms haven't always had the nicest pricing structures in the past, but I remember when long-distance service became very competitive and the price of minutes sunk. I'm hoping that the combination of 4G and two new entrants to the wireless world (Cricket and MetroPCS) will make data look more like long distance service. Usage fees aren't terrible. Carriers do have costs to increase capacity and by charging those who are using that capacity, they have an incentive to build a good network and don't end up making light users subsidize heavy users. We must be vigilant that usage fees aren't onerous or out of line with costs, but I'm hoping that the combination of competition and increased capacity will keep prices down.
- bonzoesc 16y ago
  Right now, most carriers are offering 5GB for $30 and AT&T just made it 2GB for $25. That said, I can't see that pricing sticking around for long. […] Usage fees aren't bad when they're modest. Most of us pay for heat and electricity that way. 2GB for $25 is pretty modest for current wireless devices; most users (including tech industry journalists[1]) don't hit it at all. Therefore, for an average month of usage, 2GB for $25 is cheaper than 5GB or unlimited for $30, simply because it's not pro-rated if you use less. The only real problem is selling it to the non-nerd set. [1]: http://arstechnica.com/telecom/news/2010/06/iphone-data-usage-we-show-you-ours-please-show-us-yours.ars http://arstechnica.com/telecom/news/2010/06/iphone-data-usag...
pkulak 16y ago
Sounds like the price of this resource is just finally getting in line with its actual cost. Bandwidth has never been free, and just hoping and praying that your customers don't use too much is stupid. When there was one real smart phone, and it could only use edge, with no custom apps and not many other services set up to use it, you could get away with "unlimited". Not now. I mean, this is capitalism, right? How is one company going to charge too much more than the cost of the bandwidth without another company undercutting them? I don't pay monthly for unlimited breakfast cereal, or gasoline, and yet somehow capitalism has managed to keep those prices in check. I have no idea why this guy thinks that bandwidth is so different from every other good or service.
- w1ntermute 16y ago
  You can't compare breakfast cereal or gasoline to a cellular connection. The cellular industry, due to its high barriers to entry (stemming from the enormous initial infrastructure costs), tends towards a natural monopoly. In this case, it hasn't quite reached a monopoly - instead, we have 4 main companies (AT&T, Verizon, Sprint, and T-Mobile), also known as an oligopoly. I know there are smaller carriers, but since they don't provide coverage everywhere, their product is not the same as the one provided by the 4 major carriers. The problem is that when there is a disparity between the value of a product to the buyer and the cost of production to a seller, if there is natural competition (cereal, gasoline, etc. are relatively close to natural competition), the actual price will tend towards the cost for the sellers, since companies will keep undercutting each other until the price drops to the lowest they can accept without losing money on each sale. OTOH, if there is a natural monopoly (or something close to it), the actual price will tend towards the value for the buyers, since the lack of competition allows the price to rise as high as the buyer will tolerate. In the case of bandwidth, the marginal cost for the telecom companies for each byte transferred is miniscule compared to the value it provides to us. If we had an industry with natural competition (like they do in other countries where the government owns the pipes and the telecom companies simply lease it out), then we would only be paying that miniscule cost (which essentially rounds off to a flat monthly fee for unlimited access). But since we have an industry that tends towards a natural monopoly, the companies will milk us for every penny we're willing to give them.
deleted 16y ago
[deleted]
Enlightenment 16y ago
ha ha !!! ha ha !!! ha ha !!!
jasonkester 16y ago
America had just about caught up to the rest of the world for a second there, but this puts us back where we're comfortable, five years behind everybody else. A couple months ago, I was in Colombia, where for $20/month you can get unlimited wireless broadband, pre-paid, without a contract. Colombia, fer cryin' out loud, where they still have insurgents attacking the army and pirates operating near major cities, but somehow they manage to figure out how to do mobile broadband better than the USA. Needless to say, Europe and Asia left us in the dust years ago. It's incredible that I still can't walk into a store in LA and buy a USB stick with a month's worth of unlimited bandwidth on it.
- sjs 16y ago
  I was talking to my sister and her husband the other day. They recently moved to Singapore and have 12gb/month data plans. I don't know what they pay but as they're both casual users I assume they didn't get anything outrageous. Made me very jealous as I pay CAD$20/month for 1gb with Rogers here in Canada. I guarantee they're not paying $240/month for that plan. I checked the SingTel site[1] and I'm guessing that they each have the $39 or $56 plans, $30 and $45 in Canadian dollars. That's their entire plan including voice, data, and everything else. I wish I didn't know how good it is in other countries. Fucking useless CRTC doesn't do anything about Canadian telecoms colluding and price fixing. The telecoms here have no interest in competing with each other. [1] http://info.singtel.com/personal/communication/mobile/mobile-phones/iphone http://info.singtel.com/personal/communication/mobile/mobile...
  - aquark 16y ago
    As a fellow Canadian I agree with the sentiment and would love to see lower prices. But to be fair(er) to the telco's, it is a little easier to provide decent cellular coverage across Singapore than it is across even the densely populated swaths of Canada. As a rural Canadian I'm not sure I could push much more than 2GB through my home internet connection a month if used it 24/7.
    - sjs 16y ago
      That's a common line from the telcos but in reality very little of Canada is actually populated and a huge percentage of our people live within 100-200k of the US border. The most difficult area to cover is BC because of all the trees & mountains. If you look at coverage maps they seem to have little trouble covering even the most rural parts of Alberta. Say Rogers has 1,000,000 3G customers (very modest). How many years does it take to pay off the cost of building the network? 2? 5? 10? At $50-80/month per customer they pull in at least $600,000,000/year. I don't care what their operational costs are they can cover it. That's assuming they have only 1,000,00 customers paying $50/month, while in reality they probably have closer to 5 or 10 million customers paying them upwards of $80/month. I just agreed to pay Rogers $30 for 10MB of roaming data in the US while I'm at WWDC. I'm obviously going to go over that and will be charged $3/MB all the way up beyond the 10MB. That is just greed. They take advantage of people who either have the company paying the bills or don't really know how much data they'll use. There's no way I'll use my phone normally while I'm away, but I should be able to. This has nothing to do with Canadian infrastructure and everything to do with being taken advantage of because we are locked into contracts, and even if we weren't Canadian telcos do not compete with each other. They all have outrageous pricing last I checked. Maybe things have changed with providers besides Rogers during the last couple years but I doubt it. They have no reason to compete with each other if they can fix prices and all make a killing. Prices are too similar across the board for me to think otherwise.
gojomo 16y ago
Except when moving, ubiquitous wifi would be better than 3G anyway. So instead of whining, let's blanket the nation with open wifi access points. This doesn't require any new lobbying or help from the mobile oligopoly.
malbiniak 16y ago
In short, the net neutrality debate just went mobile.
rbarooah 16y ago
In the uk where there are 5 competing GSM networks, you can get 10GB for £15 ($22) as a microsim for the iPad with no contract. You can do even better if you're willing to sign up for a long period. AT&T's deal is more than 5 times the price of that. Is there a good explanation for this other than lack of competition?
- jsz0 16y ago
  Geography & population density play some role. The landmass of the US is 70x larger than the UK, which is about the size of Alabama, but the US has only 5x more population. I don't think that totally explains the 5x price difference but it's worth considering.

26 points by zacharye 16y ago

Or, AT&T's new data plans will empower the future of mobile by making mobile app developers use bandwidth intelligently rather than wastefully. If bandwidth is free, there's no reason to focus on preserving it. The result is a tragedy of the commons where apps use more bandwidth than they have to, slowing the network for everyone and making some apps impossible to run in crowded (SXSW) or remote environments. Maybe a challenge to use bandwidth wisely will spur innovation.

maukdaddy 16y ago
This! Same concept can be applied to water in countries like the US. Our water is insanely cheap or free in more places, giving consumers no incentive to conserve or otherwise limit their consumption.
- Raphael 16y ago
  Digital bandwidth can be expanded indefinitely, whereas most water is so salty that it is undrinkable.
dbrannan 16y ago
Oh yes, now everything mobile will look like Craigslist. Gee, what a step forward for everyone!
- bokchoi 16y ago
  Or hackernews?
- Raphael 16y ago
  CSS doesn't take much space. That gives you colors, fonts, and layout.
aquark 16y ago
I'd expect performance to be a much more immediate driver for bandwidth conservation than cost. Consumers would have a hard time connecting a single app with their monthly bill, but know how responsive the app feels when the use it.

furyg3 16y ago

How else will a service like Hulu be able to reach mobile devices? It would eat through caps like a hippy at a Phish concert. Wow. With all the pun threads on the internet nowadays... that's really one of the best ones I've seen in a long time..

mdasen 16y ago

The article points out a definite possibility. However, I prefer to be optimistic. Usage fees could give carriers a large motivation to make their networks faster and add capacity. As carriers increase capacity and speed, they will likely compete with each other to drive down prices per unit of usage. Right now, most carriers are offering 5GB for $30 and AT&T just made it 2GB for $25. That said, I can't see that pricing sticking around for long. As the four carriers push into 4G in the coming year, there will be intense competition to offer users data services. As capacity increases, carriers will take into consideration that increase as well as the cost of building that increase and figure out what they can offer more cheaply. Usage fees aren't bad when they're modest. Most of us pay for heat and electricity that way. For those of us who have a server, we get an allocation of bandwidth and overages are usually very reasonable - or with Amazon, you pay for what you use. Now, telecoms haven't always had the nicest pricing structures in the past, but I remember when long-distance service became very competitive and the price of minutes sunk. I'm hoping that the combination of 4G and two new entrants to the wireless world (Cricket and MetroPCS) will make data look more like long distance service. Usage fees aren't terrible. Carriers do have costs to increase capacity and by charging those who are using that capacity, they have an incentive to build a good network and don't end up making light users subsidize heavy users. We must be vigilant that usage fees aren't onerous or out of line with costs, but I'm hoping that the combination of competition and increased capacity will keep prices down.

bonzoesc 16y ago
Right now, most carriers are offering 5GB for $30 and AT&T just made it 2GB for $25. That said, I can't see that pricing sticking around for long. […] Usage fees aren't bad when they're modest. Most of us pay for heat and electricity that way. 2GB for $25 is pretty modest for current wireless devices; most users (including tech industry journalists[1]) don't hit it at all. Therefore, for an average month of usage, 2GB for $25 is cheaper than 5GB or unlimited for $30, simply because it's not pro-rated if you use less. The only real problem is selling it to the non-nerd set. [1]: http://arstechnica.com/telecom/news/2010/06/iphone-data-usage-we-show-you-ours-please-show-us-yours.ars http://arstechnica.com/telecom/news/2010/06/iphone-data-usag...

pkulak 16y ago

Sounds like the price of this resource is just finally getting in line with its actual cost. Bandwidth has never been free, and just hoping and praying that your customers don't use too much is stupid. When there was one real smart phone, and it could only use edge, with no custom apps and not many other services set up to use it, you could get away with "unlimited". Not now. I mean, this is capitalism, right? How is one company going to charge too much more than the cost of the bandwidth without another company undercutting them? I don't pay monthly for unlimited breakfast cereal, or gasoline, and yet somehow capitalism has managed to keep those prices in check. I have no idea why this guy thinks that bandwidth is so different from every other good or service.

w1ntermute 16y ago
You can't compare breakfast cereal or gasoline to a cellular connection. The cellular industry, due to its high barriers to entry (stemming from the enormous initial infrastructure costs), tends towards a natural monopoly. In this case, it hasn't quite reached a monopoly - instead, we have 4 main companies (AT&T, Verizon, Sprint, and T-Mobile), also known as an oligopoly. I know there are smaller carriers, but since they don't provide coverage everywhere, their product is not the same as the one provided by the 4 major carriers. The problem is that when there is a disparity between the value of a product to the buyer and the cost of production to a seller, if there is natural competition (cereal, gasoline, etc. are relatively close to natural competition), the actual price will tend towards the cost for the sellers, since companies will keep undercutting each other until the price drops to the lowest they can accept without losing money on each sale. OTOH, if there is a natural monopoly (or something close to it), the actual price will tend towards the value for the buyers, since the lack of competition allows the price to rise as high as the buyer will tolerate. In the case of bandwidth, the marginal cost for the telecom companies for each byte transferred is miniscule compared to the value it provides to us. If we had an industry with natural competition (like they do in other countries where the government owns the pipes and the telecom companies simply lease it out), then we would only be paying that miniscule cost (which essentially rounds off to a flat monthly fee for unlimited access). But since we have an industry that tends towards a natural monopoly, the companies will milk us for every penny we're willing to give them.

deleted 16y ago

[deleted]

Enlightenment 16y ago

ha ha !!! ha ha !!! ha ha !!!

jasonkester 16y ago

America had just about caught up to the rest of the world for a second there, but this puts us back where we're comfortable, five years behind everybody else. A couple months ago, I was in Colombia, where for $20/month you can get unlimited wireless broadband, pre-paid, without a contract. Colombia, fer cryin' out loud, where they still have insurgents attacking the army and pirates operating near major cities, but somehow they manage to figure out how to do mobile broadband better than the USA. Needless to say, Europe and Asia left us in the dust years ago. It's incredible that I still can't walk into a store in LA and buy a USB stick with a month's worth of unlimited bandwidth on it.

sjs 16y ago
I was talking to my sister and her husband the other day. They recently moved to Singapore and have 12gb/month data plans. I don't know what they pay but as they're both casual users I assume they didn't get anything outrageous. Made me very jealous as I pay CAD$20/month for 1gb with Rogers here in Canada. I guarantee they're not paying $240/month for that plan. I checked the SingTel site[1] and I'm guessing that they each have the $39 or $56 plans, $30 and $45 in Canadian dollars. That's their entire plan including voice, data, and everything else. I wish I didn't know how good it is in other countries. Fucking useless CRTC doesn't do anything about Canadian telecoms colluding and price fixing. The telecoms here have no interest in competing with each other. [1] http://info.singtel.com/personal/communication/mobile/mobile-phones/iphone http://info.singtel.com/personal/communication/mobile/mobile...
- aquark 16y ago
  As a fellow Canadian I agree with the sentiment and would love to see lower prices. But to be fair(er) to the telco's, it is a little easier to provide decent cellular coverage across Singapore than it is across even the densely populated swaths of Canada. As a rural Canadian I'm not sure I could push much more than 2GB through my home internet connection a month if used it 24/7.
  - sjs 16y ago
    That's a common line from the telcos but in reality very little of Canada is actually populated and a huge percentage of our people live within 100-200k of the US border. The most difficult area to cover is BC because of all the trees & mountains. If you look at coverage maps they seem to have little trouble covering even the most rural parts of Alberta. Say Rogers has 1,000,000 3G customers (very modest). How many years does it take to pay off the cost of building the network? 2? 5? 10? At $50-80/month per customer they pull in at least $600,000,000/year. I don't care what their operational costs are they can cover it. That's assuming they have only 1,000,00 customers paying $50/month, while in reality they probably have closer to 5 or 10 million customers paying them upwards of $80/month. I just agreed to pay Rogers $30 for 10MB of roaming data in the US while I'm at WWDC. I'm obviously going to go over that and will be charged $3/MB all the way up beyond the 10MB. That is just greed. They take advantage of people who either have the company paying the bills or don't really know how much data they'll use. There's no way I'll use my phone normally while I'm away, but I should be able to. This has nothing to do with Canadian infrastructure and everything to do with being taken advantage of because we are locked into contracts, and even if we weren't Canadian telcos do not compete with each other. They all have outrageous pricing last I checked. Maybe things have changed with providers besides Rogers during the last couple years but I doubt it. They have no reason to compete with each other if they can fix prices and all make a killing. Prices are too similar across the board for me to think otherwise.

gojomo 16y ago

Except when moving, ubiquitous wifi would be better than 3G anyway. So instead of whining, let's blanket the nation with open wifi access points. This doesn't require any new lobbying or help from the mobile oligopoly.

malbiniak 16y ago

In short, the net neutrality debate just went mobile.

rbarooah 16y ago

In the uk where there are 5 competing GSM networks, you can get 10GB for £15 ($22) as a microsim for the iPad with no contract. You can do even better if you're willing to sign up for a long period. AT&T's deal is more than 5 times the price of that. Is there a good explanation for this other than lack of competition?

jsz0 16y ago
Geography & population density play some role. The landmass of the US is 70x larger than the UK, which is about the size of Alabama, but the US has only 5x more population. I don't think that totally explains the 5x price difference but it's worth considering.