AT&T: “We know how to fix our network — Overcharge and limit customers with oppressive data caps.”

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by Mike
Posted December 9th, 2009 at 3:04 pm

AT&T has got the greatest and most innovative, forward thinking plan to continue customer growth and carrier loyalty in the comming years — limited data plans. AT&T CEO Ralph de la Vega claims that a mere 3% of AT&T data users are sucking up over 40% of the bandwidth. With as popular and widely avaialbe as the iPhone is as well as the sheer number of data hungry apps within the app store, that’s not too hard to believe. But his “plan” for fixing the network is simply charging heavier users more for how much they use.

On one hand it makes sense, charging heavier users heavier prices. The same model is found in many other areas of society. The quickest example that came to my head is gas for your car. You don’t pay $30 a month for all the gas you want. Instead you pay base don how much you use. Admittedly this isn’t a perfect comparison as gasoline is finite natural resource that is shrinking in numbers. Data pipes are more or less unlimited and only held up by problems with the pipe owners.

Mr. Vega promises that if/when a tiered pricing scheme is adopted, the company will follow FCC and Net Neutrality rules and regulations. However, anyone with any knowledge as to how foreign cellular operators work and have employed tiered data plans for years know that said plans are anything but fair for consumers. For many years Rogers Wireless, a GSM cellular provider in Canada was constantly dogged for extremely pricey data plans that came with measly data alottments. The particular plan that stuck out the most in my head as a perfect example was a plan priced right around $100 that only provided a max of 500MB (I think, don’t quote) per month. 500MB can easily be eaten in a day or two if you actually use your iPhone for what Apple and AT&T market it for.

In the end, it may seem like a tiered solution is the only way to go as those who need more will pay more. But the reality is it will give carriers further ways to nickel and dime us. Want an example? Currently an unlimited 5GB capped plan marketed as unlimited on AT&T costs $30/month. Under a tiered pricing scheme, one would hope that AT&T would make the “unlimited” plan no more than $30 current price or at most $45. We all know that simply won’t be the case however. Instead, I peg any eventual “unlimited” plan on AT&T at $60-$70 per month with lesser plans falling underneath. After all is said and one and a major data plan restructuring is finished, it’s highly likely that the $30 per month plan will be the new “bare bones” edition iPhone plan.

Sad. You bet. Such limits do nothing more than hamper innovation. How is a company supposed to invest and build an innovative new service or software that needs bandwidth but only allows users to use it once per month for five minutes of the day because it runs them right past their insanely low data limit? Such things don’t seem like they’ll happen too often or to too many people, but hitting data caps happens much more than you think. Just ask any Rogers Wireless user who’s been with the company for a few years. Hell, ask any wireless user from any number of European cellular carriers. Data caps around the world aren’t anything new sad as it is. But just because it’s popular doesn’t always make it right.

The days of a fat company with lavish bathroom toilet party, company parties and swanky hotels, and other creature comforts are gone. It’s time for carriers such as AT&T to suck it up, drop the fat, and put their money where their mouth always is — blabbing about how great their network is. Penalizing customers because of their mismanagement of monetary resources isn’t the solution. Ralph, get your story straight and actually listen for two seconds to what your customers really want.

Mashable

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