Content Providers and App Developers to Subsidize LTE/3G Bandwidth Costs?

MacRumors · Mar 21, 2012

A story that is getting some traction this morning is a Wall Street Journal article about how quickly new iPad users are consuming their monthly bandwidth allotments over LTE. We covered this story on our iOS Blog. While the conclusion may seem an obvious, carriers are beginning to consider other ways to help shift the bandwidth cost away from the consumer.

In particular, the Wall Street Journal notes that AT&T is considering a plan to do just that by allowing the content providers to pay for usage of their apps:

AT&T, for example, is studying a plan to give app developers and content providers the option to pay for the mobile data their products use, thereby keeping those apps and videos from counting against a user's allotment of data, kind of like an 800-number for apps.

If implemented, this would presumably allow bandwidth usage for certain apps to be free. For example, watching shows from a TV network app such as ABC Player might not count against your monthly bandwidth allotment. Instead, ABC would pay AT&T (or Verizon) for the mobile bandwidth consumed. In return, ABC would likely see increased usage of their app to watch shows and more revenue from in-show advertising.

Mobile carriers in the U.S. have been moving away from unlimited bandwidth plans over the past few years. Instead bandwidth is sold in specific allotments (2GB, 3GB) per month with additional fees for overages.

Article Link: Content Providers and App Developers to Subsidize LTE/3G Bandwidth Costs?

GroundLoop · Mar 21, 2012

Could you imagine how much MLB would have to pay for their At Bat app?

GL

Grimace · Mar 21, 2012

Bring it on -- data consumption is only going to increase!

miles01110 · Mar 21, 2012

Interesting idea, although that just means these apps will just turn into Hulu (ads every 3 minutes) or you'll have to pay a subscription fee, which is basically the same thing as paying for the data plan.

buckyballs · Mar 21, 2012

This is a terrible idea. One of the best things about the App Store for developers is that it allows small companies to compete against the big boys. Doing this allows the big companies (that can afford to) pay the bandwidth costs, while smaller companies that might not be able to afford this will lose out, as the customer will always go to the app that doesn't count against their usage allowance

Surreal · Mar 21, 2012

I cannot see this working in any reasonable way without the 'content providers' charging a subscription fee. That or we will never break free of ads. I am sure we will strike some silly middle ground, but outright paying for what we consume would make so many aspects of this simpler.

andyx3x · Mar 21, 2012

Just wait until the LTE iPhone comes out in the fall. You think people are complaining now, just wait until then.

No more steaming video or music for long periods of time. You'll hit your cap within a few days.

Small White Car · Mar 21, 2012

The network TV example is the best one. They're used to paying for all sorts of outrageous broadcast gear. Shifting their resource from radio transmissions to cellular bandwidth is probably something that will happen over time. That just makes sense for something like ABC.

Not sure how likely it is for other apps, but the idea has some merit for some industries.

AppleDroid · Mar 21, 2012

It's just going to make those content providers raise their prices elsewhere (online content, cable costs etc) so the consumer will end up paying for it somehow.

Porco · Mar 21, 2012

I'm sure it is great to have LTE speeds... but when you've got 3GB data caps I don't really see the point for the majority of users.

I don't really like this idea either though, the answer is for the carriers to stop being so ridiculous and invest some of their huge profits in more infrastructure, not undermining whatever is left of Net Neutrality.

JangoFett124 · Mar 21, 2012

This is just a variation of getting around net neutrality, and puts the smaller shops at a huge disadvantage against the big guys. Don't think that this will stop at being an optional service for developers. And don't think the costs won't be passed back on to the user, anyway.

TheBronx · Mar 21, 2012

Horrible idea.

miles01110 · Mar 21, 2012

buckyballs said:
This is a terrible idea. One of the best things about the App Store for developers is that it allows small companies to compete against the big boys. Doing this allows the big companies (that can afford to) pay the bandwidth costs, while smaller companies that might not be able to afford this will lose out, as the customer will always go to the app that doesn't count against their usage allowance

Not really. Small-timers usually don't make apps that hog bandwidth.

drober30 · Mar 21, 2012

The free ABC Player app would then cost $49.00 a year or 15 minutes of commercials would be embedded into everything you stream.

garylapointe · Mar 21, 2012

I'm so glad they said it's the "users are consuming" and not the "iPads" are doing the consuming...

Gary

iMaven · Mar 21, 2012

AT&T makes developers pay for bandwidth.
Developers pass costs down to AT&T customers.
AT&T customers switch to Verizon.

dgree03 · Mar 21, 2012

Sneaky way for net neutrality? hmmmm

Small White Car · Mar 21, 2012

drober30 said:
The free ABC Player app would then cost $49.00 a year or 15 minutes of commercials would be embedded into everything you stream.

The current free way to get ABC (over the air) currently 'costs' about 15 minutes of ads per hour.

I think it's nice that we WANT that to end just because they're shifting from radio towers to cellular towers...but what reason do we have to EXPECT that?

In other words, why does a change in broadcast technology suddenly mean TV networks can't play the same ads they did before or charge money?

DudeFromDenmark · Mar 21, 2012

This is all wrong - result of monopoly.

Where I live you can easily switch to another provider, and the bindings are relatively short (6month max).

The norm is 30 GB data/month over 3G/4G - and if you hit that, you *may* be throttled to a measly 1 Mbps for the rest of the period. Most don't do that automatically; it's just a means for them to stop abusers.

The proper solution is to give more data to a faster technology instead - but that would be in favour of the user, and such solutions do not work in the US.

We like it here though.

Oh, I pay $30 /mnt for LTE at 80/40 Mbps with 30 GB data.

You don't need to have the providers create new models, you just need them to fix their broken ones.

eric/ · Mar 21, 2012

Horrible idea. This will certainly smash small companies and individual app developers.

Just get rid of stupid bandwidth caps and quit screwing over customers and squeezing every penny out of everybody to line your investors pockets. Try building up a better network and being a good, quality business instead of greedy *******s.

Chumburro2U · Mar 21, 2012

I have an idea

Let the carriers up the data limits by at least double the current rates. And, get this everyone, have the carriers lower the prices of their current data plans by half. How does that sound?

iMaven · Mar 21, 2012

Bye Bye AT&T unlimited data plan.

OrangeSVTguy · Mar 21, 2012

This is stupid. Now matter how you look at it, the consumer is still going to pay for it. Just more people trying to put their hands in the cookie jar.

And when there's more "middle men", we're only going to end up paying more in the long run.

Mr Fusion · Mar 21, 2012

This might be the only way I accept AT&T or Verizon for another contract with capped data: If all my streaming video is subsidized. Otherwise I'm going to Sprint where I can still get unlimited data (I don't care what the speed is as long as I don't have to watch my data usage.)

Nungster · Mar 21, 2012

Just a thought. How about Over the air HD antennae in the next iPad?

Content Providers and App Developers to Subsidize LTE/3G Bandwidth Costs?

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