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An "Untethered" Case Against Data Caps
- Thread starter danielsmu
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I see. Tell me, how much has your text messaging plan price dropped in recent years? Since it's reasonable to assume the price per MB/GB will drop, the same principle should apply here too, no?
Also, you said you pay for the data you use, but what you didn't say is that you also pay for the data you DON'T use. For example, if I'm on the 200MB/month plan and I use 201 MB, I get bumped to the 2GB plan. What about the roughly 1.8 GB I didn't use? I'm still paying for that but I never used that data and will never get to use it.
Sorry if I'm being foolish.
On that note, hopefully AT&T will implement roll-over data eventually, as they have with minutes. Unused Mb will be carried over to the next month.
Texting is unique in that it puts almost zero load on the carrier but can be sold by the unit. So they can charge you $15 for 1500 texts but you could probably fit several hundred thousand texts (at least) worth of data into a $15 200mb data plan. It basically prints money.
I'm the first to admit that it's a racket. That's why I use TextFree and Beejive.
My bad.
INCONCEIVABLE!
Now, no more rhymes and I mean it.
Anybody want a peanut?
What this pricing model means lower cost each month in the future. It's designed to allow AT&T compete as the iPhone moves to other carriers and price becomes the main factor for customers. You seem to think are are hidden fees and suddenly we will all be paying $50 a month for data. That just isn't the case.
And I don't have a texting plan, I pay $0.20 for each and have a $2 to $3 bill each month. Paying $5 a month for a service I don't need is stupid, but I don't need to tell you that.
This is pure speculation. No other carriers have announced that they will be carrying the iphone yet.
I dont think there are any hidden fees. I just think most people who are excited about saving $5-$15 a month haven't considered all the potential negative imapcts this pricing model represents. Per my original post, these impacts are not all purely financial.
Agreed. Which goes to my point about how this move isn't about bandwidth, it's about cash. Otherwise, why not charge everyone the same flat rate per MB?
So it can't be about both bandwidth and cash?
They have a small contingent of heavy, heavy users who account for a pretty hefty fraction of their data, and are also largely responsible for choking up the sky-pipes. 65% of their smartphone user base uses 200mb or less of data per month - so, they reward these people with a cheaper data plan that meets their needs. Another, say, 32% use somewhere between 201mb and 2GB per month. Knock $5 off their plan and send them on their way. Then you've got the top 3%, the folks who are using 5GB-30GB a month, who are the ones really causing the issues. Kick them in the wallet, because they're the ones who are exploiting the network. If they decide to keep using, then they get charged for it. If they cut down to 2GB or less, then it frees up bandwidth. Otherwise, they cut and run for, say, Verizon, who has a soft 5GB cap on their unlimited plans anyway.
It's just a good move from an economics standpoint. The vast majority of people are happy at having their monthly rates reduced, and the folks who are hammering the system mercilessly either pay up or take a hike.
They have a small contingent of heavy, heavy users who account for a pretty hefty fraction of their data, and are also largely responsible for choking up the sky-pipes. 65% of their smartphone user base uses 200mb or less of data per month - so, they reward these people with a cheaper data plan that meets their needs. Another, say, 32% use somewhere between 201mb and 2GB per month. Knock $5 off their plan and send them on their way. Then you've got the top 3%, the folks who are using 5GB-30GB a month, who are the ones really causing the issues. Kick them in the wallet, because they're the ones who are exploiting the network. If they decide to keep using, then they get charged for it. If they cut down to 2GB or less, then it frees up bandwidth. Otherwise, they cut and run for, say, Verizon, who has a soft 5GB cap on their unlimited plans anyway.
It's just a good move from an economics standpoint. The vast majority of people are happy at having their monthly rates reduced, and the folks who are hammering the system mercilessly either pay up or take a hike.
Or be grand-fathered in and remain on the network.
Eh, according to some of the rewordings that have been going around today you won't be able to carry the plan to any new model, and/or the unlimited plan will only continue until the end of your contract.
At the very least, this puts a limit on new users' ability to stress the network.
the way it works is that you have companies providing internet media services with very high gross and net margins and are raking in the cash. the telco's have very low margins, high capital expenses to continually upgrade infrastructure, and their product is considered a commodity. what they really don't like is that they sell bonds to pay for the upgrades and then they need to upgrade again before the bonds have been repaid.
netflix/amazon/youtube have all these cool plans to rake in the cash and the carriers want some of the money as well. nothing wrong with it. people are willing to buy apple products at their ridiculous margins and even praise apple for it. but when AT&T tries to get the same margins they are suddenly seen as greedy.
it's the same as the battle between retailers and manufacturers
i remember the old days of data where if you go past some low limit it's $10 a megabyte. this is why i like the new AT&T plans. the whole unlimited thing only came around because everyone was laying fiber like crazy in the 1990's and there was free money flowing in to build out the last mile where the real costs are. unlike wired, there are big problems in offering unlimited wireless data and allowing all the new applications on it.
people complain but the amount of data people use has grown like it's the 1990's all over again and you can't just add more fiber or a few switches. or dig up the ground. wireless spectrum costs billions of $$$ from the FCC and there are strict rules in how you use it. and it's a limited resource.
even with wired we are going to see caps because a small percentage of people want to max their connection 24x7. even corporate networks weren't designed that way. TCP/IP and ethernet were designed so that if a circuit is 50% full then anything past that you get problems due to packet collisions.
most of the costs are in the last mile. aka the cell phone tower. some localities are prohibiting carriers from setting up towers because it will ruin the view. AT&T is going around this by putting in thousands of wifi access points. unless something magical happens expect all the carriers to push customers to use wifi for last mile access and cap the cell network access. i see cell towers on NYC buildings. it takes a lot of money to run these things. rent, electricity, support, etc. a lot more than a $500 wifi access point in starbucks or some public place
and in the last year i've read a lot of stories of people on the internet showing off how they are tethering and using up crazy amounts of bandwidth and stupid AT&T can't stop them. and now they are the ones complaining the most. it's always the minority that uses the most resources that starts to complain when they have to pay a fair price for them
every business offers a low margin product and then a high margin add on to make the profits. nothing different here
