AT&T Announces iPhone Tethering and New Smartphone Data Plans

[marksman]

I was pretty ticked about this at first... but like some others... once I checked my usage data, I was rather surprised that this may actually save me a little money...

The only thing that I'm completely unsure of is the tethering.. am I committed to the $20/month for the duration of my contract, or is it a pay as needed service like the iPad where I only sign-up for it in months that I might need it.

I don't believe tethering is a contract option, so I believe you can activate it for a billing cycle. Not sure how it works though if it is pro-rated or not.

Agree completely. This sealed the deal for me. 1yr contract left on my 3GS and not going to upgrade now to the new iphone. In 1yr I will just see what else is out there (hopefully android UI will be better in 1yr) and move on to another carrier which is able to actually let me use my phone as a PHONE!

What does AT&T Data rates have to do with using a phone as a phone? A phone is something you make phone calls on...

Goody for you. I just checked my 6 months usage. I averaged 750 with one month at 2.1. Unlike you I do not declare that everyone has the same usage as me. For people who travel a lot and use their phones for business, 2gB can be problematic. Even more so if they tether (my laptop burns through about 250MB per day with a verizon air card).

For you it would be great though. You pay for the $25 plan for six months, so you save $30. For the one extra month, you pay $10 for the overage. You still end up paying $20 less.

If you travel a lot and use a lot of data, it is reasonable to pay for it right?

It is not like the prices are crazy. You can get 5 gigs of data and tethering for $75 a month. That has to be able to fulfill the needs of most traveling business people.

People expect to get unlimited bandwidth tethered for $30. That is not going to happen, because the amount of bandwidth the top percentage of users use. Otherwise everyone else has to significantly overpay to subsidize them.

Don't you think it is reasonable for people to pay as close to their fair share of resources in a situation like this as possible? Obviously you can't make it entirely fair, but you can get it closer and have those who use extreme amounts of resources pay more.

I just don't know what people expect? For everyone who has their monthly charges lowered to be, yeah you are right, I should pay more so your internet is cheaper.

I don't want to pay for your internet, I really don't.

Here's the problem I'm having with this plan. Sure, 98% of the users are using less than 2GB/mo, but that is WITHOUT the tethering option. Where I live, I currently cannot get DSL or cable internet access (in the Bay Area, CA USA), so the only reliable option is to use a USB modem (satellite is not a viable option) and I pay the AT&T $60/mo for unlimited usage in addition to the costs of my iPhone3GS.

Here are my data rates for both for the last 6 months. Also, I only have Edge access and not 3G from my house, so it's not like I'm streaming Netflix, Hulu or YouTube every day, since it's way too slow to do any of that.

USB Modem iPhone3GS
3.3 GB 274 MB
4.5 GB 237 MB
3.5 GB 246 MB
3.0 GB 360 MB
3.0 GB 280 MB
1.9 GB 207 MB

I'm going to guess that tethering will dramatically increase the usage for most people (or at least it would for me). I think 2GB is a completely ridiculous limit for the tethering option. Just my 2 cents.......

So your highest usage was just under 5 gigs a month. 5 Gigs of data on the grandfathered unlimited is $30.00. Under the new plan is $55 a month. With tethering is $75 a month.

That is not crazy outrageous. Especially considering you are in the weird position of living in a highly populated area but don't have any access to wired internet.

So with your USB data card and your iphone you pay $90 a month. With the new plan and tethering to get the same max 5 gigs, you pay $75 a month. You save a lot of money with this new plan. Not to mention because of the overage levels, some months you might pay only $45 a month.

This plan is a boon for you. That is the thing, most people are not analyzing this, instead they are worried about what-ifs and maybes.

Two of the people I quoted in this post who are upset about this change will save money because of it. I really don't think people are taking the time to look at this properly. I understand that needs might change and other more intensive data usage etc... but Wifi is still a significant part of a normal person's usage support so it is not going to be a big issue for the typical customer.

 

[Alchematron]

Sprint EVO?

Yes Please!

 

[TechNutt]

You're very welcome.

And it's not to say that texts couldn't be priced cheaper. (Although those all-you-can-send deals seem pretty good if you text all the time.)

But they're definitely not "just data" as so many people think, and they're certainly not free to the carrier. And they can cause a lot of extra control channel congestion at the towers.

I worked for a wireless carrier and data packets for texts actually cause very little congestion on networked towers. And, for clarification, even voice calls are sent as "data" packets--regardless if CDMA or GSM.

Texts should be significantly cheaper but AT$T doesn't give a rat damn.

 

[marksman]

Hey guys,

Did anyone catch if AT&T said anything about being able to switch between the $15 and $25 data plans from month to month? I am concerned that I will sign up for one and realized I use much more/less depending and want to switch to the other, but may not be allowed to for the length of the contract

Cheers,
hqz

I am sure someone else answered you, but just in case not, yes you can switch. They are not tied to the contract.

DataPro has a 2GB cap. Then AT&T has the gall to charge $20 extra for tethering and STILL keeps the 2GB cap in effect?! WTF? Data is data. If there is going to be a 2GB cap then why charge extra for tethering?

FU AT&T.

People who use tethering will use more data. So the only other option is to raise the price for data for EVERYONE. So everyone can pay $5-$10 more a month so you can tether for a lower price.

F the people who want me to subsidize their ability to tether. You want to tether you pay for it. If I want to tether I will pay for it.

This idea that they should lower tethering costs so everyone else can pay for it for those who use it is dumb.

 

[marksman]

The true fact is that AT&T is excessively greedy. The are making billions of dollars and trying to squeeze every last dime out of people. I don't even have an iPhone but it does upset me with their pricing schemes.

Apple needs to end their exclusive contract with AT&T and open it up to all carriers to create competition and drive these monthly fees to a more reasonable level.

Clearly they are greedy. That is epitomized by them charging millions of people less money every month with these new changes.

When ever someone tries to charge me less for the same thing, I always think they are so freaking greedy. Greedy Greed Greedersons.

 

[polaris20]

I don't know where that cap comes from because it has been confirmed by Verizon that there is no cap on the Smartphone for web and e-mail plans. No Softcap. No cap of any kind.

Ah, see here:

The 5GB data usage plans are for following and ONLY for the following: USB Modems, PC Cards, ExpressCards, MiFi 2200, Notebooks, Netbooks, OR if you are tethering a device from a: Mobile Broadband Connect-capable smartphone or blackberry. Shown in the PDF file below.

Mobile Broadband Plans for USB Modems.pdf

It comes from that. All the other devices, NOT the Droid, are capped. I wrongly assumed that since they capped the cards, USB modems, MyFi, etc. that the Droid too was capped.

 

[TechNutt]

That's exactly the point. ATT sets limits in EXACTLY the places that will force you to pay more, every time.

why do their text packages jump from 200 to 1000? because EVERYONE sends more than 200. the low end is SO low as to be useless.

we are giving up 3gigs for $5. that is the ********. 3gigs are worth MORE than $5.

pro-rate that amount (right, that'll happen) ... we should be paying $12 for 2gig.

but of course, ATT has been lying about their network all along. the lies are catching up with them, so they have to start telling new lies.

ATT makes the "low" end so low as to be useless, then adds a BIG jump to the next tier... so you are forced to get the 2nd tier. they say they have 2... but really they only have 1 that is useful.

if i had a 3g ipad, i'd be ****ING PISSED. but as it is, just another reason to dislike ATT. like we need more.

I don't use this often but ....
QFT

 

[JediZenMaster]

Ah, see here:



It comes from that. All the other devices, NOT the Droid, are capped. I wrongly assumed that since they capped the cards, USB modems, MyFi, etc. that the Droid too was capped.

I was thinking there still could be a high cap though. It probarly just isn't enforced unless someone is using a whole lot of data. Maybe 500 GB's or something

 

[JediZenMaster]

Undoubtedly when this all shakes out AT&T is going to start enforcing their 5 gig cap on "unlimited" data. So good luck with your abuse both to AT&T's network and to other people.

You think you are going to pay $30 a month for 65 gigs of data much longer, you must have taken a sleeping pill, because you are dreaming.

I Don't use that much data all the time my usage was that high one month out of years of service. My normal usage is about 6-15 GB's

And pretty much the Data plan is unlimited now if AT&T did alter my plan in anyway. I would be able to cancel my contract with no ETF. So in that case i would get an EVO 4G and head to sprint.

But i don't think it will come to that. AT&T wouldn't really want to let a whole bunch of customers leave ETF free.

 

[marksman]

Uhhh...because both of them willingly picked out a plan called 'unlimited' ?
DUDE..Hello? If you drive 100,000 miles a year and I drive only 10,000 can I get a cheaper car rate? or pay less per gallon? Most of the taxes on both of those is (supposed) to go for road use and maintenance...according to your dumba$$ statement...I get to pay less now !! Wheeeeee~!

Can you drive 25,000 miles for $500 of gas and I can only drive 500 miles? Weeeeeee....

I never get close to the 5gig current iPhone cap....but G%#Dam#%it this pisses me off badly...ATT has the suckiest customer service, rates, and reception...but it has the iPhone and iPad. This BS??? I have a family of 6 iPhone users (who do not use a lot of data) 3 of us are out contract....know what ATT? See YA! I don't like to be digitally raped and the new Android will fit the bill nicely. God forbid the iPhone comes out on Verizon. I was going to upgrade to an iPad 3g...nope...not now. Called ATT and you have to keep the $30 unlimited CONTINIOUSLY on to grandfather...skip one month of coverage and BAM! No choice EVER again...

Verizon's prices will be similar before you could even get moved over. Good luck with that fuzzy logic.

Know what? I think either ATT is LOSING exclusive right to the iPhone (jack up the rates and bump up the ETF before anyone finds out)....OR...Verizon played them (hints from Verizon CEO and maybe some "yeah..you're right" brownosing). Now Verizon is going to come out and say "Nah...we ain't going up" and then watch Sprint and T-Mobile not go up...THEN what?

Actually just the opposite. This points to the likelihood of AT&T having gotten an extended exclusivity agreement in the past 3-6 months. Between the iPad pricing and now offering a much more affordable base $15 plan, it is most likely AT&T has extended their exclusive deal with Apple for a while longer.

Nobody else will get an iPhone this year in the US, but at this point it would be surprising if it happened in the next 2 years. Apple undoubtedly wanted a lower entry price point for data from day 1. They finally got one. The iPad was a bit of a testing bed. I am sure Apple and AT&T had an agreement that if data use of the 3G iPad reached certain levels they could modify the pricing, given it is a brand new device doing things nobody else has done before.

Buh-Bye ATT...dropping everything I can to get away from you greedy rectal monkeys...

Yeah...I am really pissed about this BS....

With six users in your family, you undoubtedly would be saving money on the new plan, but far be it from you to actually understand what is going on before flipping out about it.

No...you, me, and everyone else (even the POSTERBOYS) paid for an UNLIMITED plan..He didn't buy a "LIMITED" plan then hack it. He isn't piggybacking his signal off a NASA satelite.

HE'S PAYING FOR AN UNLIMITED PLAN! Duh? What freaking part of this are YOU NOT GETTING?

What part are you not getting that I have been subsidizing him and other heavy users for years now. If anyone should be upset about anything it is me and others like me who have had to overpay every month for data.

The ones who should not be upset are the ones who essentially got a free ride and paid dirt cheap prices for data. Instead, though, those are the same people here crying and whining and cussing out AT&T. It is ludicrous.

I am caught in the middle on this one...

On one hand, I was considering a new iPhone this summer and handing my 3G over to my wife (would be her first one). She's no a huge data user and the extra $30/month for the unlimited data plan was a concern for us. So this is good for us...she good have my iPhone and only have to pay an extra $15/month vs. the $30 they previously required.

On the other hand, I would probably need the 2GB plan *at least* which means if I want a new iPhone I would need to switch to the new $25/month plan and hope my usage doesn't average higher than that. If it doesn't it than we're saving $20/month between the two phones.

This is where people get lost. We are so psychological beat down by corporations abusing us, that we are afraid to give up something that is unlimited. I get it.. but the reality is if you are saving $20 a month, you will likely be better off.

If this happens for 4 months, you save $80. If in the 5th month you need to use 4 gigs of data that would be $20 extra, which means you would be a wash, and thus you would still be $80 ahead for 5 months.

People are afraid of losing unlimited, but people have to realize the cost of using more data does not go from $25 for 2 gigs to $250 for 3 gigs, it goes from $25 for 2 gigs to $35 for 3 gigs. I just think for most people who are paranoid about giving up the unlimited (I am in the same point), it ultimately will make sense to do so, even if it means paying for a few overages down the road.

Look a little closer. That's if you go with the 2gb plan. The 200mb plan is $15 every 200mb over. Not as bad as data without a data plan, but, pretty damn steep. Of course if they can actually give you warnings at a decent time, let you change it without having them try to upsell you on some new feature and have it take effect instantly, I'm okay with that.

That is true if you let it lapse over. However you can retroactively upgrade to the $25 plan before the end of the billing cycle and pay $25 for 2 gigs. Actually a very nice feature. Only someone who was not paying any attention at all to their plan would end up getting billed like you suggest.

The 2gb plan isn't 'terrible', but, I'm not going to cheer them for edging up the average cost per megabyte and trying to tell me how awesome they are for saving me $5 a month. Now expand the current roll-over to everything instead of just minutes and I might be okay with this.

How does this edge up the average cost per megabyte?

If it does, as you suggest, it means the 2% were really using a massive amount of data for their measly $30 a month, putting a huge and unprofitable burden on AT&T's network, so it is good for the rest of us things changed!

Because this about forcing people to buy more bandwidth than they need at a higher $/mb.

I'll bet that 90% of their users use 250-400 mb. Therefore they won't go for the expensive 13mb/$ plan and opt for the 80mb/$ plan but still not use more than a couple of hundred mb.

The 2gb plan is just to get suckers to pay for more data than they need and at the same cut off the small percentage of folks that are hitting 3-6gb.

Since the only option before was to pay $30 a month, and now most people will pay less for the same exact amount of data or even more, your logic doesn't make sense.

 

[ibcj]

The thing that I find sad is that ATT is acknowleding that 98% of their customers use 2gb or less of data and they are still slammed for having a poor network. Just imagine if 50% of customers used 5gb of data each month.

I suppose that they really have little choice with the data consumption of the ipad now. The part that smells is the fact that both Apple and ATT touted the ipad rate plan and are now changing it so close to the release of the 3g ipad. Did they really think that maybe a dozen people would buy an ipad 3g and their network would be all set ?
Give me a break Att & Apple.

 

[azentropy]

People who use tethering will use more data.

More than what?? That is a silly statement with the tiered plans, which you need to be on if you want tethering. If they are paying for 2gb of data it shouldn't matter how they use it. Charging people for maybe actually using a higher percentage of the data they are paying for??? And charging extra for something that is already built into the phone??? Greed...

 

[cmaier]

Yes 98% of all AT&T iPhone customers now pay less per month for service. Where is the line to burn them down! In some cases people will be able to save hundreds of dollars a year... Lets hang 'em up!

First, the only source for the 98% figure is AT&T itself. Further, even if you accept their numbers, you are misinterpreting them. Just because in a given month 98% of people are under 2GB does NOT mean 98% of people never go over 2GB. A person can be under one month and over the next.

Further, we are about to get phones that appear in all likelihood to have video chat, and we are about to get tethering (for yet another ridiculous fee given that the data is capped) - both of which will increase usage for many people.

Additionally, the iPad 3G plan is a bait and switch. We were clearly promised the ability to, AT WILL, switch between the unlimited plan and no plan at all (or the reduced plan), whenever we wanted. Now, if you switch from the unlimited plan, you can never go back. The millions of people who bought iPad 3G's in the past month never had a single opportunity to perform the "switch at will" function that was promised to us.

Finally, they announced this a day after doubling their early termination fees. Give me a break. AT&T did all this to make more money, not to eliminate bandwidth hogs.

 

[dukebound85]

Interesting.....Does this mean with the iphone 4, as I am an existing customer, I can keep unlimited?

Current subscribers will be able to keep their $30-per-month unlimited plans, even if they renew their contracts.

from
http://www.msnbc.msn.com/id/37467137/ns/technology_and_science-wireless/?GT1=43001

 

[cgratti]

I used about 400MB so far this billing period, i'm about 5 days into it.. I'm staying unlimited...

 

[jcmeyer5]

The only thing that bothers me...

Nothing lasts forever, and products/services change. I get that. The rules were changed because a) some were abusing them, and b) to offer more choice ( option c is probably linked to the capital investment needed to get the network "right," but ignore that for now). The thing that bothers me is the tethering charge. Capped plan at 2GB. The assumption is that most people won't even get close to that (which means they are subsidizing those that do). However, I paid for 2GB of finite usage. Their model depends on me NOT using that, even though I pay for it. In order to compensate, they throw another fee on top of that for people who are more apt to use that much data - something they have already paid for... Which is where the logical argument for tethering up charge falls apart and becomes solely about the money.

So to recap, they want to charge us more for tethering because it offers us a chance to use the data we already pay for... And they can make more money on it because it is in high demand. While they are well within their rights to do it, any argument other than more money really falls apart. I really don't mind the data cap changes, but to charge more to customers (through a tethering fee) and give them essentially nothing in return... that sucks.

 

[marksman]

First, the only source for the 98% figure is AT&T itself. Further, even if you accept their numbers, you are misinterpreting them. Just because in a given month 98% of people are under 2GB does NOT mean 98% of people never go over 2GB. A person can be under one month and over the next.

So? I don't get the point? Are you claiming this means ~98% of the people will not end up paying less for their data plan with AT&T, because if you are you would be wrong.

And in reality I have seen scores and scores of people who post their stats and you are one of only a few who have any kind of borderline scenario. The reality is, though, wherever they put the cut off someone will be a victim of it, it is what it is. However most people are consistently no where close to 2 gigs at any point in time.

Further, we are about to get phones that appear in all likelihood to have video chat, and we are about to get tethering (for yet another ridiculous fee given that the data is capped) - both of which will increase usage for many people.

That is why there is a $20 fee for tethering because people who tether will use more data. I prefer the people who tether pay for their usage instead of having them charge evertying $5 more a month and spreading it around. If I want to tether I will pay for it.

Why don't you want to pay for what you use?

Additionally, the iPad 3G plan is a bait and switch. We were clearly promised the ability to, AT WILL, switch between the unlimited plan and no plan at all (or the reduced plan), whenever we wanted. Now, if you switch from the unlimited plan, you can never go back.

I don't disagree that it sucks.. however at the end of the day there was no contract guaranteeing any kind of service. So many people want to not have contracts for things, but contracts work both ways. It was a bad PR move for AT&T, I am not arguing that, but it is not like that agreement was never going to change. AT&T could have instead just raised the unlimited rate to $75 a month, and allowed you to opt in and out of it, and still added the 2 gig plan underneath it. Would that made you any more happy? Seems unlikely.

The millions of people who bought iPad 3G's in the past month never had a single opportunity to perform the "switch at will" function that was promised to us.

I don't know if you were promised a switch at will function. You were simply offered to be able to turn 3g service on and off from month to month. The fact that the introductory pricing was of a certain level doesn't mean that was the promise made. I don't think you can reasonably infer that. Like I asked earlier, do you think they should be required to keep the price the same forever?

You can still turn on and off 3G service as you like, when you like, if you like.

Finally, they announced this a day after doubling their early termination fees. Give me a break. AT&T did all this to make more money, not to eliminate bandwidth hogs.

Eliminating bandwidth hogs makes them money. That is pretty basic. They make more money because they bring in 30 customers at the $15 data rate and the put them in place of one customer at the $30 data rate. They use the same network resources and make 15x the revenue. It is a good move.

 

[sndcj1]

Wow, I guess I'm one of the few people who looked at this and thought this was a great new pricing structure. With occasional tethering on WM 6 phones (built in internet sharing), no one in our office went over 200mb last month. Highest usage was less than a gig over 2+ years of having these phones, and that was a user out of town for 8 business days, tethering to his phone for internet access. 'Course we only use the phones for email, maps, texting, phone calls, and tethering when we need internet access... standard business stuff. Since all new phones are "locked" from tethering by default, and we do not modify our work phones, we were looking at 30 for data, 30 for tethering for 6 phones, 30 data for a 7th, for a total of $390 in data charges a month (Small office, no big corporate deals here). Now we are looking at 45 for data+tethering on the six phones, and 15 for the last data (needs email and calendars, not much else), or 285 per month, or $1200 less than we thought we were looking at per year. Not a bad deal as far as I can tell. Now, potentially we could go over that, not sure what would drive that, but assuming we have a user do that every month, we're still looking good. Now looking down the road 2 years, the what-ifs might be a reality, but even if they are, we have 10 gigs of "fluff" built into this deal per month. Kinda looks like a win-win for small business users at least.

 

[firewood]

AT&T did all this to make more money, not to eliminate bandwidth hogs.

The two go together when profitability is based on statistical usage.

If the tail of the statistical distribution is fat enough (say a power law), then the cost of providing all the bandwidth could easily approach infinite, making it impossible for any business (or any government, for that matter) to provide network access without eliminating (or at least severely throttling) the worst of the hogs.

 

[firewood]

Something like this is how they should have done it from the beginning.

They couldn't have done it this way from the beginning because they had no good statistics on the percentage of high bandwidth users and how much more data they would use than the typical customer. And customers had no idea how much data they would actually use, and/or whether they would be go over the high bandwidth limit, which would discourage them from buying iPhones. Now they've got 10's of millions of customers who can look at their past bills, the vast majority (98% or so) are under the cap, and AT&T has enough stats, at least for the very near term.

 

[Chwisch87]

Well it's a carrot and stick.

The carrot is 50% off required data plans for users who don't download that much.

The stick is for the high bandwidth users in the form of 10 dollars for each additional gigabyte beyond 2 gigs. Which is essentially a dollar for each addition 100 megabytes.

atnt simply doesn't have the network going forward to handle high bandwidth iPhone users. Its the number one thing they complain about. In Atlanta where I live, the data is beyond ridiculous slow because everyone is constantly on their iPhones.

This could also signal the possibility of a mass migration to smart phones (as in making the iphone 99 dollars or possibly free with contract).

Of course my parents might love this because they are low usage users soo money saved. I am getting an android phone (on verizon) unless something amazing happens at WWDC.

 

[bergmef]

People who use tethering will use more data. So the only other option is to raise the price for data for EVERYONE. So everyone can pay $5-$10 more a month so you can tether for a lower price.

F the people who want me to subsidize their ability to tether. You want to tether you pay for it. If I want to tether I will pay for it.

This idea that they should lower tethering costs so everyone else can pay for it for those who use it is dumb.

If they use more data, then they pay for it, that's what a cap (2G) is. What's the 20 dollars for then? It's not for more data usage because you pay for that. Do the bits move faster? Maybe you get hyper speed when you tether? That's probably what the 20 dollars a month is for.

I'm glad my ISP allows me to have a router, otherwise I would have to pay to tether 2 computers, and ipod and a NAS.

 

[Schroedinger]

Several points:

- EVERY company is greedy. That is their job. Apple charges huge margins on their products and have billions in cash. They don't make netbooks or low end towers, despite what customers want, b/c they won't make enough of a margin on these products. The only reason they don't charge more is b/c they will lose more money to lost customers than they will gain in higher margins. If the day comes that they can raise their prices, they will raise their prices.

- I don't work for AT&T and I'm not being an apologist, but I've been around long enough to worry more about how things are rather than how they should be (on the scale of cell phone billing at least. Still hoping for world peace.)

- This all you can eat buffet keeps coming up so let's look at it a little closer and explain why one fat guy ruins it for everyone (looking at you jailbroken tethering powerusers):

The buffet restaurant has a set cost per average serving of food they are going to pay, lets call it $10. They are going to have a certain number of customers a day, let's call that 50. So, the total food consumed in the day is 50 servings at a cost of $500.

Let's say they want to make a 50% profit. They charge each customer $15, bring in $750 a day and make of profit of $250. Everyone is around the average so it is fair to everyone.

Suppose though that on that first day you have a couple of guys that eat WAY more than everybody else. Considering I use 200 MB of data month and some others here use 10GB, I'll be conservative and say each of these two guys eats 26 servings each.

What does this do to the math for the buffet?

Well, bring in $15 a head for 50 + 2 customers, for a total revenue of $780.

Their cost however has now gone up. 48 people used 48 servings, and 2 people used 52 servings, for a total of 100 servings. The cost for all this food is $1000.

The restaurant lost $220 bucks today. No problem, they can raise prices. To make THE SAME $250 they were making before (now only a 25% profit), the revenue requirement is up to $1250 dollars, so each of the 52 customers is now going to pay about $24 a person. More realistically, the company will want to keep its 50% margin so we are all on the hook for about $29.

The average customer ends up paying twice as much, and three times the cost of their food. People look at this and say hey you are charging me three times cost and call the company greedy. They aren't taking into account the glutton who is driving up the costs for everybody.

So, this is how those of us who use little data are paying for those who use a lot. Does it "cost" AT&T $30 a month to provide me with cellular data? Hell no. But it also "costs" them WAY more than $30 a month to provide 9 GB so somebody can run a bittorrent client using their iphone.

So, AT&T has given access to special sections of the buffet, where I get to pay the original $15 and get my one serving of food. Heavy eaters can go to the $25 table and people who are taking away dumptrucks of food would be out of luck if your grandfather didn't know the owner and hadn't convinced the owner to let you keep coming even though you only pay $30.

Actually, now that I think of it, this IS all AT&T's fault. They shouldn't have used the word "unlimited" in the first place. It made some of their customers forget about basic economics.

 

[bergmef]

Personally, I don't care about the costs of the data plans. I would pick the one that suits me and live with it.

I don't like the tether charge. They are only doing it because you won't be buying an air card to tether with. I think if you sign up for 2G of data, you get 2G of data ... however you want to use it.

If I was Apple, all tethering apps would be allowed starting today. Including their own.

I use a verizon air card, work pays for it. If my phone could do it and and I have to pay extra with no extra data ... I'd pass (I think verizon charges the same way as ATT).

 

[marksman]

If they use more data, then they pay for it, that's what a cap (2G) is. What's the 20 dollars for then? It's not for more data usage because you pay for that. Do the bits move faster? Maybe you get hyper speed when you tether? That's probably what the 20 dollars a month is for.

I'm glad my ISP allows me to have a router, otherwise I would have to pay to tether 2 computers, and ipod and a NAS.

the $20 for the tethering is because a person tethering uses more of their 2 gig cap than someone is not tethering.

AT&T doesn't base their pricing on every person using 2 gigs every month. If they did that, then everyone would pay $80 a month for 2 gigs or something crazy.

They base their pricing on the average usage on the network. So they know with the $25 2 gig package, the average user is using say 500 mb a month. Now the same person using tethering, say, uses 1.6 gigs a month. Those people tethering bring up the average significantly, thus requiring AT&T to either charge everyone more to make the same amount of money, or to charge the people who will actually be using more data to pay the money.

I vote for the people who want to use the more data to pay for it. In this case that means those people who choose the tethering package. So actually it is for more data, because you are using more data.

Traditionally they might have just put it as a one stop all fee and spread it out, but AT&T, rightfully, has realized that the subsidy model of the extreme users makes it much harder for them to bring in customers on the low end. So the answer is to make the people who use the most data pay the most.

Seems fair to me.

Back to my numbers... Let us say you have 10 customers each using 500 megs a month. That gives you an average of 500 megs per customer.

Now let us say 2 customers start tethering. They each use on average 1.6 gigs a month. The new average for those same 10 customers is now 720 megs a month.

So with those two customers using tethering the average data usage per customer went up almost 50%.

AT&T has a few options here:

1) We don't like to make money and we don't care that our stockholders demand we make money. We like to give people free tethering. They can do this and make less money, lose money whatever.

2) They can increase the charge for everyone for using data by say 50% so everyone pays $37.50 a month for 2 gigs of data but gets free tethering. Although that seems a bad idea because it ends up overcharging most of your customers and making your service less affordable to most customers.

3) You can charge $20 for those who wish to tether so it helps cover the cost of the bandwidth they are using when tethering.

From a business and customer service standpoint, number 3 is clearly the most appealing option. It allows you to make the most money, while also impacting the fewest number of customers in a negative way.