AT&T CEO Acknowledges Rumors of Cellular FaceTime Charges, Says 'Too Early' to Discuss

[jmgregory1]

This whole US cellular market of data usage is a bunch of bunk. 1Gb, 3GB or unlimited, it's all irrelevant. The quantity of data a person uses has no affect on the network of AT&T, Verizon, et al. What matters and affects the network and it's users is the number of people on the network at a given time, in a given area and how many it can support. That's where the slow downs occur and congestion takes over. This is true whether a person uses 1MB or 10GB; it's all the same.

Imagine a highway with 2 lanes and 100 cars on it driving 55mph. Traffic should run fairly well. Now triple the amount of cars on the same road and traffic is going to get congested and the speed overall is going to drop significantly. If you widen the same road by 1 or 2 lanes, those 300 cars should be able to drive 55mph again and be fine. This is the same principle of the way the networks work.

The bottom line is the cellular companies are taking us for a ride and not a high speed one. They're cashing in on these "data plans" and restricting us the use of the road. We're only allowed to drive 3 miles on the unlimited length of the road each month. That is without regard to how many lanes are available and the amount of cars on the road. You could be the only car on a 3 lane road, but you're only allowed to drive 3 miles per month, or they're going to penalize you for driving further.

Then there is the text messages. Texting costs them next to nothing to accommodate as they insert that data in between regular telephone calls on the same network. Again, charging us all this money for these plans is uncalled for.

They are bringing in the cash hand over fist, yet their networks lag behind in capacity and speed. What are they doing with all this money? Perhaps they need to streamline their corporate & company structure and become more cost-effective.

This is exactly correct. What we as consumers should be lobbying for is to get what we pay for - a certain amount of data at a certain speed of service. That way there would be expectations on the part of the service provider and if they don't live up to their claimed speed, we would have recourse against them.

Otherwise, the way it is now, we pay for say 3gb of data per month, but if the service is so congested that we can't access the data in the first place, we shouldn't have to pay for it. ATT with their "fastest network" claim, should be made to support that claim - at all times and places. Otherwise it's false advertising and probably could be considered mail fraud or something similar.

 

[Butler Trumpet]

This gets to the very essence of the fight over net neutrality and traffic discrimination. If they go through with this, what's to stop them from charging more for YouTube videos, twitter messages, Facebook posts, etc?

Exactly. Net Neutrality is the biggest concern here. Without Net Neutrality they could charge for specific sites, and throttle down speeds to competing sites ... this could be the start of a very terrible thing.

 

[jhende7]

Don't turn this around. Voice/Texting revenue has been on the decline and unless they adapt as a company to find new ways of profit then the business entity will fail. If home internet providers were threatened by a new product that somehow cut their revenue they would be sure to initiate new forms of cash flows.

I'm sorry your "business assessment" of the situation seems terrible.

By your logic my electrical utility company should start assessing an extra fee when I use electricity for playing Xbox vs turning on a light (regardless of the actual kw usage of course). Maybe the utility companies should also charge me extra for using my water to shower instead of taking a bath? Maybe gas companies should start charging more per gallon of gas if your driving a Toyota corolla vs a truck?? I mean those darn corollas are so fuel efficient were losing an important revenue stream and we need to be sure to initiate new cash flows! I mean this kind of discrimination surely won't lead to lost customers, complaints, lawsuits etc.

You have given me some great ideas. I'm off to one of the banks to pitch a great new idea. I think they should be charging an extra fee when people use there own money to buy an Apple product vs a PC... I mean people that are buying Macs surely could afford it right?

 

[Macboy Pro]

If not for AT&Ts willingness to take on the unproven iPhone from day one, the iToyz experience would not exist today.

Steve Jobs took his new project to Verizon first and they told him to pound salt.

Those were the only two carriers with the proper resouces to support the phone. Had AT&T been as stubborn & closed minded as Verizon who knows what the impact would have been.

EXACTLY!! And AT&T did a bang up job keeping up with the iPhone explosion. Sure, some areas were slower than others, but they did it and they still have the largest 4G (iPhone) network and by far the fastest.

No one predicted the iPhone would take off like it did (only 4-5 years ago).

When unlimited plans were offered, AT&T had no idea that it would take off like it did and that bandwidth requirements would be so big and data speed would be so fast.

If you read this forum, people crucify Randall Stephenson for admitting that AT&T made a mistake for even offering unlimited. Good Grief, he is being HONEST. It was a mistake. His responsibility is to the stakeholders at AT&T and customers as a whole, not to the whining freeloaders who want to break rules, jailbreak phones, tether the data, and chew up AT&T bandwidth that the rest of us use.

----------

I'm sorry your "business assessment" of the situation seems terrible.

By your logic my electrical utility company should start assessing an extra fee when I use electricity for playing Xbox vs turning on a light (regardless of the actual kw usage of course). Maybe the utility companies should also charge me extra for using my water to shower instead of taking a bath? Maybe gas companies should start charging more per gallon of gas if your driving a Toyota corolla vs a truck?? I mean those darn corollas are so fuel efficient were losing an important revenue stream and we need to be sure to initiate new cash flows! I mean this kind of discrimination surely won't lead to lost customers, complaints, lawsuits etc.

You have given me some great ideas. I'm off to one of the banks to pitch a great new idea. I think they should be charging an extra fee when people use there own money to buy an Apple product vs a PC... I mean people that are buying Macs surely could afford it right?

You logic works if the telecoms were charging you by the MB. Maybe they should charge by the MB and then you can choose what you spend your money on. Flat rate plans are not the same thing so your analogy is innaccurate.

 

[paulyras]

Exactly. Net Neutrality is the biggest concern here. Without Net Neutrality they could charge for specific sites, and throttle down speeds to competing sites ... this could be the start of a very terrible thing.

What really gets me is Apple and ATT are 'partners' on the iphone. True, facetime and imessage do potentially limit revenue, but so do Skype.

It mystifies me that if they're picking winners and losers in the marketplace (which is one concern over the net neutrality exception for cellular carriers, since they are likely to all pick different 'preferred partners'-- typically themselves wherever possible) they would choose a strategy that dilutes the iPhone brand and financially benefits MS (owner of skype).

I'm not going to even bother getting into the negative effects of fragmenting the market with various non-interoperable technologies.

The best thing Apple could do right now is reinstate their launch claim for facetime that they plan to make it an open standard. Allow skype and others to make their clients compatible. That should force the carriers hands, as I'm pretty sure that if you single out one company and force extra charges (rather than a broad type of service) the FCC / FTC will take notice.

 

[kdarling]

This is exactly correct. What we as consumers should be lobbying for is to get what we pay for - a certain amount of data at a certain speed of service.

That's like saying we should be guaranteed a certain speed on the highway.

There is no such thing as infinite bandwidth, so restricting simultaneous users is the ONLY way to guarantee a certain speed (unless they set that speed so low as to be meaningless).

Is that really what people want? A limit on who gets to have wireless access? Perhaps a lottery as to who can own a smartphone? Perhaps a tiered speed rate, with a limited number of high priced slots?

There is no easy and fair answer when it comes to limited wireless broadband, except to make sure that everyone is allowed to share it (either equally or by speed tier). In other words, yes, people should be allowed to use whatever app they want, with the caveat that if a cell is crowded, that app might not work too well.

 

[tigres]

This whole US cellular market of data usage is a bunch of bunk. 1Gb, 3GB or unlimited, it's all irrelevant. The quantity of data a person uses has no affect on the network of AT&T, Verizon, et al. What matters and affects the network and it's users is the number of people on the network at a given time, in a given area and how many it can support. That's where the slow downs occur and congestion takes over. This is true whether a person uses 1MB or 10GB; it's all the same.

Imagine a highway with 2 lanes and 100 cars on it driving 55mph. Traffic should run fairly well. Now triple the amount of cars on the same road and traffic is going to get congested and the speed overall is going to drop significantly. If you widen the same road by 1 or 2 lanes, those 300 cars should be able to drive 55mph again and be fine. This is the same principle of the way the networks work.

The bottom line is the cellular companies are taking us for a ride and not a high speed one. They're cashing in on these "data plans" and restricting us the use of the road. We're only allowed to drive 3 miles on the unlimited length of the road each month. That is without regard to how many lanes are available and the amount of cars on the road. You could be the only car on a 3 lane road, but you're only allowed to drive 3 miles per month, or they're going to penalize you for driving further.

Then there is the text messages. Texting costs them next to nothing to accommodate as they insert that data in between regular telephone calls on the same network. Again, charging us all this money for these plans is uncalled for.

They are bringing in the cash hand over fist, yet their networks lag behind in capacity and speed. What are they doing with all this money? Perhaps they need to streamline their corporate & company structure and become more cost-effective.

Bingo-
nice synopsis Sandbox

 

[Geckotek]

Or perhaps they could spend some of that $3.6 billion on expanding capacity instead.....just a thought.

 

[landrew4]

Just a way to kill off "unlimited" plans

My prediction is this: It will be a "no charge" feature that has to be added to your plan, but can only be added to "currently offered" plans. In other words, anyone who has the old "unlimited plan" will be out of luck using this feature unless they give up that plan. This is very similar to what they did with Tethering - although it is an extra charge, it could not be added to the unlimited plan so users had a choice to give up that plan or give up new features. I do understand that tether'd users and FaceTime users on a "unlimited" plan could do the most damage, so I can see AT&T's interest. They have basically been doing everything they can to get people to "willingly" give up their unlimited plans without AT&T getting bad press about canceling those plans.

 

[kdarling]

Or perhaps they could spend some of that $3.6 billion on expanding capacity instead.....just a thought.

To be fair, the total revenue for that quarter was $31 billion, so they spent about $28 billion on running and expanding the network.

The profit was shared with investors.

Contrast this to Apple, who simply banks their much higher profit margin instead of putting it back into R&D or paying out dividends.

As for the profit amount itself, $3.6 billion divided by 100 million users equals only $3 per week per user profit.

 

[S.B.G]

This is exactly correct. What we as consumers should be lobbying for is to get what we pay for - a certain amount of data at a certain speed of service. That way there would be expectations on the part of the service provider and if they don't live up to their claimed speed, we would have recourse against them.

Otherwise, the way it is now, we pay for say 3gb of data per month, but if the service is so congested that we can't access the data in the first place, we shouldn't have to pay for it. ATT with their "fastest network" claim, should be made to support that claim - at all times and places. Otherwise it's false advertising and probably could be considered mail fraud or something similar.

Bingo-
nice synopsis Sandbox

We've identified how the cellular data structure functions, it's flaws and how it can be corrected. The tough part is convincing them or a higher authority to change it. Regrettably, I doubt there will ever be a change. I say that because after the big four [cellular] companies were called up on the carpet before Congress in 2008 about how they charge for texting, nothing changed.

 

[Sixtafoua]

This is a new low for AT&T. They way they blame it on technological issues is really funny. Verizon and sprint aren't working with apple to get the "technology stabilized".

 

[Shade12]

Well it doesn't matter to me because my data is blocked only use wifi. : D with AT&T save money guys

 

[Major.Robto]

Wow you people are freaking out.

First off, if they only are charging for facetime, then use skype! does not take a brain surgin to figure that out.

Also if you don't like at&t why are you still with them?

Man, people think!

 

[jhende7]

You logic works if the telecoms were charging you by the MB. Maybe they should charge by the MB and then you can choose what you spend your money on. Flat rate plans are not the same thing so your analogy is innaccurate.

I beg to differ. It's not really a flat rate. If it cost say 30 bucks for 1 GB of data, that equates to 30 bucks for 1024 MB or 3 cents per MB. Then, they usually adjust that to a higher rate once you go over your 1GB limit. Essentially your just getting a "tiered" per MB charge. A flat rate implies you pay one price and get full use of a product or service.

So in essence, the integrity of my first example remains fully in tact.

 

[KdParker]

I don't think this will pass.

It's probably a publicity stunt to seem like the good guys by not charging for FaceTime 3G after hearing the "opinions" of it's customers, when in truth they probably weren't even going to charge for it.

You still suck, AT&T.

Still looks like I am moving to verizon. (unless thier 4g sucks).

 

[tbrinkma]

They are bringing in the cash hand over fist, yet their networks lag behind in capacity and speed. What are they doing with all this money? Perhaps they need to streamline their corporate & company structure and become more cost-effective.

What are they doing with all that money? Building out infrastructure as quickly as they can get the permits to do so. Seriously. It takes them a month or so for the actual construction/build-out of a new tower. The entire *process* of getting the 'ok' to build the tower in the first place can take upwards of 6 *years* due to EPA studies, zoning permits, locals suing to block construction because they don't want that 'eye sore', etc.

----------

I beg to differ. It's not really a flat rate. If it cost say 30 bucks for 1 GB of data, that equates to 30 bucks for 1024 MB or 3 cents per MB. Then, they usually adjust that to a higher rate once you go over your 1GB limit. Essentially your just getting a "tiered" per MB charge. A flat rate implies you pay one price and get full use of a product or service.

So in essence, the integrity of my first example remains fully in tact.

You do pay once and get full use of the product or service. The product or service you paid for (in your example) is 1GB of data.

I remember back when cell phones were brand-spanking-new. In some of the original plans, if you went over your minutes, your phone stopped working until the next billing period began. *That* went over like a lead brick, so they moved to the overage-charge method.

 

[Trauma1]

Data is data, plan and simple...

That having been said, I actually like this. Too many people are walking around town and driving on the streets doing things they shouldn't be doing: texting, using the internet, checking email, etc. What's going to happen when you add FaceTime?

For the most part, FaceTime on Wi-Fi assumes that someone is in a stationary, stable environment. Now if you let go of that restriction, people are going to be even more distracted in even more places. It's the loss of attention that talking on a phone causes, mixed with the loss of vision by staring at the phone (instead of looking forward) that happens with texting.

I don't care if they charge a little or lot for this because I won't be paying it. There are plenty of simple alternatives; Skype, jailbreaking, tethering, in-car Wi-Fi systems, etc. We're smart enough to figure those out. If someone can't figure out these simple work-arounds, then let AT&T make money off them now so they don't have to raise our rates in the future.

 

[Kavok]

Wow!

[url=http://cdn.macrumors.com/im/macrumorsthreadlogodarkd.png]Image[/url]
In a separate report today from The Wall Street Journal, Sprint indicated that it will not be charging additional fees for cellular FaceTime usage, considering it part of the customer's existing data package. [/url]

SPRINT gets it! Data is data and you shouldn't be charged extra based on how you use your data (you already paid for it once). Verizon and AT&T need to learn this.

 

[BFizzzle]

what a scum bag, the FTC and BBB will be flooded with complaints if they go through with this. Sprint here i come. Thank god they are adding sprint LTE in my city this fall

 

[S.B.G]

What are they doing with all that money? Building out infrastructure as quickly as they can get the permits to do so. Seriously. It takes them a month or so for the actual construction/build-out of a new tower. The entire *process* of getting the 'ok' to build the tower in the first place can take upwards of 6 *years* due to EPA studies, zoning permits, locals suing to block construction because they don't want that 'eye sore', etc.

I fully understand that as I am in the middle of building out an 8-site public safety radio system and have to go through the exact same *process* the cellular companies do. I had one tower held up for 2 months on local public hearings and then another 5 months due to EPA studies and we finally were allowed to break ground last week on the site.

I still must believe that the companies can upgrade their equipment in the shelters of existing sites and greatly improve their capacity, speed and quality of service. Building new sites can only enhance those other efforts.

There are things they can do today to improve things, but it's a matter of will. Will they invest the necessary funds to enhance existing infrastructure or not?

 

[dotme]

Data is data, but downstream data isn't upstream data. I don't use Facetime, but I can see how a sudden flood of outbound video streaming using a lot of upload bandwidth might give any ISP/provider a little cause for concern. Most build their networks around the assumption that the user will consume most bandwidth by downloading, so their downstream available pipe is much greater than the upstream.

I don't know what impact a couple of hundred concurrent outbound Facetime streams would have on a tower, but I can see why they might be a little concerned about it.

 

[jhende7]

You do pay once and get full use of the product or service. The product or service you paid for (in your example) is 1GB of data.

Are you trying to make my point for me? Yes, if you pay for 1GB of data you should in fact get to freely use that 1GB of data as you please. When you get 1GB you are essentially locking into a fixed per MB rate up to 1GB.

If you pay for 1GB, but they exclude you from using it, or charging you extra for using it a certain way, then the example I used in my first post fits perfectly. Flat rate, fixed rate, variable rate, it doesn't matter.

 

[chainprayer]

Streaming 3 straight hours of How I Met Your Mother: go ahead!

5 minute FaceTime call to my wife: This is a strain on our network, so we're going to charge you.

 

[Geckotek]

To be fair, the total revenue for that quarter was $31 billion, so they spent about $28 billion on running and expanding the network.

The profit was shared with investors.

Contrast this to Apple, who simply banks their much higher profit margin instead of putting it back into R&D or paying out dividends.

As for the profit amount itself, $3.6 billion divided by 100 million users equals only $3 per week per user profit.

To be completely fair, we'd have to look at their budget to see how much actually went into improving/running the network and how much went into advertising, CEO's salary, and other useless junk.