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Why AT&T Should Dump the iPhone's Unlimited Data Plan
Pickens writes
"Farhad Manjoo has a provocative story at Slate asserting that while the iPhone has prompted millions of people to join AT&T, it has also hurt the company's image because all of those customers use their phones too much, and AT&T's network is getting crushed by the demand. The typical smartphone customer consumes about 40 to 80 megabytes of wireless capacity a month, while the typical iPhone customer uses 400 MB a month. As more people sign up, local cell towers get more congested, and your own phone performs worse. He says the problem is that a customer who uses 1 MB a month pays the same amount as someone who uses 1,000 MB, and the solution is tiered pricing. 'Of course, users would cry bloody murder at first,' writes Manjoo. 'I'd call on AT&T to create automatic tiers — everyone would start out on the $10/100 MB plan each month, and your price would go up automatically as your usage passes each 100 MB tier.' He says the key to implementing the policy is transparency, and that the iPhone should have an indicator like the battery bar that changes color as you pass each monthly tier. 'Some iPhone fans will argue that metered pricing would kill the magic of Apple's phone — that sense of liberation one feels at being able to access the Internet from anywhere, at any time. The trouble is, for many of us, AT&T's overcrowded network has already killed that sense, and now our usual dealings with Apple's phone are tinged with annoyance.'"
Build more towers. Increase capacity. Uncle Sam has doled out a lot of money over the last couple decades to build infrastructure. Build it. Cut dividend payouts a little bit, and build the infrastructure up. Maybe cut executive and management pay a little bit. DUHH. And, while you're at it, maybe you can get that "last mile" built so that all Americans can get online. Tiered pricing isn't the solution. Demand is going to increase every year from now on. Get used to the idea that you need to keep adding to and improving the infrastructure. You can't take a snapshot at some arbitrary point, and say "We need this much more infrastructure, then we'll be on easy street." Invest your earnings back into the system, where it belongs - in the business.
"Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
AT&T also scored lower than any other U.S. carrier in a recent customer-satisfaction survey—the first time it has ever claimed last place.
That's not the iPhone users fault: that's AT&T fault.
What's this horseshit of blaming the customer for shitting customer service, or service for that matter?!
They sold a service and an amount of bandwidth and now that they can't deliver, they're blaming the customer.
It's NOT me! It's the meds! I'm on 1000mg of Fukitol.
ATT offered users an unlimited data plan, no wait, they required one with an iPhone. Now the problems with ATT's network are the fault of those selfish users who took ATT's offer seriously. Give me a break. ATT is rolling in money from iPhone, they should use it to build out their network.
As a great man [allegedly] once said, 640kb should be enough for anyone.
Modern users with their demands for eight, sixteen and thirty two megabyte options are just needlessly draining the world's silicon supply so they can listen to a few songs. Traditional phone users who don't have all of those cutesy multimedia options can get by with a fraction of that.
Alternatively, time moves on. Just because 640kb was once enough for anyone, doing what they did with the limitations of that era, just because 40-80mb/month was once enough for anyone... That doesn't mean time doesn't move on and it doesn't mean it's appropriate to only support what once was the norm.
AT&T have made a metric assload of money from people who bought the iPhone for, well, being an iPhone and not "some other" smartphone. AT&T's network sucks, just about everyone seems to gripe about it. They suck it up, when they'd never have gone with AT&T in the first place, because it does come with a more able phone, because it does come with unlimited data access, because it does come with an interface that makes using 5-10x as much bandwidth as before a practical reality.
To play bait and switch, to get users to buy $600 phones (yes, I'll claim full price in a world where you either pay inflated monthly rates or a fee to cancel), to get them to sign up for those contracts, to get them to leave companies with more reliable service, all with the promise of an unlimited phone and then to say... yeah, we don't feel like paying to support that so, instead, surprise! we're capping the unlimited service we sold you and charging overage fees is obscene.
If AT&T can't really roll out coverage to support iPhone users using an iPhone as an iPhone... perhaps the real answer is for Apple to say, "OK, you can't meet your end of the agreement - we'll sell it to Sprint/Verizon/whoever instead."
AT&T entered in to an agreement with Apple to provide a network that supported Apple's product. AT&T entered into an agreement with the customers to provide a network to support that product in a certain way, too. If they'd like to acknowledge they can't honor that, I'm sure another company would like the opportunity.
While the logic is sound, his basic premise is quite flawed. His article is based upon the idea that these "iPhone Users" are something so different and special from other phone users, that the world has never seen anything like them before (sounds like a bit of Apple propaganda to me). However, that is patently wrong. Just look at Japan. A very large percentage of the Japanese population uses their cell phones in ways that would put iPhone users to shame. That is not even mentioning that Japanese cities have much higher population densities than American cities, and you don't hear stories of how the Japanese phone network is falling apart. Between these two points, his conclusion that we will never be able to build enough network capacity to support iPhone users is clearly false.
The writer builds his entire argument on the idea that, like highways, building network capacity produces a phenomenon called "induced traffic". The more roads you build, the traffic they attract, producing an unending(but not really) cycle of expansion and congestion.
Setting aside the obvious dissimilarities between network traffic and highway traffic, what he fails to mention is that there's an upper limit to induced because, as usual, there are a finite number of people and cars. If it really was the case that highways inevitably congested no matter how many you build, all of our highways - not just the ones outside of major metro areas during rush hour - would be chronically congested, at all times. But they aren't. This is because there is an upper limit on how much people drive no matter how many highways are available for them to use, and there is an upper limit on how many people drive to begin with.
Similarly, the Internet would have grinded to a halt long ago if building out capacity wasn't at least a partial solution, if not a complete solution, to the problem. Most broadband users have unlimited access as well, and while some tax the network disproportionately, the Internet's infrastructure is able to support it.
Why the author thinks the same principle doesn't apply to iPhones is beyond me. Yes, people will do more data-intensive things on a faster network. But there's an upper limit to how much data can be transferred by a single iPhone user in one month anyway, even if the user is transferring data 24/7, 7 days a week. if the network is built to handle the upper-limit of the most data-intensive users even in a hypothetical "induced traffic" scenario, this won't be a problem.
The whole traffic analogy belongs in the "The Ted Stevens Dumptruck of Bad Analogies," and Slate should stop publishing articles about shit it doesn't know about.
source: http://www.companypay.com/executive/compensation/at-t-inc.asp?yr=2008
Total compensation of the five active execs listed for 2007 $59,359,833.00
Source: http://www.celltowerinfo.com/faq-4.htm
cost to build a tower $100,000 - $300,000
so I'll take 200k as an average
source: http://www.google.com/search?hl=en&source=hp&q=59359833%2F200000&aq=f&oq=&aqi=
number of towers that builds if they take NO PAY AT ALL- 296.799
source: http://en.wikipedia.org/wiki/United_states_of_america
surface area of the US 3,794,066 sq mi
source: http://en.wikipedia.org/wiki/Cell_site
range of a cell tower gsm 25miles otherwise 30-45 miles..
lets say 40 miles-- be generous
source http://www.onlineconversion.com/shape_area_circle.htm
area of a circle using 45 as the radius= 6361 miles
http://www.google.com/search?hl=en&q=6361%2F3794066&aq=f&oq=&aqi= .00167656546
6361 into the size of the USA
you've taken away 100% of their compensation, and added 1/10 of one percent of the towers needed to blanket the nation
every day http://en.wikipedia.org/wiki/Special:Random
iPhone is just the most visible because
It's the most visible because it's the only one that gets advertised by the media. I mean seriously - I used to joke about daily Iphone stories, but today we have, what, at least three on the front page? Where's the coverage for the big names like Nokia? Of course it's the most visible - but sales figures show a different story. And a good thing too, as I for one don't want the future of mobile computing to be a monopoly like we ended up with Microsoft, but worse one that's locked down to the extent that you can't even release an application without Apple approval.
Personally I'd much rather to see a future that continues with multiple companies (of which Apple can be one), with choice, and most importantly, compatible standards so that I can release an application that Just Works on all phones, without needing me to recompile it especially for each make, or getting corporate approval from the companies. I don't see why this is so controversial - and why Slashdot of all places is supporting the Iphone all the way.
Once upon a time, this was a place to support open and alternative solutions, not to give coverage and free advertising solely to large companies with locked down products!
Note that all phones can run so called "apps". Running applications on phones has been common on all but the most basic phones for at least 5 years, and note that the market of Java smartphones is estimated at two billion.
I'm not a hater. That's just another deceitful trick put out: that if someone uses another phone, disagrees that the Iphone is the best phone ever - or disputes claims that the Iphone is the best selling phone out there - they must be doing so out of an irrational hatred (e.g., the story about Japan hating Iphones).
By all means let's have a sensible debate about which phone is the best, or argue about how many phones are sold by which company. But please, let's have a fair debate, with evidence - rather than resorting to the usual tactic of branding people "haters", or modding people down out of sight simply because you disagree with them, and can't respond to their criticisms.
You're ignoring population density- the vast vast majority of iphone users are urban. Blanket those 300ish towers in the op 20 metropolitan areas and your problem is 99% solved.
I still have more fans than freaks. WTF is wrong with you people?
Your math is totally off.
3,794,066 sq mi / (6361 sq mi / tower) = 596 towers
596 towers * 200,000 $/tower = $119,200,000
So the top five would have to go without pay for two years in order to theoretically blanket the US. Of course, since the coverage of a tower is roughly circular, and circles don't tesselate, you'd actually need a lot more than 600 towers. However, for the pay of the top five execs, you could build about 300 towers.
As a Brit now living in the USA, it continually amazes me how Americans 'understand' or even even agree with corporations consistently crappy service (20 minutes on hold anyone?) even when they aren't getting what they clearly paid for up front.
Yet more costs to customers? No! The blame lies with AT&T. The proper solution is for AT&T to spend some of their massive profits gained from iPhone sales and contracts on better infrastructure and provide what they already promised as a part of the contract.
3. Feds establish rate limits for services. Data access would not be unlimited, but rates should be limited to $.05 per megabyte. Voice access rates should be capped to $15 per 1000 minutes per line.
Data is not a commodity, data is a service
When I go and buy a jar of salsa, the manufacturer had to pay a specific amount of $ to manufacture that specific jar. If I do not buy it, he can keep it around and sell that jar to someone else tomorrow.
When I want to park in a parking space for an hour, however, the city does not have to pay someone $ to create an hour in which I could park. If I do not park there, then the city cannot keep around the hour I was going to buy and sell it to someone else.
In fact, if the city had magical parking meters that would safetly and immediately eject the car of any non-paying person immediately as soon as someone with a quarter wanted to park, the city could just let non-payers park there as much as they wanted, with the understanding their car might not be at the same location when they got back.
The city would be foolish not to do this, as the parking meter is just there to make sure that someone going to the store on that street (say, to buy a jar of salsa) can find someplace to park. While magical parking meters don't exist, this IS how bandwidth works on the internet.
Unless your ISP is a drooling moron, they are NOT paying per-kb, per-mb, or any real per-use fee at all. They signed an agreement with backbone providers to get a certain amount of bandwidth for a certain amount of time, and they don't pay any more for bandwidth on an hour when NO ONE uses their network than they do for the busiest hour of their year.
If AT&T really wants to keep bandwidth responsive, they want to decrease the effect that heavy users have on their network. The cheap way is to just lie and charge those heavy users more -- but that's not the right way. The right way would be to set a self-tiering structure, where so much network activity over so long just puts a heavy user's requests at a lower priority than the lighter user who pays the same amount.
Letting heavy users voluntarily pay more to get faster service would be a great revenue model, too. Especially since it wouldn't be in danger of the FCC declaring it unlawful.
Yes, seize it all and regulate it even more. This will be the key to our salvation.
/sarcasm
On the real though, they should get rid of the assignation of wireless spectrum and allow a truly free market for wireless voice and data service to grow. It's not that hard to make sure one's service doesn't interfere with the next. Rather than giving out monopolies over spectrum let the courts handle disputes where one company is directly interfering with another's.
I find it amazing that, in a system without data usage limits, 400MB is considered heavy. I work in an Optus shop in Australia, and we sell several different iPhone contracts, the highest of which comes with 2GB of data, and you can pin on another 1GB as an extra cost; I have seen people come into the shop to pay bills where they have exceeded the 3GB, month after month. I know this is just anecdotal, but it would suggest that usage limits encourage people to use all of what they pay for, and then some. Imposing limits on a previously limitless system, apart from angering customers, may actually increase traffic.
Admit it. You post strawman arguments as AC so you get modded Insightful for refuting them, rather than Troll
"Yes, seize it all and regulate it even more. This will be the key to our salvation. " - go ahead and tell me how well "the free market" is working to fix this problem.
There are 2 key factors being ignored here. The average user may well be using only 400 megabytes but the "average" user hasn't had his/her iPhone for very long and quite probably hasn't discovered all the possibilities yet. Someday, he/she will. He'll start syncing his files via Dropbox, or he'll set up a Pandora station and start listening to streaming audio over long car trips. He'll pick up new podcasts, and update them over the air. The longer you have your phone, the more bandwidth you'll use as you slowly learn to do more and more things with it, get more and more apps, and so forth.
A large percentage of the so-called "heavy users" are merely early adopters, who've embraced smart phone computing to a higher degree. They aren't the norm now, but increasingly they will become it.
Moreover, the average user lives where, exactly? Some cities have ubiquitous WiFi, others, as of yet, do not. Some cities are dense and have many access points, others are spread out and suburban.
At the end of the day, tiered pricing would be a disaster. People would find their bill increasing 10 dollars every month and realistically, how long would they put up with that? I love my iPhone but I am absolutely not paying 200 dollars for data every month just because I go through about 2 gigs of data in that time frame -- nor, frankly, am I willing to cut back. I'll simply switch to another phone on another network that isn't heavily oversold and underserved.