You know how you pay a fixed monthly fee for your phone, and can check email and Twitter, surf the web and the Yelp app anytime you like without counting minutes or megabytes? Yeah, well that’s all gonna end.
Yesterday, Verizon CTO Tony Melone said that the days of all-you-can-eat data plans are ending, echoing something AT&T’s boss said a week ago, that metered (or variable) pricing was ahead.
The bigwigs talk of fairness – why should the weekly email checker pay the same as the out-and-about Pandora junkie? They talk of transparency: “It’s one thing to say all you can eat is gone,” Melone told the Wall Street Journal. “It’s another to have consumers worrying, ‘Can I stream this radio?’” This isn’t going to be abrupt, and it won’t affect all people equally. But one thing’s for sure, if you use your phone’s data plan a lot, you’re going to start paying more than $US35 per month for it. Even if the “unlimited” plan remains, it’s certainly going to cost more, and be one of a multitude of levels or options.
The home ISP business went through these similar phases: The dial-up age when we kept track of specific hours online gave way to the strange time of the single device with unlimited data. Routers soon became a fixture in every home – to the chagrin of broadband providers – and now, in this moment, most of us pay a fixed rate for unlimited data, capped by speed rather than maximum downloads. But as all of you pirates know full well, there are maximum-download caps out there too, and more and more people are becoming eligible for that taxation.
You may say, “Phew, I’m definitely not a target.” You may think you’ll never use wireless like you use your home broadband connection, that your phone is just a phone – one that, sure, streams songs and stuff, but big deal, right? But think about the MiFis of the world. Better still, think of Sprint’s Overdrive WiMax-to-Wi-Fi router? And what about the next-generation of WiMax and LTE phones, which will hopefully be able to be used as Wi-Fi hotspots? If your phone can give connectivity to your computer – and whatever else you have within 10 metres – you’re gonna have to pay for that. And God help us all if the Hulu iPhone app ever shows up.
My fear is that metered pricing will feel like a gotcha, like when you go over talk-time minutes. The problem with those minutes are that you have to provide a “best guess” of how much you’re going to talk, and if you go over, they nuke your wallet. Sprint tried a plan that just charged different reasonable amounts of money depending on how much or how little you used your minutes. Both of these are flawed. The best guess is often based on nothing, and the variable pricing is too confusing: you never know what you’re going to be paying month to month.
As these carriers roll out their metered plans, hopefully they will combine these two types of billing. We need helpful constant monitoring. (At the moment, the best way to keep track of an iPhone’s downloads requires AT&T’s optional app.) We have to be aware of our usage, comfortably not naggingly, and when we go over, we need to be treated like fans of the service, not like criminals stealing cookies from the wireless-broadband cookie jar.
So what’s it gonna be AT&T and Verizon? And more importantly, when‘s it gonna be?
All You Can Eat neon by Jeremy Brooks/Flickr, used under CC license
Steven Hutchinson
March 13, 2010 at 9:33 AM
Using basic economics, you can easily prove that it is much better to have metered (variable) pricing based on how much data you plan on using.
The network can only hold so much traffic at single point in time. By congesting it with unlimited data plans you ruin the resource for everyone, including those who desire it enough that they are willing to pay more for it.
At my university I always have trouble finding a car parking space. There are always people complaining, and a lot of them want the annual parking permit price to decrease (they can never really find a park anyway). I want them to increase the price… i work part-time, and i’d be willing to pay up to four times as much as the current permit price to ensure a vacant parking spot when i arrive on campus. By increasing the price, you free up the resource for those who desire it more.
Report Permalinkformulated
March 14, 2010 at 1:44 PM
Welcome to Australia
Report PermalinkTerence
March 14, 2010 at 9:33 PM
“By increasing the price, you free up the resource for those who desire it more.”
No, what you do is free up the resource for those who can *pay* more. That doesn’t necessarily make it wrong because well, nothing is free anymore. But you shouldn’t pretend that raising prices will more fairly distribute something to the more deserving. It just increases the gap between the haves and have nots.
Report Permalinkdotnetnuke modules
March 15, 2010 at 12:16 AM
I wish they have this plan with competitive price in oz.
Report PermalinkViddy
March 15, 2010 at 11:48 AM
Not sure if you read the post last week? TPG about to announce an unlimited data plan here in Oz.
I know AAPT already do an unlimited bundle with phone etc, but this will be the 1st uncapped purely data service.
…get your JAP fired up, cos it’s torrent time!! – legal ones of course.
Report PermalinkAzariah
September 10, 2010 at 12:24 PM
You mean there are legal torrents? :D
Yeah Australia still has unlimited internet plans. It’s the Americans that are getting slapped. FYI I see no reason why I should pay extra money per Gb of data just because I use need to use wireless on my laptop or phone.
Also what’s with this time limit on when I can use my credit? Seriously!
My family are paying aprrox 2Gb per Australian Dollar, or 50cents per 1Gb, on a DSL connection. (that’s on a 120Gb/month plan) Why should I pay approx $20 per Gb of data on a wireless connection? (and that’s per month) Sure infrastructure for wireless is more expensive (I work in consumer IT) but honestly! Thats 60 times the price!
I for one can wait until they come to their senses! And have data available for $5/gig with no time limit that might be reasonable at least.
Oh and to the person that said that variable pricing is cheaper your wrong! For a wired connection maybe but honestly having to worry about going 1mb over 6Gb and getting slapped with the 12Gb price would have me in stitches.
Sorry but I disagree.
Maybe our politicians should discuss this sometime they might come to a use full decision for once. ;)
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