Thursday, June 03, 2010


All-you-can-eat data?

AT&T has announced that they will end their unlimited mobile data plan next week. It doesn’t sound like the result will be bad, though: the outgoing unlimited plan is $30 per month. The new plans are $15 per month for 200 megabytes, and $25 per month for 2 gigabytes — both with reasonably priced options to add more if you exceed the limit.

This all comes with some meaningless estimates about what you might be able to do with that much data:

The lowest-priced data option is called DataPlus and will cost $15 a month. It gives mobile phone subscribers access to 200 megabytes of data each month enough to send and receive 1,000 e-mails without attachments and an additional 150 with attachments. The plan would also offer access to 400 Web pages, the ability to post 50 photos to social Web sites and watch up to 20 minutes of streaming video through the mobile phone.

That’s working with averages, of course, and it all depends upon how big the attachments, photos, and web pages are. The picture I posted to these pages this past Sunday is 50 kilobytes, the version you get if you click on it is 270 kilobytes, and the original on my computer is 1.4 megabytes. Google’s home page is about 120 kilobytes, the IBM home page is currently about 870 kilobytes, and this page of photos is almost 3 megabytes, because the guy who did it doesn’t understand the difference between posting thumbnails and using HTML to scale the full-sized pictures. It’s all wildly variable.

What’s more significant are their figures on the numbers of current customers that fit into the options they’re offering. They say that 65% of their customers use less than 200 megabytes per month on average, and 98% use less than 2 gigabytes. Of course, “on average” means that some of those customers exceed the new limits during some months, but even in that event, a 200-megabyte customer who has to pay the $15 overage to get another 200 megabytes is no worse off than before. And when she uses less than the limit, her data bill is cut in half.

This seems like a fair fare, I think. The only part that strikes me as ridiculous is the $20 per month extra charge for tethering. If it came with some extra gigabytes, it would make sense. If you had to pay extra to tether your computer on an unlimited data plan, it would make sense. But, well, 2 gigabytes is 2 gigabytes, whether you use it directly on your iPhone or you use your iPhone as a modem.

The Europeans are used to limits, and paying for what they use. AT&T is starting to change the model here. Will the other companies follow? I still have an unlimited data plan on my BlackBerry, through T-Mobile. I wonder if that will change over time.


Nathaniel Borenstein said...

I just don't understand what's wrong with this logic: The goal of the carriers should be to make the users A) use the service more, and B) pay more as they use more. Metering drives people nuts and inhibits "frivolous" uses. What they should do is charge based on the peak bandwidth available -- i.e. the size of the pipe. Whatever size pipe you have, there will be no disinhibition to using the service as much as you want until you hit the bandwidth limit, at which point you will be addicted to more services and willing to pay more for a bigger pipe.

Not incidentally, this is sort of the classic model for connectivity pricing, as in "Guppy Lake is so far in the boonies that a T1 line would cost $500/month, no matter how little we actually used it."

Frisky070802 said...

I too am frustrated by this change, even if other places find it the norm. I have had a broadband modem for almost 2 years and signed up for 5GB/month rather than the lower limit (hundreds of MB) because the marginal cost was low, maybe $10 on top of $50, and I didn't want to have to worry about accidentally hitting that limit.

I just got my first smartphone, after all this time ... and I liked not having to worry about those limits.

If they are going to impose them, I think they should say that you pay for whichever plan covers you that month, not have a huge marginal cost if you pick the low plan and exceed it. There will still be an incentive to keep down usage and get the lower rate, but there won't be this huge penalty when your usage changes.

Barry Leiba said...

Frisky, it seems to me that the "Pro" plan covers you nicely, then. $25 for 2 GB, and if you exceed that you only pay $10/GB for overage. Not bad, is it?

Frisky070802 said...

Compared to $30 for unlimited usage, are you kidding me?

Barry Leiba said...

No, I'm not kidding. If you regularly use more than 2 GB, then, yes, you lose with this plan. According to AT&T, you're in the top 2% of users in that case.

But if you use less than 2 GB most of the time (let's say, 9 months of the year), then you save $5 most months. If you pay $10 extra for another GB in the other 3 months, then you pay $5 more than now for those months. In the end, that means you save $15/year.

If you really do wind up using nearly 5GB every month on your smartphone over 3G (not over WiFi) — which really does seem unlikely, but what do I know? — then, sure, you'll pay $25/month more than you are now, and it'll suck.

I know you're talking about peace of mind, but I really do bet that this new plan will cost you less than the old, unlimited plan. You'd have to spend your time streaming video with no WiFi coverage in order to pay more, I think.

Frisky070802 said...

That's true ...

If the cap were the current $30 even if I hit 5G it would be an improvement. I'll have to see how much I'm using .. when on an unlimited plan and not trying to watch out ... and see where it falls.