AT&T Targets Hoggish Smartphone Users

Some ISPs are trying tiered broadband pricing, but AT&T is looking into tiered wireless pricing. While not being up front about issues caused by the data-hogging app phone, AT&T seems to be realizing that it really, really wants iPhone users to use less bandwidth, at least in the short term.

After all, it recently released an iPhone app designed to make it easy for users to report outages and dropped calls. It's also "normal" for an iPhone to drop 30 percent of its calls in New York City. It is quite obvious that the network simply cannot handle all the traffic (and we don't need Verizon ads to tell us that).

It's true that voice plans are tiered for all carriers. It's also fact that as a relative data hog, the iPhone is unique. Its users grab far more data than traditional smartphone users, yet still have a $30 all-you-can-eat data plan. When AT&T sells a plan for its wireless-data cards, those are limited to 5GB of usage monthly. After that, customers are charged more based on their usage.

Ralph de la Vega, AT&T's wireless head, announced at an investor conference in New York City on Wednesday that AT&T plans to introduce new pricing for heavy wireless-data users. In other words, look out iPhone users. Small wonder that AT&T has still not offered tethering for its iPhones, right?

De la Vega said 3 percent of smartphone users consume 40 percent of AT&T's network capacity. Unsurprisingly, this sounds like the same sort of argument that Comcast and other ISPs have made in terms of throttling or "network optimization" when bottlenecks occur on their services. According to AT&T, most of the bandwidth is being consumed by streaming-video and audio applications, such as Internet radio.

It should be interesting to watch the reaction of users on this. Unfortunately for iPhone users, AT&T currently has iPhone exclusivity, so if they do not like what AT&T proposes, they cannot do anything about it, unless they want to switch to a different phone.

This isn't the first time that AT&T has pointed to smartphones as the reason for its network issues. To be honest, despite clamoring for the iPhone to move to the Verizon network, it is unclear if that CDMA network could handle the workload any easier than AT&T's. Perhaps after Android phones have been around on Verizon's network for a while we might have a better feel for that.

It's also unclear what users will think when they discover how a Verizon iPhone would be even more limited in terms of processes that can be run simultaneously than the AT&T version. While background processing does not exist (for the most part) on the iPhone, you can't even make a data connection while on a voice call on Verizon's CDMA network, because of a limitation of the technology.
Tags:  Apple, iPhone, ATT, Verizon