Cable Hearts iPhone's Usage Caps
Suddenly, AT&T and the iPhone have presented several new compelling reasons to sign up for cable’s broadband service.
The new iPhone 4, introduced yesterday to the predictable media crush, provides 10 hours of battery life for playing video. In addition, among other features, the latest model includes FaceTime, a video-calling app that lets you see who you’re talking to “anywhere there is Wi-Fi.”
And there’s the rub. Now that AT&T has eliminated its all-you-can-eat plan for smartphones, you will blow through the maximum 3G usage for the entry-level 200 MB plan if you watched just 4 minutes of streaming video per day (see AT&T Bites the Bit-Metering Bullet). That would include commercials.
Even AT&T’s more generous DataPro 2-GB plan would allow just 35 minutes per day of streaming video (assuming you used your iPhone for nothing else), according to the carrier’s online data calculator.
And the new AT&T caps, which went into effect for new customers June 7, arrive as one of the bandwidth-hungriest iPhone apps ever is set to debut. At the iPhone 4 launch, Netflix announced it will release an iPhone app this summer — something we’d heard rumblings about for months — after the video-rental service previously introduced an app for the iPad.
The upshot: iPhone users now have an economic incentive to connect over Wi-Fi networks as much as possible. Especially if they’re streaming Netflix movies or TV shows.
And that’s good news for cable operators, which provide typically the fastest broadband in a given market (versus DSL) and offer either unlimited usage or far higher caps (e.g., Comcast’s 250-GB monthly ceiling).
For now, AT&Ts metered-billing move gives a competitive advantage to providers that still offer unlimited-usage plans. And in the long run, it greases the skids for MSOs to institute consumption-based billing themselves at some point, as the Wall Street Journal pointed out in a story Monday quoting Time Warner Cable president and CEO Glenn Britt.
AT&T’s announcement “is good for this set of industries. It’s going to get the industry better aligned with natural consumer behavior than it has been,” Britt said at the Sanford Bernstein Strategic Decisions Conference last Friday.
But as Britt well knows, having been burned in TWC’s attempts to test out this concept, the success or failure of the idea is all about the execution (see Time Warner Cable: Three Mistakes on Usage Pricing).
Old Grump commented:
Or, here's a novel idea: Use phones for "phone calls", and watch TV and movies at home with your family.
I'm just sayin'....
IPPlanMan commented:
File a complaint with the Federal Trade Commission (FTC) and Better Business Bureau (BBB). The FTC is empowered by law to investigate and address deceptive marketing practices such as these by Apple and AT&T. The Better Business Bureau can also investigate these kinds of practices.
It’s easy and takes only a few minutes to file a complaint.
ftccomplaintassistant[dot]gov
bbb[dot]org/us/
Here’s the company info. This only takes a few minutes for each.
Apple
1 Infinite Loop
Cupertino, CA 95014
408-996-1010
AT&T
175 East Houston Street
Dallas, TX 78205-2255
210-821-4105.
I believe that the key points are:
Apple touted and advertised the $29.99 data plan as a major inducement to buy the iPad 3g.
Apple described it as a “breakthrough deal” with AT&T, leading consumers to believe that Apple had locked in the terms and price.
A key, heavily advertised, feature was the ability to jump between plans or have no 3G plan as dictated by needs and budget.
The “grandfathering” announced by AT&T forces customers to either keep an unlimited plan continuously active in order to not lose it.
The change in the plans has significant impact on the value of the device and the manner in which it can be used.
We want AT&T and Apple to honor the advertised deal, not give us money, a coupon, a refund, free service for a month, etc. (That’s what I want, anyway.)
If you’re one of the people cheering because your bill got cut by $5 per month, don’t bother with replying to this. This is a legal issue related to FTC rules and regulations on false and deceptive advertising, not whether you like the new plans better because you don’t happen to move more than 2GB per month.
Moose commented:
It all boils down to "How high is the cap?" Nobody cares about Comcast's cap because it's so high. AT&T's cap is ridiculously low, and AT&T will feel the backlash. Just ask TWC. The cap has to be perceived as reasonable.
Ramon B. Nuez Jr. commented:
I love how AT&T states "better aligned with natural consumer behavior." It seems that AT&T is (re)defining "natural" and telling its subscribers that they really don't need unlimited plans.
Listen, this has nothing to do with what "natural behavior" but everything to do with protecting its infrastructure. The smartphone ecosystem is growing aggressively and by 2014 mobile data traffic will increase 50 x's what it was in 2009. The majority of that traffic will be user generated and video. Additionally -- Cisco's VNI report states that by 2014 the data traveling the Internet will be 63.9 EB per month.
AT&T will use multiple tools to prepare itself for the monsoon of data heading its way 1. upgrade its radio interfaces to HSPA+ and LTE, upgrade its core network to 4G, throttle data traffic the exceeds established caps and metered data plans.