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Old 02-29-2012, 03:00 PM   #1
Sin and Punishment
Reality's Avatar
Join Date: Oct 2002
Location: Ohio
Posts: 14,590
Data Throttling and Greedy Future Goals.


As the demand for high-speed wireless data access continues to grow, carriers are trying to come up with new ways to cover their costs. The latest proposal from the folks at AT&T: That the people who build data-hogging apps should ante up.

AT&T executive John Donovan likens the idea to that of 1-800 numbers. "If you take this app, this app will come without any network usage," he explains.

So imagine that you only have a 1GB/month data plan (or a so-called "unlimited" plan that gets throttled somewhere around 2GB), but the company that makes your favorite streaming video app is the one paying for the data used by that app. You could stream away without fear of going over your limit.

Donovan says that some companies have shown interest in the idea as a sort of promotional tool that would allow them to get a leg up in a crowded app market.

But some argue that AT&T's proposal could stifle competition.

Currently, a clever developer can have success simply by creating a solid product at a reasonable price. But if developers are suddenly expected to foot the bill for data usage, they wouldn't be able to bring their product to consumers without significant financial backing.

"On its face, AT&T's new proposed plan to charge app developers for data consumption is troubling news for consumers," explains Parul Desai, communications policy counsel for Consumers Union. "They could face limited choices in the app market: While established app makers would be able to comply with this new scheme, new entrepreneurs with great ideas but limited capital could view such a pricing plan as a barrier to reach consumers."

Another thing to consider here is whether or not AT&T would be double-dipping.

Say, for example that 75% of a customer's data usage is from Facebook and Netflix, and say that both of these businesses agree with AT&T to cover the data used by these apps. Can you imagine a world where AT&T would decrease the price of that customer's data plan by 75%? No, of course not. So the customer would be paying and the app builders would be paying.

GigaOm's Stacey Higginbotham points out this is precisely what AT&T and other internet providers have long been praying for: "[i]f those apps choose to pay that cost,then AT&T has managed to do what it has tried to do since Ed Whitacre famously put forth the idea in 2005 force those pesky web companies to pay to use AT&T's pipes."

Wireless carriers will have you believe that data throttling is a necessary evil to prevent a small number of bandwidth hogs from ruining the data party for everyone else. But is that really the case? A new study suggests that data throttling might be nothing more than a ploy to get grandfathered unlimited users to ditch their plans and switch to a tiered plan instead.

Validas, a company that analyzes cell phone bills for a living, combed through data from over 55,000 mobile phone bills in 2011. What it found was that data throttling appears to have little impact on easing network congestion.

"When we look at the Top 5 percent of data users, there is virtually no difference in data consumption between those on unlimited and those on tiered plans -- and yet the unlimited consumers are the ones at risk of getting their service turned off," Valipas states in a blog post. "So it's curious that anyone would think the throttling here represents a serious effort at alleviating network bandwidth issues. After all, Sprint gets by fine maintaining non-throttled data to its customers."

One thing that's interesting to note is that Verizon Wireless customers subscribed to an unlimited plan use less data than those rocking a tiered plan, according to Validas. The same isn't true for AT&T, though the disparity is less than a gigabyte.
Found it pretty interesting. Cell Phone Companies require people to get data plans for their smart phones. Then approve 98% of their product lines to be only smart phones. So now they complain about smart phone data use and up fees and apply restrictions. But turns out that was probably the plan from the start cause it a great way to make people pay for lack laster services with a high bill.
Outpostnine is that 1%.
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