AT&T To Discourage Mobile Data Usage

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A top AT&T executive told investors today that the company hopes to improve its network by encouraging data hogs to decrease usage. This, of course, is in addition to other measures the company is taking to attempt to answer the criticism that competitors have more reliable networks. How might the AT&T accomplish this goal?

Here's a report from the Associated Press:

AT&T is upgrading its network to cope, but its head of consumer services, Ralph de la Vega, told investors at a UBS conference in New York that it will also give high-bandwidth users incentives to "reduce or modify their usage."

Incentives, eh? Like if you don't use as much data, AT&T will knock $5 off your monthly bill? I doubt it. That would result in millions of users having lower bills, and an awful lot less revenue for AT&T.

The only realistic methods for giving users an "incentive" to use less data is to have some kind of system to charge heavy users more. That could mean a surcharge if you go over a certain monthly allotment. Alternatively, AT&T could create tiers of data usage that fees are based on. There's also the more basic pay-per-megabyte consumed option. One way or another, the "incentive" to use less data will, no doubt, give heavy users the opportunity to avoid new fees if they cut down their usage.

I've asserted a few times that usage-based data fees are inevitable -- not just from a mobile standpoint, but for any internet usage. Data hogs cost bandwidth providers more money, so eventually they'll be forced to pay up. And this is fair: those who use less data shouldn't be subsidizing those who use more. This comment from AT&T seems like a first step towards that end.

Heavy users are a serious problem. De la Vega also mentions that only 3% of smartphone users consume over 40% of network capacity. So next time you have a call dropped, think about that guy trying to stream a movie through his iPhone.

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Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation. More

Indiviglio has also written for Forbes. Prior to becoming a journalist, he spent several years working as an investment banker and a consultant.
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