Is AT&T's New Data Plan 'Evil'?

Web guru Jeff Jarvis thinks so

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You would have thought AT&T had insulted Jeff Jarvis's mother. On Wednesday, the telecom giant announced that it was ending its unlimited $30/month data package for smartphone customers. Jarvis, a new media high priest of sorts, called it "retrograde," "cynical" and "evil."

AT&T's service sucks... But AT&T response to this core business problem is not to improve its service, to invest in better ways to handle more customers.

No, AT&T's response is to change its pricing to make us use its service less. That's cynical. It's evil.

The new plan charges users for how much bandwidth they consume. The cheapest plan is $15 per month for 200 MB of data and the most expensive is $45 per month for 2 GB. Customers who currently have the $30 unlimited plan can keep it but they won't be allowed to tether their iPhones. As with most new payment plans, some will benefit and others won't. Was Jarvis's fire and brimstone lament over-the-top?

  • Yes: Jarvis Is Dead Wrong, writes Jerry Brito at the Technology Liberation Front: "He provides no evidence that this is anything but AT&T facing economic reality. The iPhone was a revolution, and how much data people consume given an awesome device turned out to be much more than AT&T was ready for. Now they're asking their customers who use the most data to pay more, and this is evil? Not only is it not evil, it's incredibly fair. Most people will probably pay less for service. The cheapest of AT&T's new plans is $15 for 200 MB of data. That's $15 cheaper than their current $30 for unlimited iPhone use. According to AT&T, 65 percent of their customers use less than 200 MB of data a month."
  • Don't You See? This Is Retrograde, explains Jarvis: "The sick and stupid irony of this is that it was AT&T -- in the person of Tom Evslin, then head of AT&T WorldNet... that turned off the ticking clock on the internet when it established flat-rate pricing of $19.95 a month for unlimited use of the internet. That is what exploded use of the internet and enabled us all to browse without worry. That turned the internet into an industry. And now it's AT&T that turns the clock back on. Tick. Just as mobile is about to explode with new devices and new uses for us all to be ubiquitously and constantly connected doing all kinds of new things and creating new value along the way, AT&T says it wants nothing to do with that explosion (because it would have to work harder and invest more to do better). So it makes a business strategy out of imprisoning Apple fanboys as long as it can and making them use its service less. Tock."
  • It Makes a Lot of Sense from AT&T's Standpoint, writes Dan Indiviglio at The Atlantic: "First, this change is likely transitional. At this point, the service provider is just getting customers used to the idea of eliminating the unlimited data option. Eventually, it could raise its prices to levels that are more profitable for the company--and less attractive to customers. Second, AT&T is sticking it to the heavy data users. That 2% of users is obviously using far more than the average customer. Yet, these people are paying the same amount for their data plan. That doesn't make sense. AT&T wants these people to pay more or curb their usage. After all, anyone using more than 2GB of data per month is putting far more stress on the company's network than the average user."
  • It's Bad for iPad Users, writes Stan Schroeder at Mashable: "From the iPad user's perspective, AT&T's new pricing is a big letdown compared to the previous unlimited data plan. Even the most active iPhone users won't burn through more than a couple of gigabytes every month, but the iPad is a far more demanding device data-wise, and activities such as Netflix streaming will quickly exceed the limit of AT&T's DataPro plan. Two gigabytes per month is just not enough data for a device such as the iPad, and we sense that many users will feel let down by AT&T's new data plans."
  • Good for Blackberry Users, writes Dan Nosowitz at Fast Company: "That's actually good news for, say, BlackBerry users, whose phones are great for email but not so great for data-intensive tasks like web video. If these users exceed that 200MB, they'll be charged another $15 for another 200MB. AT&T, interestingly, estimates that 65% of its smartphone customers use less than 200MB of data per month."
  • This Will Probably Spur Wireless Investment, writes TMCnet: "It could signal a slow and steady shift to getting consumers used to paying for the data they use. And this can be great news for wireless infrastructure companies as well as companies providing backhaul to towers. Ceragon, DragonWave, Aviat Networks Adva Optical Networking and Allied Fiber are just some of the companies who will likely see more business as a result."
  • But Bad for Power Users, writes Dennis Yang at TechDirt: "Tethering is only available with one of the new capped plans. Those who already have the old $30 unlimited plan will be able to keep it... but won't be able to tether. So, existing power users have to decide between $30 a month for unlimited internet data without tethering, or $45 a month for 2GB of data with tethering -- of course, with tethering, data usage would likely go up... even as the amount of data you can use goes way down."
  • What Saith Steve Jobs? Though he didn't specifically address AT&T's new plan, the Apple CEO recently addressed the company's somewhat dented customer satisfaction rating:
This article is from the archive of our partner The Wire.