AT&T data no longer unlimited

[red-beard]

From the WSJ today. New subscribers are not going to be able to get unlimited plans. I expect they will dump all "unlimited" plans soon.

AT&T Moves Away From Unlimited-Data Pricing

By ANDREW DOWELL
AT&T Inc. is abandoning unlimited-pricing plans for new wireless subscribers to email and Internet services on smartphones, kicking off an important and long-awaited shift in how carriers bill their customers.

The change, which takes effect next week, could lower the cost of service for the vast majority of AT&T's users but potentially raise rates significantly for heavy data consumers.

With the move, AT&T's second price cut for wireless plans in six months, the company appears to be trading a hit to short-term revenue for greater control of its network and more power to price accordingly as wireless-data usage grows.

AT&T said Wednesday it will eliminate its $30 unlimited data plan for new smartphone subscribers starting June 7, when Apple Inc. is expected to announce its latest iPhone. The plan will be replaced by new offerings costing $15 an month for 200 megabytes of data traffic or $25 a month for 2 gigabytes. AT&T says 98% of its customers use less than those amounts. Users who exceed 2 gigabytes of usage will pay $10 a month for each additional gigabyte.

The new plans will lower the cost of an entry-level voice and data plan for smartphones by $15, to $54.99. Existing users will have the option of sticking with their current plans indefinitely, even if they switch phones, AT&T spokesman Mark Siegel said.

AT&T is also dropping the $30 unlimited-data option for new buyers of Apple's wireless-enabled iPad and replacing it with the $25 a month 2-gigabyte plan. IPad users currently paying for unlimited data will be able to keep doing so.

"The new plans appear well designed to reduce undue network stresses, as they will sweep AT&T's heaviest users into higher priced plans, or, perhaps more likely, will curtail their profligate usage," said Craig Moffett, an analyst at Sanford C. Bernstein.

Executives at AT&T and Verizon Wireless, a joint venture of Verizon Communications Inc. and Vodafone Group PLC, have said this year that consumers are going to have to start paying for the amount of data they use as devices become more sophisticated and traffic explodes

The question now is whether other carriers will follow suit. A spokesman for Verizon Wireless declined to comment, but Verizon Wireless Chief Executive Lowell McAdam indicated in an interview with The Wall Street Journal last month that he, too, is looking at pricing based on use.

"The old model of one price plan per device is going to fall away," Mr. McAdam said, adding that he expects carriers to take an approach that targets a "bucket of megabytes."

Sprint Nextel Corp. wasn't immediately available to comment.

AT&T is scrambling to improve its network in New York and San Francisco, two cities where the crush of data use from the iPhone has hurt call quality. The company believes heavy data use by a small number of subscribers is hurting network quality. Ralph de la Vega, chief executive of AT&T's wireless and consumer units, has said 3% of the company's subscribers account for 40% of its data traffic.

The difficulties are a key concern for Apple, an important partner for AT&T, still the exclusive carrier for the iPhone in the Apple Chief Executive Steve Jobs, speaking at the All Things Digital conference Tuesday evening, said the carrier has made progress but has more to do.

"They're doing pretty good in some ways, and in others they could do better," Mr. Jobs said. "I wish they were improving faster... [but] I'm convinced that any other network, had you put the iPhone on it, would have had the same problems."

In January, AT&T and Verizon cut the price of their unlimited voice plans by 30% in part to pull more subscribers into data plans. Growing data revenue at AT&T has offset the erosion of voice plans. The company said the new data plans would only have a minor impact on revenue and said they don't affect its announced financial projections for the year.

Analyst Philip Cusick at Macquarie Securities says AT&T may see lower growth in data revenue in the short term as a result of the new changes, but will gain leverage over the heaviest data users, improving its ability to manage its network and charge for capacity. Tiered plans may also pull more customers into data plans, he said.

Separately, AT&T said it would allow iPhone users to use their devices as modems beginning June 7, a practice called tethering, for an extra $20 a month.

—Roger Cheng contributed to this article.
Write to Andrew Dowell at andrew.dowell@dowjones.com

Actually, the pricing seems very reasonable. $10 per gigabyte is fine. Previously, most of the companies were charging $10 per MEGABYTE, if you didn't have a plan.

[HHI944]

If verizon adopts simillar policies, I'll have to turn the wifi back on on my droid. Last month's data usage was 9.31 gb, but I never use my wifi.

[jyl]

I need to measure data usage for self and wife. I suspect we'll be able to downshift to one of the cheaper plans and either save money, or add a iPhone for my daughter for the same monthly budget.

[jyl]

I'm reading that 2% of T's wireless subs consume 25% of the bandwidth. They say that 65% of smartphone subs use <200MB/month and 98% use <2GB/month. Someone using 10GB/month is not profitable, or not profitable enough, for T.

They'd like to get rid of those people and/or force them to use WiFi more, while using lower-priced plans to attract more subs.

[legion]

The plans were never unlimited. They were called "unlimited" but the fine print spelled out a bandwidth cap and fees for exceeding that cap.

All AT&T did was change the name of their plan, and publicize the cap and fees.

[VINMAN]

you will buy VERIZON..... only VERIZON... there are no others....

[stomachmonkey]

Unlimited plans are never truly unlimited.

This concerns me more as it's the 1st shot across the bow for pay per usage models.

Cable providers have been mulling exactly the same model for a couple of years now but I think no one wants to be the first to test the waters for fear of consumer backlash.

Larry Ellison envisioned digital distribution as the future of media delivery 15 years ago. Took longer than he anticipated but it's here, Netflix, Hulu, PlayStation Network, xBox Marketplace, Steam, youtube, etc....

My fear is the cable providers will turn streaming services into premium tiers.

You can get your basic broadband access for $xx.xx per month but access to high bandwidth services will become an additional premium channel same as HBO, Cinemax or even HD content.

[VincentVega]

My first question when I read this was how much data do I use in a month? With my old shoe of a phone I'm sure it's not that much (9gb?!) but I want to find out.

I like the idea that I could/potentially save a little $$ every month, the $30/mo option is required for my phone.

[widebody911]

You can bet cable CEOs touch themselves at night while dreaming of this...

Originally Posted by stomachmonkey

Unlimited plans are never truly unlimited.

This concerns me more as it's the 1st shot across the bow for pay per usage models.

Cable providers have been mulling exactly the same model for a couple of years now but I think no one wants to be the first to test the waters for fear of consumer backlash.

Larry Ellison envisioned digital distribution as the future of media delivery 15 years ago. Took longer than he anticipated but it's here, Netflix, Hulu, PlayStation Network, xBox Marketplace, Steam, youtube, etc....

My fear is the cable providers will turn streaming services into premium tiers.

You can get your basic broadband access for $xx.xx per month but access to high bandwidth services will become an additional premium channel same as HBO, Cinemax or even HD content.

[red-beard]

Originally Posted by stomachmonkey

Unlimited plans are never truly unlimited.

This concerns me more as it's the 1st shot across the bow for pay per usage models.

Cable providers have been mulling exactly the same model for a couple of years now but I think no one wants to be the first to test the waters for fear of consumer backlash.

Larry Ellison envisioned digital distribution as the future of media delivery 15 years ago. Took longer than he anticipated but it's here, Netflix, Hulu, PlayStation Network, xBox Marketplace, Steam, youtube, etc....

My fear is the cable providers will turn streaming services into premium tiers.

You can get your basic broadband access for $xx.xx per month but access to high bandwidth services will become an additional premium channel same as HBO, Cinemax or even HD content.

That already exists. I'm on the Premium tier with Comcast which gives me 25 Mbps. The regular is 5-8 Mbps. DSL definitely has multiple tier service. Again, I have the highest available at 6 Mbps, but there are 3 Mbps and 750 kbps levels.

[stomachmonkey]

Originally Posted by red-beard

That already exists. I'm on the Premium tier with Comcast which gives me 25 Mbps. The regular is 5-8 Mbps. DSL definitely has multiple tier service. Again, I have the highest available at 6 Mbps, but there are 3 Mbps and 750 kbps levels.

Not bandwidth. Data usage.

Think of the latest Sony PSP-GO.

No longer uses a disc.

Product is downloaded from the PlayStation Network either directly to the PSP-GO or to a PS3 then transferred.

If a high data service Like PSN is placed into a premium tier then you'll effectively be paying a download tax for the product.

Or think of it this way.

You use Netflix and rather than having discs mailed to you, you stream them to your gaming console or PC.

Next time you go to grab a movie a box pops up telling you that you need to pay $xx.xx more per month to access Netflix via your cable providers network.

[red-beard]

So, more like Pay per View, than HBO.

I really don't have a problem with the concept, as long as there is competition and I have a choice. If I don't like Comcast, I can get Dish, Direct TV or Uverse. I have 2, well, maybe 3 now, options for Broadband (WiMax just went live here). I'm not a bandwidth hog, so I don't have an issue with this.

It is kind of interesting, phone service is now all you can eat, but data will be pay per byte? OTOH, voice data is infinitesimal these days.

[Jim Richards]

Originally Posted by VINMAN

you will buy VERIZON..... only VERIZON... there are no others....

I...will...buy...Verizon.

[stomachmonkey]

Originally Posted by red-beard

So, more like Pay per View, than HBO.

I really don't have a problem with the concept, as long as there is competition and I have a choice. If I don't like Comcast, I can get Dish, Direct TV or Uverse. I have 2, well, maybe 3 now, options for Broadband (WiMax just went live here). I'm not a bandwidth hog, so I don't have an issue with this.

It is kind of interesting, phone service is now all you can eat, but data will be pay per byte? OTOH, voice data is infinitesimal these days.

Not really like Pay Per View. With PPV you pay a fee for each movie you watch. They don't charge you a monthly fee for the service.

More like HBO, it's generally not a part of a standard package, you pay extra for it or buy a higher tier package that includes it.

So the thought is to "break up" the internet.

Standard sites that don't use a lot of bandwidth are part of the base package.

If you want to watch youtube videos you need to either add it as a premium channel or move up to a higher tier package that includes it.

It's a weird situation.

Currently cable providers negotiate with networks to carry their programming and the cost is passed on to the consumer.

Cable providers incur a cost by providing access to high usage sites that needs to be amortized across their subscriber base.

As more media moves online and ESD becomes more prevalent the providers infrastructure will need upgrading to keep up with demand.

Broadband penetration by household is around 65%. Taking into account geographic locations that are not profitable to service it would appear that providers are close to saturation.

So they are looking at pricing models that will offset increased infrastructure costs among the existing customer base.

[Tidybuoy]

Not Cell Phone Related:

I cancelled my ATT home phone, and DSL service yesterday.

My new comcast internet, home phone, and 2nd line for fax is $45 per month. AT&T was $105 last month which included $14 for long distance in which not one single long distance call was made (it was all fees, surcharges, & crap).

Good Riddence AT&T!

[Jim Richards]

Comcast ---> ack!

[Tidybuoy]

Originally Posted by Jim Richards

Comcast ---> ack!

Yep, I hate em both....but those are my options. I'm sure in 18 months when Comcast has managed to "adjust" my bill in an upward manner, AT&T will have the discounts....I gotta do what I gotta do

[Pazuzu]

Originally Posted by Tidybuoy

Not Cell Phone Related:

I cancelled my ATT home phone, and DSL service yesterday.

My new comcast internet, home phone, and 2nd line for fax is $45 per month. AT&T was $105 last month which included $14 for long distance in which not one single long distance call was made (it was all fees, surcharges, & crap).

Good Riddence AT&T!

Really?? My ATT unlimited phone, unlimited long distance, and 1Mbps DSL is $76 on the bill, after all taxes and fees and crap. Even if you had faster DSL, I can't imagine that it could bump it $30 a month!

Switched to Uverse, we'll see what that's like...phone, 12Mbps internet and 250 channels of crap for $150 a month.

[/segue]

[sammyg2]

smartphone, iphone, gadgetphone, doan matter to me.
With my phone I can call someone and they can call me, and we can talk to each other.

Back at the camp, everybody discovers that their laptops are working and rejoice at the return of the Internet.
Shelley, ecstatic that she will now be able to communicate with Amir, suddenly hears a boy call out her name.
It is the actual Amir, whose family had also traveled across the country to get Internet.
The two are initially awkward around each other, and make plans to e-mail each other instead of communicating in-person.

[mikester]

I'm surprised people don't make this comparison more often. In the dawn of the internet you paid for an online service by the minute.

then they went to 'unlimited usage!'

We have (had?) 'unlimited usage* (gbps)' for internet and internet enabled phones.

*not to exceed 5gb per month or some nonesense that does not equal unlimited even though that is the word they use

Now Comcast is publicly capping data usage on their cable networks (250gb per month I think). ATT announces these plans plus a tethering CHARGE! You're going to have to PAY to enable TETHERING!!!

Verizon will do exactly the same thing - they have been discussing it and are the worst about killing folks off their network if they over use on their 'unlimited' plans. When they first started putting out those EVDO cards and we used them where I worked we got plenty of warning letters from them over users using more than 5gbs.

We're back to the 'per x' charges. StomachMonkey is right - it really could become an 'internet tax' sort of situation if you access a 'defined premium' site and are on a basic tier of internet access. It would be tragic to the consumer I think since there really isn't a good mechanism to encourage competition.

You can say 'open access' like the telcos must provide to their lines but Comcast is ordered to do this in a few markets and allow Earthlink on their lines. Earthlink must adhere to Comcast's caps as well. There is no competition there - it's Comcast's way or the highway. So even though you get your bill from Earthlink - you're a Comcast customer.

I've worked for ISP's in the past and worked in instances where open access was a requirement and it is a joke. The cable provider still has to manage everything about the other compay's 'customers'.

The only option I feel is for the infrastructure to be either publicly owned or the conduit to be publicly owned. In that case a company could run their own fiber in the conduit to a neighborhood and provide services and competition. Letting the companies dig and own the lines blocks out any form of competition at all.

I live in the greater Los Angeles area. Time Warner and Charter are the only cable provider these days (10 years ago there were 4 locally). Charter pretty much just has Long Beach I think. In my neighborhood I can't get DSL. I can get a satellite but I can't get DSL for internet access. I can't get FIOS, my only choice is Earthlink (which I had for a while) via Time Warner or Time Warner directly.

Competition in the cable tv/Internet/cellular industry is a joke. I have an iPhone and I really like it - I hate Apple and the way they do things but the iPhone really is awesome. An iPad is probably a little more than I need so if falls off the awesome train. There is no competition on the iPhone platform in the US - I guess if you really feel strongly enough you can get a different phone.