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Some Thoughts on Shared Data

Mon, 08/06/2012 - 10:31am

AT&T today announced that its new Mobile Share plans will be available August 23. I used the company's "Mobile Share planner tool" to find out that I'll about break even if I switch from my current family plan to one of the new plans, which will also include free tethering for my Wi-Fi-only iPad. 

For the most part, I’ve come to terms with shared data plans. However, I do have to chuckle a little when it comes to the monthly “per-device” charges.

With both AT&T and Verizon’s new shared data plans, voice minutes and texts are unlimited. The monthly device fees are the thinly veiled pricing tools by which carriers are recouping those lost SMS and voice revenues—$35 for each smartphone, $30 for a feature phone, $10 for a tablet.

The whole thing is almost blush-worthy. I mean, wouldn’t it be more honest to just call it a talk-and-text tax? That’s essentially what it boils down to.

What I find most interesting is that the new system penalizes feature phone users with a monthly $30 device fee.

Back in the days of unlimited, it used to be the other way around—heavy data users were charged big bucks for the smartphone, while feature phones cost less. Now, in the days of the per-gigabyte economy, it’s the devices that don’t use much data that are garnering premium monthly charges. Sounds like a good way to push more users into a smartphone upgrade, no?

I realize that these aren’t exactly startling realizations for anyone in the industry. However, those families with two iPhones and three feature phones (for the kids) might be a bit baffled by this new system, which makes things like the Mobile Share planner tool all the more important as the carriers evolve towards and all-IP environment. 

For a long time, I thought this paradigm shift would be a painful transition for consumers but now I’m not so sure. People are still confused about what 4G means, much less HSPA+, LTE or WiMAX, and yet I’m beginning to see that none of that really matters. Necessity begets invention, and in the end it’s all those seductive devices and services entering the market that will drive awareness of data usage and pricing.

We can equate it to the automobile industry. Buy yourself an SUV and you realize rather quickly that you’re hitting the pumps a heck of a lot more than you were in your 1989 Honda Civic. Likewise, those who upgrade from an original Droid to a Samsung Galaxy S III running on Verizon’s LTE network, are most definitely going to notice the data gauge moving a bit a faster than in the past.

That analogy to the oil and gas industry isn’t too far off given that spectrum is commonly referred to as a limited resource, which leads one to wonder the extent to which it’s in the carriers’ best interests to cry “spectrum shortage” at every opportunity.

I don’t doubt the impending capacity crunch, but I will say that publicly reinforcing an environment of scarcity will always create the right conditions for premium pricing, no matter what the commodity happens to be. I wonder if we’ll one day see data speculators setting fluctuating market prices for bits and bytes? 

Comparisons to fossil fuels only go so far though. You can’t quit paying your electric bill in the middle of January when natural gas prices are through the roof. However, you can quit watching YouTube on your smartphone if the price of data skyrockets. 

Regardless of how this new data game plays out, you can bet we’re going to see some interesting new models emerge in the next few years (Karma anyone?). While there are a lot of uncertainties, one thing is for sure: consumers will dictate what will and won’t fly on the open market.

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