Tuesday, September 1, 2015

A better idea for AT&T?

AT&T's new metered price plans for iPhone data users raise the question: Why didn't the company simply raise the price for unlimited usage, as critics such as Slate's Farhad Manjoo have proposed?

A better idea for AT&T?


Slate's Farhad Manjoo offers "Kudos to AT&T for dumping unlimited-data plans," in a piece the online magazine tagged as "Why AT&T was right to dump its unlimited iPhone data plans." (You can read my blog on AT&T's announcement here.)

Here's a modest proposal: Maybe somebody at Slate should actually read Manjoo's own suggestion, first published last year and graciously republished yesterday beneath this lead-in:

On Wednesday, AT&T announced it was scrapping unlimited data plans for its wireless phones, including the iPhone. Heavy data users will now have to pay extra to use more than the 2 gigabytes allowed under AT&T's DataPro plan; the company argues that these changes will reduce network congestion and cut monthly rates for less-frequent users. Last year, Farhad Manjoo begged for AT&T to do exactly this, arguing that tiered pricing was the best way to ease traffic on the wireless carrier's congested network. The original article is reprinted below.

But Manjoo didn't urge the fully metered plans that AT&T has announced. Instead, he urged the company to deal with network congestion by charging its highest-demand users a bit more, and everyone else something less:

How would my plan work? I propose charging $10 a month for each 100 MB you upload or download on your phone, with a maximum of $40 per month. In other words, people who use 400 MB or more per month will pay $40 for their plan, or $10 more than they pay now. Everybody else will pay their current rate—or less, as little as $10 a month. To summarize: If you don't use your iPhone very much, your current monthly rates will go down; if you use it a lot, your rates will increase.

That's a sensible idea that would serve two worthwhile ends: encourage entry-level smartphone users with more-affordable pricing (which AT&T's new plan also does), and encourage high-end users to continue to experiment with what the mobile Internet can offer. As Manjoo wrote:

Some iPhone fans will argue that metered pricing would kill the magic of Apple's phone—that sense of liberation one feels at being able to access the Internet from anywhere, at any time. The trouble is, for many of us, AT&T's overcrowded network has already killed that sense, and now our usual dealings with Apple's phone are tinged with annoyance.

Somebody should have read Manjoo's proposal more carefully before they slapped a new headline on it and said, "See how prescient we were?"


Inquirer Business Columnist
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About this blog

Jeff Gelles, who writes the Inquirer's weekly Consumer 14.0 and Tech Life columns, takes a broad look at the marketplace of goods, services, and ideas.

Reach Jeff at jgelles@phillynews.com.

Jeff Gelles Inquirer Business Columnist
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