With the surging popularity of smartphones, devices previously relegated to making phone calls are now being used for infinitely more purposes: personal organizers, weather forecasters, YouTube video viewers, StumbleUpon web surfers, internet radio players, etc. But all of this wireless data comes at a cost, and unlimited data for unlimited customers is no longer possible. In a series of articles published recently in The Wall Street Journal, it is clear that the data use associated with the additional functionality of smartphones is taking its toll on telecommunication providers. Companies like AT&T and Verizon are exploring creative solutions, but for the meantime, say goodbye to unlimited data plans, and say hello to data throttling.
AT&T recently announced a plan to throttle subscribers’ data use after they reach 3 gigabytes of usage within one billing cycle. Verizon, which eliminated its’ unlimited data plan last summer, now throttles the top 5% of data users only when they are in areas where cell sites are congested. Of the four biggest wireless cellphone carriers, only Sprint still offers unlimited data plans. According to The Wall Street Journal, “The pressure on carriers has grown more acute with the rise in use of smartphones like the iPhone, essentially mini computers that make mobile Internet use easy and put a heavy toll on networks.” This enormous data usage is problematic to telecommunications companies because it requires them to invest billions of dollars building and maintaining networks that they are unable to profit from. Essentially, companies like Apple and Google profit from this data use, but it is carriers like AT&T and Verizon that incur all of the expense.
As mobile Internet traffic grows, wireless carriers are lobbying Congress and the FCC to release more licenses to use wireless airwaves. AT&T is also considering charging technology companies for the data use associated with their services. The rationale is that a customer nearing his data limit for the month may be more likely to download content if the content provider covered the cost of the data transmission. Whether these content providers will pay is uncertain, and whether they should be allowed to is another argument entirely.
Clearly, increased mobile data use is causing problems for many telecommunications companies, and these problems are being passed on to their customers. Companies can no longer provide truly unlimited data, and while they are lobbying to make more airwaves available, it seems like another solution needs to be found. Technology companies, from app developers to hardware makers, may end up paying the cost of data use. If this happens, be prepared for huge changes in the mobile computing and smartphone landscape. What will these changes look like? Are they even necessary? Who knows. What do you think?
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