There has been a lot of discussion about yesterday’s announcement from AT&T of new smartphone pricing plans that apply to a range of devices, including the iPhone and iPad. They are eliminating the unlimited data plans they used to offer, in favor of tiered pricing and finally allowing customers to use the tethering feature added to the iPhone last summer. Reactions have been mixed, but nearly everyone has their nose out of shape about the additional charge for tethering. I think most of them are wrong.
John Gruber of DaringFireball.net is a good exemplar of the critics. Gruber reacted to an interview with AT&T VP Mark Collins on GigaOhm:
GigaOM: What about the $20 tethering fee? It looks like a convenience charge.
Collins: That capability is enabling something you can’t do today. You can use one device and get multiple connections so it’s more useful to you. You’re going to use more data so the price is based on the value that will be delivered.
Gruber’s response is typical of most of the bitching about this move:
(Emphasis added.) This would be true if the data plan were still “unlimited”, but it’s not. You’re already paying for a capped amount of bandwidth — 2 GB — and what you consume via tethering counts toward that cap. You’re using the same amount of data but in a different way. And if you go over your cap, you’ll be charged the $10 overage fee for each additional gigabyte. There is no excuse for this $20 tethering charge other than greed.
I don’t like mobile carriers, and I generally don’t like their approach to pricing, but I don’t think Gruber and those of like mind are really thinking this through.
Its hard to imagine that someone using tethering isn’t going to use more data. I’m already using significantly more cellular data on my iPad than I was on my iPhone because the device itself is faster, because I can go through web pages faster because I can see more at once, and because I often opt for the richer desktop versions of sites on the iPad, rather than the mobile versions I use on the iPhone. If I were using my laptop to access the Internet over my iPhone via tethering with any frequency, I expect I’d be using even more. So, even if I’d still be using less than the 2GB limit on a $25/month iPhone data plan, I’d still be using significantly more than I would with my phone alone, and so would most other users of tethering, which would increase AT&Ts costs.
Gruber, like most others, focuses on the extreme case of the 2GB limit on the data plan, but tiered pricing plans are built on averages, and tethering is sure to shift the averages. If they honestly believe that a tethering user isn’t going to place significantly more load on the network than an ordinary iPhone user, then it seems like the fair thing would be to add more pricing tiers, or better still, a fixed price per monthly GB. How does $10/GB, which is their charge for anyone who uses over 2GB/month, sound? I also like the idea of a rollover plan like they have for voice minutes.