Is usage based pricing in the future for iPhone users?

December 10, 2009

According to an Associated Press report, AT&T, exclusive provider of Apple’s iPhone in the United States is looking to reign in use considered excessive by smart phone users on the company’s network. The industry standard for “unlimited” data plans is 5GB per month, which is what AT&T caps their plans at.

The Associated press quotred AT&T’s head of consumer services, Ralph de la Vega:

Only 3 percent of "smart" phone users are consuming 40 percent of the network capacity, de la Vega said, adding that the most high-bandwidth activity is video and audio streaming. Several applications on the iPhone provide nonstop Internet radio.

"We need to educate the customer ... We've got to get them to understand what represents a megabyte of data," de la Vega said. "We're improving all our systems to let consumers get real-time information on their data usage."

While the company has been upgrading its wireless infrastructure in an attempt to keep up with demand, consumer usage often outstrips capacity, leading to slow or even dropped connections.

Though details were not provided, de la Vega indicated some incentive to "reduce or modify their usage" will be offered to the small percentage of users consuming nearly half of network capacity. Whether the “incentive” will be a carrot or a stick is now the question for those of us connecting through our iPhones and similar mobile devices. Hints are we will see usage based pricing, which depending on one’s bandwidth diet may bring a drop, rather than an increase in monthly fees.

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