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Why I Disagree With Gruber : AT&T’s Price Changes Suck

Posted: June 3rd, 2010 | Author: | Filed under: android, Companies, iPhone | Tags: , , , | 1 Comment »

First, let me get the link to Gruber out of the way : good and bad regarding at&t data plans.  I read his post, I disagreed with AT&T’s price changes, and after reading it, I still disagree with the changes.  They are all bad.  First AT&T announces that they are upping their cancellation fee to $375 from $175, which was bad, but understandable given the percentage of their customers buying the iPhone.  Then they announce this garbage.  My biggest issue with it isn’t that they are charging for it, it is the way they did it.  They took a device that we all love for its simplicity and tied it to a maze of complicated data + text + voice plans.

Remember, when the first iPhone launched, there was just the iPhone plan, and the only choices that customers had to make was how much extra to pay for SMS, which sucked but at least it was understandable.  Now, trying to explain to regular people what will happen if they buy the iPhone HD is nearly impossible.  When I told my wife about it, not technical, she said, “but wait, it was supposed to be unlimited.”  It doesn’t matter if the cap is high, as soon as people know there is a cap, they will change their behavior.  They will start to think, maybe I should wait to look up this site until I get into Wi-Fi, or maybe I shouldn’t watch this YouTube video, or how many kilobytes per second is the streaming on this h.264 video, all way too complicated.

Going from bad to worse, we were on the verge of a new age for the internet with plentiful, high speed data everywhere.  We were going to start seeing a new class of always connected applications, able to provide real-time data.  Consumers are likely to start self-restricting their mobile data use unless they are on the few and far-between Wi-Fi hot spots.

There is a class of argument along the lines that AT&T was drowning with the amount of data its consumers were using and that no carrier could keep up with providing quality service for the prices they were charging. I can buy that, but the solution is simple, instead of complicating everything, increasing ETFs, and other stuff that is hard to understand for most people, just raise the price of the iPhone plan to $99.99 and give unlimited everything.

Contrast this to T-Mobile, who recently re-iterated that their unlimited was really unlimited.  One could argue that they have fewer customers and can afford to have more aggressive pricing.  That is true, however to the end user, unlimited is unlimited.  Unlimited is better than limited.  It is simple to understand.  I am very glad that I bought a Wi-Fi only iPad, or I’d feel like a sucker who got baited and switched after Steve Jobs got on stage and announced a “breakthrough” data plan for the iPad.  A 2 GB capped plan is not breakthrough, it is hobbled.  The iPad is designed to watch video, stream audio and in general consume the hell out of bandwidth intensive content.

Basically I’m glad I terminated my AT&T contract when I did.  My iPhone 3GS makes an awesome iPod, my iPad can take its place, I will be able to use my Nexus One for tethering when Froyo comes out if T-Mobile does what I expect and make it free.  AT&T’s crap makes the next generation iPhone look less attractive, since after all, the shine wears off on any new technical gadget, no matter how wonderful, but you are stuck with the crap contract.  T-Mobile also one-ups AT&T by offering attractive no-contract rates if you want to just buy your phone outright.  When the Nexus Two, or the dual-core Snapdragon HTC Scorpion or whatever comes out, I can just save up the money, buy the phone, slap in my SIM card and away I go, I don’t have to wait for 2 years.

The cell phone industry ought to be ashamed of itself for what it is doing.  Even with crappier cell service, which is getting better, T-Mobile is a far better carrier than AT&T.  At least they don’t bait-and-switch their customers and partners with half-truths and complicated one-off deals.  If this doesn’t make people look around for an alternative carrier to AT&T I don’t know what will.  You can get overpriced, horrible service, not be able to make calls, not be able to use the data you are paying for, not be able to get out of your contract for a fortune, and still have to pay large amounts each month for garbage service.  What happened to the model where the business didn’t take their customers for granted, where they actually did things to be better than their competition?  Why are we stuck in the US with carriers who just want to squeeze their customers for every penny while providing as little service as possible.  I don’t understand what is good about AT&T’s price changes, and I hope they don’t set a precedent for other carriers.  If so we may find ourselves, in this country, at the far back of the line as far as wireless connectivity goes.


  • http://Website svlawgeek

    Here’s the flip side: both my wife and I use less than 200 mb of data on our iPhones per month. These new plans will save us money without changing our behavior at all. Why should we have to subsidize the heavy mobile users when we are within a wifi network 85% of the time already? I’m all for these plans. I think it’s only fair for heavy users to pay as they go and for lighter users to get a break.