Ideally, consumers welcome choice. But die-hard mobile data users, business users, enthusiasts and a large chunk of consumers who have previously enjoyed unlimited data are left out in the cold. For them, choice simply doesn't exist, facing either a monopoly of one carrier or going without service at all. Put simply, mobile broadband in the U.S. still sucks!
BLAME AT&T, THANK APPLE
Smartphones were around long before Apple released it's iPhone. What Apple in reality did was put the spotlight on wireless data, fueled by wide consumer adoption of a handheld gadget that was up until then just a niche product for tech-savvy enthusiasts. I enjoyed unlimited data on my first iPaq smartphone as far back as 2004, but that enjoyment multiplied by the tens of millions ultimately put a strain on AT&T's 2G/3G network. With no way to easily increase bandwidth and in need of easing the strain, AT&T was forced to eliminate the all-you-can-eat mobile internet buffet and cap users at a paltry 2GB. Those exceeding the cap would now face exorbitant overage charges, and if repeated, have their service terminated.
This of course didn't go down well with users. Nobody I know likes paying triple-digit overage charges, and many users were quick to highlight the fact that they were now getting less, despite paying the same. For those impacted by the senseless data cap, it meant either jumping ship to a different carrier or keeping their existing plan in the hopes of being grandfathered in. That last option made all the more difficult when adding a line or upgrading a phone, as making ANY change to the account would kick in the new terms and conditions, in effect cancelling all previous benefits.
For users accustomed to tethering with their notebook on a daily basis, the impact was most severe. PC data use can trump smartphone consumption by as much as 100x, depending heavily on the activity being done. When you understand that notebooks are far more capable data devices given their more powerful processors and graphics capabilities, it wasn't surprising to see some users hit their monthly data cap in a matter of days. Even relatively light use would require a close watch on data consumption in order to avoid an overage charge, bandwidth throttling or service outage.
MOBILE HOTSPOT = EXPENSIVE PAPER WEIGHT
The situation was not much better for notebook users hoping to see some sensible plans paired with newer USB modems and mobile hotspots. Given their specific use with PC's, carriers failed to let these devices operate to their full potential, severely constricting them with data caps as low as 5GB. While perfectly capable of streaming video and music for hours on a single charge, effective use was left to the occasional web surfing session with email. Doing anything more data-demanding for even just a few hours would bring the user right up to their data cap, making any practical use of their hotspot investment impossible.
Newer 4G hotspots were somewhat more promising, offering speeds comparable to DSL alongside unlimited bandwidth not available to 3G users. Unfortunately, coverage was sporadic, and by the time service did reach major cities, carriers either eliminated unlimited 4G, jacked up prices, or in the case of Rover prepaid, ended up merging with a larger operator.
|Image credit: Sprint|
CONSUMER DEMAND IS IRRELEVANT
Virgin Mobile made a big splash when they announced their $40 prepaid unlimited 3G service, and I was quick to jump on board. Yet despite strong demand, Virgin Mobile lost me as a customer when they decided to impose a 5GB data cap, in effect truncating an attractive service. In a similar fashion, AT&T argued that very few users exceed 2GB of data per month. What AT&T failed to address, however, was how many users require more than that for notebook use and tethering. Mobile road warriors and professionals that travel with a notebook on a daily basis depend on an always-on connection. Users are sick of counting geebees, hate paying overage charges, and want to use their devices as they were intended. What the paying customer doesn't want is some corporate fat cat telling them what they can and cannot do with their hardware purchase.
The explosion of slate hardware has also failed to spur carriers into offering competition and choice for the consumer. Yet as more and more data-capable devices come into the hands of consumers, the greater the demand will be for wireless data access. Offloading demand to wifi hotspots is merely a stopgap solution - people want mobility, and being tied to a fixed wifi location defeats that purpose.
HIDE YOUR WALLET
Reports have shown that the U.S. is the most expensive of all the 4G global markets. Verizon Wireless unashamedly charges $80/month for a measly 10GB of LTE service. That's quite the price premium, considering that operators in Europe and Asia are able to offer the same LTE service for as low as $2/GB. Why are users in the U.S. required to pay so much? The answer is simple - corporate greed.
More recently, Verizon Wireless announced it would double data caps for users purchasing 4G LTE equipment. I'll admit 20GB is better than 10GB, but it is still a far cry for the price, and requires a full 2-year commitment. Interested in buying a newer 4G smartphone? Carriers will cheerfully charge you a premium data fee of $10/month, just because they can. Want to use your smartphone's mobile hotspot feature? Tack on another $30/month... and enjoy all of 5GB for your tethering!
Think you can take your chances going past your data cap? At $10/GB, you'll end up paying an eye-popping $100 in overage charges alone using 30GB on Verizon's 4G LTE, and that's on top of the $80 regular monthly fee. 30GB may sound like a lot, but for those who enjoy Hulu, Netflix, and a few minutes each day on FarmVille, that 30GB is a very typical amount a user tethering with a notebook will consume each month. And that's assuming big red happily takes your $180 month-after-month, and doesn't cancel your wireless contract with the excuse that you have repeatedly exceeded your data cap. Raise your hand if you can afford $180/month for a decent 4G experience? I know I can't.
SOLUTIONS FOR A WEB-CONNECTED MOBILE TECH FUTURE
It doesn't take an expert to see that every kind of mobile tech gadget sold today (smartphone, netbook, notebook, tablet, mobile hotspot) comes with tethering capabilities standard fare. People WANT to be connected all the time, regardless of what they are doing or where they may be with their device - that is the true essence of mobile tech. People want to take advantage of EVERYTHING today's technology allows, and enjoy ALL the capabilities their mobile device offers.
For far too long, carriers have ripped off consumers with overpriced service offerings and pathetic bandwidth allowances. Yet across Europe and Asia, users there are today enjoying faster service at cheaper prices. U.S. carriers are being overtaken at such a rapid pace that the standard of living Americans have come to enjoy may actually fall behind that of other developed countries. Can the U.S. risk being second in a service sector it has always dominated?
I believe that for mobile broadband to have a future in the U.S. carriers will need to do three key things. Firstly, carriers have to end the practice of imposing data caps. Nobody wants to spend $200-plus on the latest smartphone, only to get a week's worth of fun out of their data allowance. Open up the pipes, let people enjoy their devices the way they were intended without choking users for the remaining three weeks of the month. Folks want to HAVE FUN, not count geebees all the time!
Second, consumers need to have the option of an unlimited data plan if that is what they need. Enthusiasts, professionals and mobile road warriors who travel with a notebook daily require a solution that lets them get their work done. Yet even for businesses, $180/month can be a pill that is just too big to swallow. Research has shown that 1 in 5 workers today get their work done outside of the office. It doesn't matter if they are sitting at a coffee shop or working from home, a fast, wireless mobile broadband solution opens up new ways for people to work and communicate. Ditch the cubicle and cut that cord!
Third, carriers will need to embrace tethering, not condemn it. Mobile hotspots combine the freedom of wifi without being tied to finding a location. The ability to also share that connection with multiple devices and users makes them even more attractive and functional. Many users don't even need to carry a separate mobile hotspot device, as software brings this useful feature to smartphone hardware standard. Indeed, a good smartphone+netbook with tethering capabilities opens up opportunities to be productive like never before!
How can carriers achieve these three targets? Speed-based pricing is one potential solution, as shown by WiMax carrier Clear. Much the same way as wired home internet is priced today, paying for unlimited 4G based on your connection speed is a smart move by carriers. It allows folks even on a budget to enjoy wireless freedom, while serious users can pony up more for the carrier's fastest speeds. Clear is in a unique position today as being the only carrier in the U.S. to offer speed-based 4G pricing, and I for one truly hope that more carriers follow suit in 2012.
I'll be honest, I WANT unlimited mobile broadband, and I hate the current situation carriers have created in the U.S. I would be first in line to ditch my antiquated DSL service for fast 4G. Yet I feel the future of mobile broadband, and the widespread adoption of having "internet everywhere", is at stake even as I write this.
Please, Sprint, T-Mobile, AT&T and Verizon; give Americans competition, and make the dream of having internet everywhere finally affordable. Better still, show me something that will make me a customer for life.