Unrestricting iPhone Data Use – The Moral Conundrum

Apple imposes limitations on data use over 3G. No Skype. You cannot download anything over 10MB in iTunes. Can’t get an app over 10mb either. I understand AT&T is concerned about the reliability of their network, afraid of millions of iPhone users streaming movies and pulling down speed. However, no such limitations are imposed on other handsets. Blackberrys and WinMo phones are free to do as they please.

So why the difference? It’s easy to consume lots of data with an iPhone. With nine million on the AT&T network, they fear a complete meltdown if everyone used lots of bandwidth at once. The AT&T phone network, like every network, is designed with a certain “maximum capacity” in mind. It just couldn’t support every user at once. The data network is no different. If all iPhone users consumed every byte of their 5 gigabyte monthly limit, the network would have to pass 43 petabytes each month.

If we make the (erroneous) assumption that all this traffic is spread evenly over all geographic locations and hours of the day, every single tower would have to spit out a constant 16 Mbps stream, 24 hours a day. In the real world we know that towers will experience significantly higher traffic in densely populated areas and especially during peak hours. That’s not even accounting for handling calls at the same time.

Of course, AT&T knows that not everyone will use that much data. In fact, the average iPhone user only consumes 400MB of data per month, or about 1/12th their allotment. Users of other smartphones only use 30-40MB per month, or 1/24th of their 5GB plan.

And now- The Moral Conundrum: If you are paying for 5 gigs of data, shouldn’t you be able to consume all of those 5 gigs any way you want?

I am a heavy data user. I often stream music and radio over 3G in the car (both are allowed by Apple and AT&T). My iPhone is jailbroken and I’ve disabled the download limits imposed on podcasts and app downloads. I can also make Skype calls over 3G and watch YouTube clips at a resolution normally reserved for WiFi. I can also tether, which means I can connect to the internet with my phone’s data plan. I am a very, very bad boy as far as AT&T is concerned. With all of my extracurricular data use, last month I pulled 1.5Gb to my iPhone. Still, my hog-ish habits are consuming only 30% of the available 5GB.

I am using 375% more data than the average iPhone user and 3,750% more than other smartphone users. Further, I am breaking the rules of the network to get it. The 10MB download caps are in place to prevent people like me from degrading the experience for other users. I am essentially stealing bandwidth from users who play by the rules. Yet, I’ve paid for that data. Like your neighbor bittorrenting movies and slowing down the cable internet for the whole neighborhood, my 50MB podcast download over 3G takes away resources for everyone else on the same tower (users who, most likely, just want to check their email and get directions). Yet, I paid for my data just like your neighbor, and just like you. We simply use it more.

The failure is with the data providers, who sell everyone more bandwidth than they could ever possibly deliver. They know that some users will check email once a day, using a no more than few kilobytes, and others will stream video, upload pictures and otherwise max out the capabilities of their device. The light users, paying $30/month and using almost nothing, are subsidizing the cost of the heavy users who pay the same price and take significantly more. Imagine a grocery store that charges $100 to enter the door but every item inside is free. This would be a great bargain for a family of eight, and a horrible rip-off for the single guy who only wants a cup of ramen noodles. The store, meanwhile, continues to make money as long as they can sell $0.05 items for $100.00.

In the real world, of course, the ramen guy would choose to shop elsewhere and the store would quickly go out of business. In the world of cellphone providers, sadly, there just aren’t any other stores. AT&T won’t allow you to pay for only what you use. The problem is the increasing trend in data usage across the board. According to this study, data use is expected to rise at least 2X each year for the next five years.

In other words, all the shoppers are getting hungrier. Today’s hogs are tomorrows normal users. How can AT&T keep up with the exponentially rising data use from increasingly demanding mobile platforms? The one-size-fits-all model will simply fall apart. As people become more sophisticated in their consumption, they demand more and more bits. The shelves in our hypothetical grocery store will be raided by ordinary people with rising needs. This effect can be seen today, as thousands of people descend on sporting events or conferences, all expecting their phones to work as expected, and the network slows to a crawl. The business model doesn’t work for the grocery store because shoppers would either go elsewhere or take as much food as they can carry. It won’t work for AT&T for the exact came reason. There isn’t any competition, but in the very near future everyone will be using as much data as I am, and that demand will continue to grow without limit.

What AT&T needs to do, if they expect to provide all of their customers with a satisfactory experience, is turn that model on it’s head. Heavy users, like me, should be paying much more than ordinary users. In this way, the needs of the heaviest users will subsidize the development of more advanced network technology and bandwidth, which benefits everyone. Instead of ignoring the fact that the network is insufficient and slow for everyone, and cramping the needs of advanced users by trying to limit it’s use, AT&T should simply charge those heavy users more. Enthusiasts, those with the need to consume more data, are the ones willing to pay for the privilege of faster or unrestricted access. In the same way that, for example, photography enthusiasts pay a premium for cameras with cutting edge technolog, the money they spend on fancy cameras pushes the state of the art and those advanced features eventually appear in much cheaper cameras which appeal to average consumers.

Let the hogs bankroll the next generation cell networks so that regular users can reap the benefits of the hog’s addiction to the latest and greatest, the best and the fastest. I would gladly pay more for access to the bleeding edge, while more sensible people can pay less for only what they need.

Until then, I’ll continue to use as much data as I want, data that I have paid for. I don’t want my use of the network to degrade anyone else’s experience, but AT&T shouldn’t sell what they don’t have. Charging more money for more use is the only sensible solution. Not only would that reduce the strain on today’s network by eliminating needless waste and overconsumption, but it would also pay for the development of future technology, a benefit to all.