Only a carrier could trumpet $500 per gigabyte as a price cut

AT&T has lowered its data price premium for poor, prepaid users from 500 times to 50 times what regular folks pay -- how nice

AT&T announced today that it was cutting the price of data access for prepaid customers -- those who don't sign contracts but instead pay as they go -- to $5 for 10MB of data access on select smartphones, a major cut from the previous $5 for 1MB. But press reports haven't done their math: The costs are 50 times what so-called postpaid customers -- those who sign a contract and get a bill each month -- are charged. An AT&T GoPhone customer pays $500 per gigabyte of data usage, whereas a postpaid Android or iPhone user pays $10 per gigabyte.

Of course, there are other plans: One costs $150 per gigabyte if you buy 100MB increments (15 times what regular customers pay), and the other costs "only" $50 per gigabyte if you buy 500MB increments (5 times over the regular customer cost). Such a deal!

Even pay-as-you-go iPad users pay $10 per gigabyte, so the shocking price difference can't be attributed to the prepaid business model's costs versus the postpaid model's costs. After all, AT&T, Verizon Wireless, and Sprint have 3G data pricing that's all over the map for the same amount of data, even with each carrier's suite of plans. The differences just aren't as scandalous as these GoPhone charges.

"There's a lot of talk now about wireless prices potentially going up, [but] here are...examples to suggest otherwise," said Mark Siegel, an AT&T spokesman, in announcing the cuts, according to Computerworld. Presumably he said this with a straight face, as AT&T and the other carriers years ago perfected the art of earnest customer screwovers.

No doubt this price decrease is meant to show how AT&T really won't raise prices if it gets federal permission to buy T-Mobile and that consolidating the U.S. mobile market into two and a half carriers rather than two and two halves will bolster competition. Oligarchies are good for the marketplace, don't you know?

What's sad is that products like the GoPhone target the poor and those living paycheck to paycheck. Because they can't commit to two-year contracts, they pay a lot more for the services than their better-off counterparts. Telecom is hardly the only example of that; banking and credit are other critical areas of daily life where the poor pay more to get less.

I suppose the fact that GoPhone customers will pay only 50 times more than better-off customers, rather than the previous 500 times poverty premium, is a good thing. So why does it feel so icky? (Because it is.)

This story, "Only a carrier could trumpet $500 per gigabyte as a price cut," was originally published at InfoWorld.com. Get the first word on what the important tech news really means with the InfoWorld Tech Watch blog. For the latest developments in business technology news, follow InfoWorld.com on Twitter.

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