Why AT&T is right about usage-based pricing for 3G data

iPhone, BlackBerry, and other smartphone users should pay for bandwidth consumed, even after AT&T gets its network up to snuff

It's not that often that I come out in support of AT&T or any cellular carrier, given their predatory business practices and continually honed techniques to trap users into paying more than is appropriate. But AT&T is right to charge smartphone users based on bandwidth consumed, and I hope the other carriers follow suit.

Simply put, unlimited wireless broadband is a bad idea. The capacity of the airwaves is not unlimited, and as mobile devices get more and more desktop PC-like capabilities, such as video streaming and VoIP telephony, bandwidth usage can only soar. Any AT&T user in a major city knows what that leads to: poor connectivity and slow speeds.

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With wireless bandwidth a limited resource, it makes sense to pay on a usage basis, as we do for water, electricity, and gas. Surprisingly, AT&T's new pricing looks reasonable: $15 per month for 200MB of cellular data, with $15 per additional 200MB, or $25 per month for 2GB of cellular data, with $10 per additional 1GB. Of course, if you use only 1K of that additional bandwidth before the month expires, too bad -- you still pay the extra $15 or $10. That should avoid the nasty surprise of overage charges, and we can all be happy that AT&T's pricing is not based on actual usage but instead on baskets of usage (the same way voice minutes are typically assessed).

No one should be surprised by this change, given AT&T's tiered, usage-based pricing scheme for the iPad in late April. Such a pricing scheme is not unique to AT&T; other carriers abroad use it as well. And of course, most broadband providers used tiered pricing on their landline services, though they typically price based on speed rather than bits. It pretty much ends up having the same effect: Those who use more pay more.

Some people are objecting to the end of unlimited 3G data bandwidth, even though we've never really had it; the carriers have all had fine print in their agreements letting them cancel your account for undefined "excessive" usage. But it is a reasonable response to wireless's bandwidth limitations.

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