The rollout of 3G (third-generation) mobile data services in the U.S. looks good so far, but the carriers may be painting themselves into a corner.
To get subscribers to buy the high-speed services and start using them, mobile operators are offering some "unlimited" data plans that allow as much streaming, uploading and downloading as the customer wants in the course of the month -- within certain terms of service. Some uses, such as hosting a Web site, typically aren't allowed.
At least one carrier, Verizon Wireless Inc., is looking the other way when users go wild. Verizon has allowed subscribers to use its BroadbandAccess service for capacity-intensive applications such as streaming TV to their notebooks from Slingbox video distribution devices, even though the terms of service forbid this, Executive Vice President and Chief Technical Officer Dick Lynch said at the CTIA Wireless show in April.
However, he warned the fun won't last forever.
"They work very well today in an environment where the networks are admittedly lightly loaded ... and I'm not only talking about mine, I'm talking about everyone's network," Lynch said. "I think you'll find, over time, that the amount of usage that you demand from the network each month will in fact have to ... drive the pricing structure," he said.
Industry analysts say he's right: After service providers achieve the widespread adoption they've been pushing for and there are more users vying for capacity, the carriers may feel pressure to shut down early adopters' freewheeling ways or even end unlimited plans. That would have implications for business users as well as for content-hungry consumers.
Cingular Wireless Inc. spokesman Ritch Blasi acknowledged there are heavy users of the company's emerging BroadbandConnect high-speed service. Cingular's terms of service say customers can use it for Internet browsing, e-mail and corporate intranet access for using enterprise applications. If users violated those terms, Cingular would contact them and discuss the problem, he said. Abuse of the service could become a bigger issue when mainstream users start to adopt it, Blasi said.
"Those are the early adopters of technology, and there's some of those around, but not a lot. Will that be an issue in the future? I guess that might be," Blasi said.
Sprint Nextel Corp. gives subscribers a wide berth, even selling routers that let users share a connection to the company's Sprint PCS Vision service. Sprint believes it can expand network capacity fast enough to keep up with a growing subscriber base, said Barry Tishgart, director of marketing.
"We're going to keep our policies simple and straightforward and encourage people to go out there and find new uses for broadband," Tishgart said. For example, the company's terms of service don't forbid subscribers from making large file transfers to their PCs. If subscribers have to think about how much data they're using, many will be scared off by 3G, he said. However, there are limits: You can't use a 3G phone as a modem for a PC or run a server on an individual subscriber plan. The carrier offers the Sprint PCS Data Link service for businesses as a substitute for leased-line or Frame Relay service.