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AT&T Makes iPad 3G Lose Its Luster

Apple has made one heckuva product in the iPad. Anyone that I’ve demoed my iPad Wi-Fi simply wants one within a minute of actually using the sleek device. The iPad 3G equips the iPad with 3G wireless internet that was supposed to be unlimited… that is until AT&T killed unlimited data and went with a very limited tiered pricing structure for it’s wireless data.

The AT&T plan:
Charge, charge, charge for data (reminds me of AOL charging for hours)

At the Rate of:

  • $15 a month for 200MB of data dubbed the “DataPlus” plan. Go over 200MB you get charged $15 more for the next 200MB (more like DataRipoff)
  • $25 a month for 2GB of data dubbed the “DataPro” plan. Go over and it’s $10 for every GB extra.
  • Tethering… whoopie Internet tethering… $25 DataPro plan subscribers only… plus $20 extra for tethering, of which… why bother tethering if there’s a 2GB limit.
  • But wait there’s grandfathering for those who currently have the unlimited $30 plan… so no worries, right?! Until your contract expires! (That’ll cause some issues.)

What’s an Apple To Do?
I know it’s popular to bash on Apple, but I feel for them on this. The iPad 3G is nary a month old with $129 premium to get the 3G antenna to access AT&T’s high-speed wireless Internet. It was supposed to be unlimited data plan, and it was strongly sold as such.

With AT&T’s DataPro plan you can forget streaming Netflix, ABC, or downloading feature rich apps like the Wired App which at 527MB would use over 25% of the DataPro plan by itself (more like Semi-Pro). Many will answer, “you should do that over wi-fi anyway.” So why have the 3G then?

This also harkens back to the original iPhone release in 2007 when Apple knocked the price down a couple hundred dollars after mere month’s of being released. With AT&T dumping the unlimited plan a month after iPad’s 3G release, it would be easy to understand if those that bought the iPad 3G had some buyers remorse and sought to return the product. Not having unlimited data on the iPad is just terrible. Wi-fi is now where it’s at.

The Telecom Industry Blinks by ‘Nickel and Diming’ Its Customers.
As someone who’s posted hundreds of hours of videos from major telecom events around the world, I’ve listened to my fair share of telecom CEO opinions. The main key points…

  • They don’t like being just the internet pipeline (what they refer to as the dumb pipe)
  • They want to charge for all the services over that pipe (just providing great, reliable internet service isn’t enough)
  • And the biggie… they’ve never liked flat rate unlimited Internet

I certainly cannot fault them for wanting to get part of the money for services over the internet pipe, but how about creating great services like they have been with Verizon’s FiOS, and AT&T’s U-Verse Internet, TV, and Phone services. They certainly couldn’t charge a per GB price for those services.

Charging for data rates for wireless Internet is a major step back for the wireless industry. Instead of a ubiquitous, always on Internet connection, cellular Internet has just been relegated as a second-class citizen by being banished to what you use in between wi-fi hotspots.

The Internet Data Usage Excuse
AT&T is trying to also weed out its heavy users with these new data plans, but that excuse doesn’t hold water. They simply want to charge for data usage. The cable companies offer unlimited broadband with many having limits of 60-80GB. For customers that go over that, the cable companies can choose to contact customers individually to let them know they should upgrade to a higher usage plan or find another service.

AT&T could have followed the cable companies’ lead and solved the high-data user issue by upgrading high-usage customers to a high-usage tier and implemented a respectable unlimited data cap of 10-15GB… AT&T obviously thinks 2GB is unlimited enough.

AT&T says that 98% of their users use under 2GB. I’m not buying it. If that was the case, why not keep the unlimited plan and charge users $25 with a respectable data cap? It’s much better marketing and increases the positive perception. Also, is AT&T trying to say that 98% of it’s customers need to be restricted and pay up because 2% of customers are bandwidth hogs? Hogwash!

iPhone Impact
When you think about the data packages in regards to just the iPhone, the hedgers out there say something along the lines of, “it’s no so bad…I don’t use more than that a month.” They’re partially right, I don’t use more than 2GB a month either on my iPhone… for now. But I like not having to worry about it and that’s a huge mindset feature for me.

  • There’s going to be a demand for Apple to now implement an ad-blocker for Safari…after all, you don’t want to be charged for those ads you don’t read…do you?
  • 4G/LTE .. who cares about higher speed wireless Internet? “We have the fastest network!” now means “You can reach your data limit in a mere day!”
  • The new iPhone is faster. Great, unless you’re talking bandwidth usage apps. Then, not so great.
  • What, no rollover GBs? I paid for 2GB last month and only used 400MB, rollover GBs will be asked for. It’s a 2 year contract, right? I just want the 48GB I paid for.

iPad 3G Impact
AT&T’s data plan absolutely cripples the iPad 3G wireless component. 3G is what you’ll use in between Wi-Fi locations… all of the bandwidth heavy, feature rich apps the iPad can utilize will now simply be limited to Wi-Fi due to data plan bandwidth limitations.

AT&T’s Preemptive Strike
I think AT&T saw the rise of the ubiquitous, pervasive, wireless Internet with how popular the iPad has become, and the demands the feature rich iPad will place on the network. Instead of supporting it, they aborted it, and badly!

If AT&T, IHMO, is unable to support expanded bandwidth of wireless Internet, nobody else can, and that’s sad as AT&T’s wireless data network is generally more robust than others. It looks like WiMax just got a boost for the future.

Crippling Innovation
Faster computers, larger screens, and broadband Internet have spawned innovation on what we can now accomplish, the flow of information, and the impact and speed of those innovative accomplishments / research has been exponential with a global impact.

The promise of high-speed, wireless Internet, and the new capabilities, innovations, and the technological capabilities that it could produce has just been throttled way down. Instead of becoming THE network of the wireless broadband revolution, AT&T has just saved its core DSL broadband and relegated its cellular service as second-class citizen of Internet use.

AT&T blinked and you can be sure the rest of the telecom industry will follow suit. Again, this is an overall telecom industry attitude to charge for everything. Hopefully, they’ll wise up and put a respectable cap of 10-15GB on the DataPro plan. 2GB is simply a joke.

After all, the telecoms favorite service to charge for is texting.
Why? One of the number one sent text messages in the world… “k”
(that’ll be 10 cents please)

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  • Love my iPad, Apple. But, give me back my $130 you took from me to sell me the 3G version, that I’m never going to use. Never.

    And, please don’t tell me that you don’t have a contract or can’t control what AT&T charges for service on an exclusive product that you build.

    I love you Apple, but you broke my heart.

    Unfortunately, I can’t blame AT&T for wanting to make more money. After all this is a capitalist economy. It is you Apple who will have to live up to your promises. Yes, your promise.

    Don’t think about what (if it) is legal, please think if it is ethical.

    After all, this is a love affair we are talking about. I still love you Apple for the iPad.

    – A sad, soon to be (now may not be) an iMac owner.

  • I think you answered your own question. But like the iPhone it “appears” AT&T is grandfathering those who signed up based on when your account service date started. Sooooo… if it started before the cutoff then you “may” be OK.

    The keyword there is “may”. We won’t see truly what happens until people start reporting on it.

    It still doesn’t change the fact that new customers signing up will be limited to the 2GB DataPlus plan for iPhone or iPad 3G data service.

  • If the iPad data plan is on a no-contract basis how will the grandfathered in unlimited plans be canceled when your contract expires?

  • It only took 6 days after this post for AT&T to flub in regards to the iPad 3G again!!!

    Hot in all the media is that AT&T exposed the e-mail addresses and SIM identifiers to 114,000 iPad 3G users.

    While it’s debatable that e-mail is indeed private info, and it’s how much a hacker could take advantage of SIM identifiers, the info shouldn’t have been available, and AT&T is dulling the iPad 3G’s luster even more.

  • The blasphemous irony is Mr. Netflix appearing on the WWDC stage to advertise the Netflix app for the iPhone. Wow, that will come in useful when you’re watching a movie and can’t finish watching because you’ve exceeded your media rich (and growing) Internet data plan. Thanks for thinking of the future of streaming media and your customers, AT&T! Maybe 98% should drop you for a better and more fulfilling Internet experience than what you offer.

    For you iPad users, much more of the same “too bad.”

  • Excellent post, it is just outrageous how much money consumers are paying for relatively slow and spotty 3G coverage – be it AT&T or Verizon. It was only a matter of time before AT&T threw a cap on the iPhone unlimited data usage. However, in my opinion, 2GB/month is absolutely fine. I have had my usage counter going since day one and it has only just notched up to 6GB down (carried over from original iPhone to 3GS).

    But instituting such a cap to the iPad was certainly uncalled for, especially, as you mentioned, so close to the launch where they boasted the unlimited 29.99 plan (which should have been discounted for current iPhone subscribers in the first place!) The device shines as a way to consume media, and if you can’t do so without fear of ‘data overages’ it really is unfortunate. On the other hand, streaming a netflix movie on the iPad over 3G isn’t really a best in class experience. Video quality is not great, and constant re-buffering is all too common. I’m all for the push to the cloud, but 3G isn’t the way to bring that content to and fro.

    Once the faster networks are rolled out, this will change – and I don’t doubt we consumers will be paying for the extra speed. Let’s just hope the caps are made in accordance with this extra bandwidth.