Saturday, December 26, 2009

Fighting For The Connected World

It seems like end users and service providers have had near-constant tension as mobile Internet technology has come to the forefront of the business. The iPhone launched to mega-hype and mega-anticipation, with users lined up 'round the block on launch day. Although it *does* seem like the lines are getting shorter with each new iteration. But AT&T has been putting out increasingly aggressive language relating to a 5GB monthly data traffic limitation on iPhone data plans. This limitation has been in place for some time on their USB and hardware integrated data devices. And while 5GB is no small amount of data, the simple fact is that this world is becoming increasingly expectant of data basically anywhere and everywhere people go. Likewise, Verizon Wireless has issued a statement that it is raising it's ETF (Early Termination Fee), the fee a customer must pay to break service before said customer has completed a previously agreed contract commitment, usually two years, and who purchases a so-called "advanced" device with them.

AT&T's efforts to limit data usage are nothing new, except in now applying it to iPhone users. It seems that the various apps available for the iPhone has encouraged a small but significant population to vastly exceed that 5GB limit, and that, according to AT&T, is what led to the limitation, which it (along with the other four nationwide, and most of the regional and/or virtual network operators like Cricket, US Cellular, and so on) already had in place for other devices and plans. However, I should point out that net books and other portable PC's with either integrated or add-on devices (i.e. USB and ExpressCard data cards) could just as easily outdistance this, to me, arbitrary limit, and do so even more easily than the iPhone. Increasingly, netbooks and similar laptop PC's are coming with integrated microphones, speakers, and even Web cameras, all inviting greater and more frequent mobile communications right through the PC's own Internet connection.

Sprint has been noted for already refusing to match Verizon's ETF increase. Another note is that, as "4G" Wimax service is launched in various cities, the Wimax service plan is quite explicit in announcing that this service is unlimited. It's even quite clear in pointing out that, where a device is also capable of 3G data service (via Sprint's EV-DO/Cellular network), the 3G remains with a 5GB monthly cap. In fact, Wimax just launched in my area, Chicago. I'm tempted to sign up and try it out.

I'm curious to see how long the unlimited option on Wimax will hold. There is some uncertainty among industry experts whether people will purchase that plan. Of particular note is that Wimax is basically an independent wireless service designed to be data-only, although rumors persist that Wimax phones are on the way. I'm not clear whether that refers to Sprint cell phones with an extra radio for Wimax access, or if the phones will oeprate exclusively on Wimax where available.

What is clear, however, is that cellular providers do not view their networks as capable of supporting the kind of mobile usage that netbooks and increasingly sophisticated smartphones seem to be bringing end users to expect. Unless and until such tension between service providers and service users is relieved in some fashion, I suspect the mobile data industry is headed for a period of stagnation. Users aren't likely to widely adopt what they perceive to be an unsatisfactorily limited data service, and carriers seem unwilling to engage in the kinds of network infrastructure that would be able to support such a demand. Let's not forget, either, that many communities remain in NIMBY mode when it comes to permitting carriers to carry out that infrastructure work.

In the end, it's not a simple case of blaming carriers *or* end users. Blame, even if properly assigned, isn't going to resolve this tension. So an answer is the right direction to take. Perhaps that answer lies in the extended service range of a service like Wimax. Perhaps it lies in higher bandwidth cellular options like LTE or (the virtually dead) EV-DV. Perhaps another wireless technology is waiting in the wings somewhere. Or, more likely in my opinion, users and carriers need to work together to match expectations with technologies. Because, I suspect, there is a fairly vast void between the two right now, and the carriers have found themselves on the wrong side of those expectations. Regardless if why that is so, it is in carriers' own best interests to work with customers, rather than implementing punitive policies like Verizon's new ETF (which, by the way, is drawing FCC ire).


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