The wireless data paradox: AT&T asks you to use less data

So let me get this straight: AT&T says iPhone users are using too much data. And to ease the resulting strain on its network, the carrier wants to...(ahem)...encourage its customers to throttle back on YouTube, live-streamed radio, and other media-rich apps. A week after playing the good guy with "Mark the Spot," a handy iPhone app that lets users report on coverage dead zones, AT&T is reversing any goodwill gained by warning heavy users they may soon face extra charges for their data gluttony.

Someone please tell me this is little more than a badly thought-out joke.

Since when does a supposedly progressive-thinking company try to rein in its customers' behavior by asking them to turn back the clock? Last I checked, technology tended to evolve in only one direction, and trying to slow it down or reverse it would be as advisable as attempting to hold back an accelerating space shuttle. Of course, an iPhone isn't cranking out millions of pounds of rocket-fuelled thrust, but the prospect of millions of subscribers peacefully going along with AT&T's grand plan strikes me as risky and ill-advised in its own right.

A failure of its own making

Part of me wants to feel more than a little sorry for AT&T. Its exclusive deal with Apple should have been a coup for the carrier. A couple of years of US market exclusivity for the iPhone should have been more than enough to attract -- and keep -- scads of Apple-loving, subscription-paying smartphone fans who happily lived at the upper end of the average revenue per user (ARPU) curve. The marquee value of being the iPhone's exclusive carrier should have been sufficient to reinforce AT&T's market position in the brutal pecking order of carriers.

But a funny thing happened on the way to smartphone nirvana: AT&T's network proved to be woefully under-built for the iPhone's unprecedented data appetite. So rather than spend what it needed to bolster the nuts and bolts that kept iPhone users connected and happy, the company instead continued to market the heck out of its uber-product -- and in doing so continued to hope that folks wouldn't notice.

Unfortunately for AT&T, they did notice. And as more iPhone users use more data-heavy apps (just what the ads have been telling them to do all along), network reliability continues to plumb the depths and subscriber complaints continue to pour in. The problem, particularly acute in device-dense urban areas, manifested itself most recently in San Francisco this past Friday, when many iPhone users found themselves without Internet connectivity for much of the afternoon. It wasn't the first time this has happened and it likely won't be the last as iPhone mania -- both in terms of new users signing onm and existing users becoming more at one with the device -- shows no signs of abating.

Not entirely in control

Sadly for existing AT&T customers, it doesn't look as if the carrier has much of a handle on the problem. Speaking at a conference last week, CEO and president of AT&T mobility and consumer markets Ralph de la Vega admitted its New York and San Francisco wireless coverage was "below our standards." Jim Cicconi, the company's senior executive vice president of external and legislative affairs, was similarly blunt, in an interview last week with CNET's Marguerite Reardon:

Wireless-data usage is growing far faster than anyone had expected. And if we don't do something soon, we will run out very fast. And then we will have to start telling wireless customers that they can't do all the things they want to do with their devices.

I have to apologize to Mr. Cicconi, who clearly wishes he had had happier news to share, but his position is bogus. Data usage didn't grow faster than anyone -- notably AT&T -- expected. It grew just as quickly as the pundits claimed it would. In fact, we'd be in even worse shape if the economy hadn't tanked and kept even more consumers from diving into the iPhone pool.

It's hard to believe that AT&T couldn't anticipate the wireless data growth curve. It's also rather easy to believe AT&T hoped it would be able to ride the iPhone wave without investing enough in its wireless infrastructure to handle the load. Like the car owner who puts off slapping on winter tires as the cheapskate's way out of preparing for winter, AT&T got caught short when the big blizzard rolled in and it was woefully unprepared.

All of which leaves AT&T in an unenviable position where 3% of its iPhone subscribers account for 40% of total data usage. Does it institute usage caps on these heavy users? Does it throttle them back? Does it charge them through the nose? Perhaps it might consider doing all three. If you want to play the game at a level or two beyond everyone else, after all, perhaps you should be willing to pay extra for the privilege.

History repeats itself

We've been down this road before, of course, with peer-to-peer downloaders running afoul of ISPs' acceptable use policies. In many cases, usage caps, throttling and differential rate plans have quelled the debate, and ensured regular folks can still get stuff done online without their sessions slowing to a crawl. We'll save the net neutrality debate for another day, but clearly the industry needs a way to balance the needs of the heavy-duty users with those who just want to send an e-mail to grandma.

Unfortunately, AT&T exemplifies precisely the kind of strategy the industry doesn't need right now, if ever. You can't sell the heck out of a solution, starve it, and then hope consumers don't complain too loudly. You can't blame the mega-streaming 3% for doing what your ads have been begging them to do since the day you first started selling the device. You can't back away from your own accountability to do everything you can to deliver a quality end-user experience. You can't use differential rate plans before you've ensured your network can first be all that it can be.

And if you try, consumers with long memories will keep that in mind the day you lose exclusivity. Because the first carrier that punishes heavy users in this manner will itself end up punished.

Carmi Levy is a Canadian-based independent technology analyst and journalist still trying to live down his past life leading help desks and managing projects for large financial services organizations. He comments extensively in a wide range of media, and works closely with clients to help them leverage technology and social media tools and processes to drive their business.