In an article in the Wall Street Journal yesterday, AT&T Mobility CEO Ralph de la Vega talked about the crappy 3G coverage in key areas such as New York and San Francisco, which he admitted are “performing at levels below our standards.”

According to de la Vega, the good news is AT&T is working on it. I don’t know if we should hold our breath on this because AT&T has been working on this issue for over a year now…

What I found more interesting in this WSJ article is the fact that AT&T might start charging iPhone users on a per-byte basis, as I kinda predicted in an article last month:

With about 3% of smart-phone customers driving 40% of data traffic, AT&T is considering incentives to keep those subscribers from hampering the experience for everyone else, he said. “You can rest assured that we’re very sure we can address it in a way that’s consistent with net-neutrality and FCC regulations.”

Many customers don’t know how much bandwidth they’re consuming, Mr. de la Vega added. When AT&T conducted a broadband test, customers often reduced their data use. Longer-term, he said, a pricing scheme based on usage is likely, though it will be determined by industry competition and regulatory guidelines.

This news comes at the right time as I was going to write an article on how I think it would make sense for AT&T to charge per usage.

As the WSJ says, 3% of users are responsible for 40% of the Internet consumption and it’s not fair for a “little user” to pay the same price as a “power user”.

I came to this conclusion as I am traveling around the world and using pay-as-you-go plans. I realized that I don’t nearly use as much data (aka Internet) on my iPhone as I thought I did. On a pay-as-you-go plan, if I use less, I pay less, which makes sense.

In short, I think it’s a good idea because it benefits me. But what about you? Does such a pricing scheme would benefit you? Are you willing to be charged on a pay-per-byte model?

  • Sam

    Of course!! As if me paying almost 200 a month for a cell phone bill is not enough as it is. AT&T does this I will switch carriers for sure along with most people I have discussed this with. Greedy Greedy.

  • @Sam: Same here. I’ve been considering switching to Verizon anyway.

  • Ruby

    Seems like it would be a good idea. I worry for those using Internet tethering. Ouch!!

  • Gale

    I agree, how fair is that to start charging AFTER we are committed to a 2 yr. Contract w a t & t???? Comcast, verizon etc. ….start listening & planning….buy out my contract, hook up my iPhone and I’ll switch!!

  • Alex

    if this was the case, they would need to have an option put into the iphone to disable all data traffic unless on wifi so that we can toggle it to not accidentally access and get charged…

  • Steve

    If they changed this model, which is within their rights of the contract all of us AT&T customers signed, they have to give us a significant notice and an option to leave the contract if not acceptable.

    We are protected in that they cannot automatically change how they bill us for their services and require a buyout of remaining contract months.

    Notice it stated:

    “Longer-term, he said, a pricing scheme based on usage is likely, though it will be determined by industry competition and regulatory guidelines.”

    How many competitors are going to switch to a pay-per-byte model? My guess is not many or likely. If that became a standard, most users would drop back to regular cell usage and WiFi only.

  • D.

    Ideally, I would agree with you except that this is AT&T. I pay $20/mo for a data plan for my 2G iPhone. I don’t use it much because I work out of the home and have WiFi. So ideally, I would love to see a reduction based on usage. However, I suspect they’d start me at $20 and charge up from there. $30/mo and up for you 3GS users. I do not believe for a second that they’d only charge for access and eliminate the base price. Therefore, I am strongly against this.

  • According to legal standards, a change like that would be enough to let anyone that wanted to get out of their contract out of it. I’d think about doing that…

  • Zay

    This move in my opinion would be detrimental to the financial well being of AT&T. I have been with AT&T for about 6 years and this move would be enough to rid me of there network. With all the fuss about there less then par network and dropped call, not to mention very poor customer service this would not be a good look for them. To go from insulting verizon about the fact that they restrict their customers to actually restricting their own customers. Unfortunatly I AM a bandwidth hog. I use music streaming apps and all day and use up to 2.5 gigs a month. Take into consideration that I purchased the iPhone for this very reason taking unlimited data from me would make me think twice about my loyalty to AT&T. Another question I pose is where does the restriction end. Will they do this for all smart phone plans, be it palm pre or blackberry phones, or will the loyal iPhone owners be singled out on this one. My iPhone is the center of much of my online use and without unlimited data I will not stay.

  • Zay

    Also if you take into consideration apples recent purchase of lala, which would store music online for cloud streaming. Keyword streaming. AT&T removing unlimited data would not be in apples best interests. Do you think for one second apple would alllow AT&T to get in the way of any of their money making schemes. Hells no. And if it’s bad for apple then it’s bad for AT&T. I highly doubt AT&T wants to loose there #1 phone. And also the possibility of seeing a mass exodus of it’s customer base flee for the nearest carrier to offer the iPhone.

  • Dylan

    verizon is very reliable. I believe u can get an inexspensive ulimited data plan on a sim card and use that for your iPhone; if it’s unlocked anyway.

    P.S. I hav verizon. 3G is fast and all over.

  • Dylan


    AT@T has also had some core codes currupted in some of their servers and such, whitch wud contribute to y the have been working on the 3G issue so long.

  • Megalomaniac

    I have a 3Gs and I use it constantly I use the Internet everywhere I got and I even have wifi at home but this will hurt my bank alot if this happens I will look in to verison

  • Caddouch

    Yes I think it is a great idea , paying $30 a month for Internet usage is way too much !

  • I think the idea a good one. I don’t use the internet on my phone very much because coverage sucks. There is no 3G service on my area and it looks like it will be a while before we get it. When traveling around the country 3G is very spotty anyway. With that said I would rather pay for what I use. Then again I am thinking about ditching the iPhone for a Verizon plan anyway.

  • Dreadnutz

    Are you guys sure that the contract does not have a clause that allows changes like this? Most contracts do!

    IMO They may have to do this, as more and more regular phones get traded for smart phones in about 2 years there won’t be anything but data gobbling smart phones, and since the bandwidth from a cell tower is fixed and limited; it’s almost certain that it’s either going to happen at some point. I am not happy about it but that’s the only logical thing that can happen

  • Slevin

    If they do that, I’m switching too! AT&T’s 3g coverage ain’t that good anyways,

  • Old Tom

    we as the consumer and iphone users on at&t pay a flat monthly fee for what at&t calls unlimited data.
    we have no choice as to whether we pay this monthly rate or not due to the fact that we want the iphone. So we suck it up and pay it. As a result, i dont feel the least bit bad using the 3g wide open 24/7 or not. IMHO, its on at&t to solve the data flow issue. Not strap limits on us as consumers as a solution or “condition” our useage by some lame arse bililng structure because they have failed to keep up with what is arguably the #1 smart phone on the market today.
    While i personally am not a huge data user, i do like the flat rate for budgeting purposes. I have the right to use as much or as little of that 3g service and data plan as i see fit solely by my paying my agreed upon bill each month.
    And i think i am 1 of those rare individuals that has great service in my area. 5 bars almost constantly and have yet to have any issues with 3g coverage as well. So my experience with at&t has been good to this point. However, they institute this pay as you go crap . . .. .there will be a trail of fire out the door from me leaving at&t and i wont look back for a second.
    *takes jailbroken iphone to another provider and moves on*

  • It looks like AT&T announced my greatest fear on Wednesday. They will be changing their mobile data plans. I am very dissapointed in AT&T for this change. It would seem that they are trying to spin this as a positive change to those that do not use the internet much. I understand that the Cell Towers only can do so much but this is not our fault as the customer. AT&T’s network is less than perfect when it comes to carrier signal. I can assure AT&T that they will be losing customer…