AT&T Considers Raising Fees for Data Gluttons
AT&T Mobility CEO Ralph de la Vega said the carrier is considering "pricing options," which could be affected by whatever rules come from the Federal Communications Commission as it weighs net neutrality. The FCC voted Thursday to formally open a rulemaking process and receive comments on creating net neutrality rules.
The proposed rules would allow Web users to run legal applications and access legal Web sites of their choice, while prohibiting broadband providers such as AT&T from selectively blocking or slowing content.
As the FCC hears comments and weighs what to do, AT&T's considerations of ways to deal with extreme bandwidth users are "all in flux," de la Vega told analysts in a third quarter conference call today. "But we will come up with ways that mitigate the [network] impact we've seen by a small number of customers who are driving inordinate usage."
De la Vega said AT&T has been "experimenting with focus groups to figure out how to handle that [issue] of how to get that small percentage [of users] to carry their weight, if you will, without imposing on others in a way that's detrimental."
AT&T has seen a "data explosion like we've never seen ... and a lot is driven by a small percentage of customers," de la Vega said.
AT&T has received pointed criticism from iPhone customers who questioned why the carrier could not activate Multimedia Messaging Services on the iPhone when carriers around the world were able to do so.
But de la Vega defended AT&T's efforts to expand its network to accommodate data growth such as MMS, and laid out a roadmap of when HSPA 7.2 services will be turned on this year, adding that market trials for the the faster LTE wireless technology (long term evolution) will begin next year, with rollouts in 2011. He also suggested that AT&T's exclusive deal as the wireless carrier for the iPhone in the U.S. could end.
Even with all that investment in faster networks, however, AT&T faces heavy use by a small group of users, de la Vega noted, something he first elaborated on in a keynote address in late September at the International CTIA conference. At that event, he said just 3% of AT&T smartphone customers use 40% of all smartphone data, and that they consume 13 times the data of the average smartphone customer and make up less than 1% of AT&T's total postpaid customer base.
De la Vega didn't divulge details of how AT&T will address that small percentage of users, but said the public will be hearing "something from us in the near future."
The imposition of fees for extreme data usage might be the only recourse AT&T or carriers have, since the proposed FCC rules seem to prohibit throttling down bandwidth to any customer.
Jack Gold, an analyst at J. Gold Associates, said the carriers have a legitimate issue in considering an "overage charge," for users who surpass a certain number of gigabytes of data per month.
"People will complain about an overage charge," Gold said. "I guarantee complaints, but there's no other way to deal with it short of building out more networks to give people the bandwidth they crave. There really are bandwidth hogs. You have 5% of the users taking up 90% of the bandwidth sometimes."
Gold said he agrees with net neutrality rules that allow users to reach any Web site on the Internet, but argued that carriers can't provide unlimited bandwidth to all users. Doing so "means everybody else is limited ... The AT&Ts and Verizons have a legitimate point."