AT&T Loses the Future: And That's a Good Thing

A security analyst says that it's not all bad news for AT&T once Verizon gets the iPhone.  After all, there might be a short term gain (because AT&T won't have to subsidize iPhone purchases).  Of course, long term, it would be really bad.

Would a Verizon iPhone Help AT&T?

That's par for the course at AT&T where they always think about short term profits rather than long term viability.  The analyst also predicts there won't be a massive loss in current iPhone subscribers.  Something I believe will quickly prove to be completely wrong.

Is Cell Phone Data Really Like Water?

Dick Lynch, Verizon's chief technology officer, was one of the first to try to say that cell phone customers should be billed according to usage, "just like water and power companies."  AT&T quickly took up the message and ran with it, and now currently charges for data "like water."  Meanwhile, Verizon sits on the sidelines letting AT&T try this new experiment in pissing customers off.  As I've said before, data is not like water, and it's stupid and misleading to try to charge for it in that way.  Which is why no other major companies have followed AT&T off this cliff so far.  (They're offering a low budget tier, but so far none are charging like AT&T per gigabyte.)

But here's an interesting article that talks about cell phone uses, and how big companies can rip people off by supposedly "providing water" service:

What if Cell Phone Data Was Like Water?

AT&T's Good News / Bad News

When is good news for AT&T also bad news?  When they finally start to catch up to Verizon, but it's all because of Apple's iPhone:

Verizon Draws Even With AT&T

AT&T should be jumping with joy; they are finally catching up to Verizon in the number of cell phone subscribers.  The problem is, almost all of AT&T's sales growth for the last few years has been thanks to Apple's iPhone.  And AT&T is about to lose iPhone exclusivity, after spending years doing everything it can to piss off iPhone users.

Verizon's less that thrilling summer shows that the Droid has been almost a total bust as a competitor for the iPhone.  And that's not good news for AT&T, because it means they are more dependent than ever on Apple.  Moreover, it means it's clearly critical that Verizon makes a deal with Apple to get the iPhone, and Apple will be able to demand the best terms.  Not good news for either company.

AT&T iPhone Customers Want Verizon

Almost one in four AT&T iPhone customers would switch to Verizon, sight unseen, if they had the chance according to a new survey.


A Million AT&T Subscribers Want to Switch

I wonder how many people driving Fords would say they will switch to Chevy when they buy their next car?  Or how many people watching a Sony TV would say they want a Panasonic instead?  People are generally resistant to change unless necessary, and also instinctively loyal to whatever they already have even if there are better things in the world.   So AT&T has to be actively pissing off people for them to want to switch.

Just saying…

The End of Phone Service?

The far reaching implications of Apple's FaceTime are just starting to become clear.  Fortune writes about how many FaceTime capable devices Apple will release in the next two quarters:

50 Million FaceTime Devices

That number could double instantly if Apple makes FaceTime available through iChat on all it's camera equipped computers and laptops.  Being an open platform, that could then expand to hundreds of millions if Windows versions come out.  No reason they shouldn't.  And why shouldn't an Android app follow?

So basically, what we're talking about is the end of traditional phone service.  Hmm… AT&T, time to rethink tiered pricing?

Will FaceTime Destroy AT&T?

Here's an excellent piece by Mark Reschke on Steve Jobs' recent presentation and what it could mean for Apple's relationship with AT&T:

iPod Touch is an iPhone Without a Contract

I think Reschke is right that AT&T's move to tiered pricing pissed Steve Jobs off enough that he is now actively plotting against it.  FaceTime could be the ultimate weapon to break teleco's hold on American communication services.

Others have dismissed FaceTime as little more than a new way to Sext.  But sex is a big motivator, especially with young people.  If they start using FaceTime initially to hook up, they might give up traditional phone calls for good.

Virgin Mobile Explodes Death Star (That is, AT&T's Tiered Pricing)

It's been a while since I've posted.  Partially because I've been busy with my book, but mostly, frankly, because news in the mobile world has been pretty grim.  AT&T switched to tiered pricing, kicking already beaten dogs (its iPhone customers).  Meanwhile, Apple shows no signs of kicking AT&T to the pavement and opening up the iPhone.  And finally, Google completely turned traitor and joined with Verizon to try to get rid of the internet and replace it with the paynet.  Frankly, I got a little depressed.

But here's some very good news:

Virgin Mobile Offers Unlimited Broadband Data

Now, I don't use Virgin's service and am not sure I will (at least right now), but it's great to see that one teleco (thanks Sprint) cares more about servicing customers than plotting against them.  And for a lot of people (iPad users?) this deal might make a hell of a lot of sense.

What's even more great about it is that it proves AT&T's PR doublespeak for ripping off customers is totally false.  Telcoms don't have to go to tiered pricing because of greedy "data" hogs.  If that's the case, Virgin couldn't offer this deal.  The facts are that most people buy data plans for more data than they regularly use, but like having steady, dependable fixed billing.  So most of the people that buy into this Virgin deal will probably use no more data than they would have under a tiered pricing deal.  And they'll probably end up paying a little more per-month on average for no contract, but they don't have worry about suddenly being presented with a huge bill they can't pay, just because they had a good month.  And they don't have to worry about being locked into a two year deal.  Freedom has a price, and it's almost always worth paying it.

This wasn't the way things were supposed to go for AT&T.  All the other telcoms were supposed to jump on tiered pricing so customers wouldn't have a choice.  Thanks Virgin/Sprint for showing that there is still some real business competition in America for mobile customers!  Maybe the evil empire won't win.

AT&T's Bet Against the Future

Fred Vogelstein has an interesting piece in Wired about AT&T's uncomfortable relationship with Apple and the origins of the now widely used shorthand "#attfail":

Wired: Inside the iPhone Network Meltdown

It's got some interesting insights, particularly how pissed off Steve Jobs was about idiot boy Ralph de la Vega promising tethering was coming "soon" before a deal had been worked out with Apple on pricing.

But it misses a big point.  It buys into the idea that AT&T was "shocked, shocked, shocked" that customers actually consumed a lot of data on their iPhones and simply couldn't keep up with demand.  It details that AT&T wanted to ramp down certain iPhone features, like tethering and video, in order to help it keep up with data needs.

But this is bullshit.   Vogelstein, probably trying to be balanced, buys into AT&T's lies about it's data problems.  Any idiot could have seen the iPhone was going to use a lot of data.  The biggest problem for AT&T is not handling data (though it clearly doesn't want to pay for the infrastructure necessary for quality service), but that it wanted to suppress features so customers continued to buy wi-fi and also to give it time to force in a tiered pricing system.

As Vogelstein points out, AT&T made record profits from it's wireless division thanks to the iPhone.  The proper response to data needs would be to seriously invest in infrastructure, something AT&T only reluctantly did.  And if that isn't enough, a modest raise in iPhone rates could have been justified.

iPhone customers biggest complaints are about dropped calls, which are not due to data demand, and lack of signal, which also has nothing to do with the amount of data being consumed.  Speed, which is also not that great on AT&T, is the real victim of data demands, but most customers are willing to wait longer to get what they want.  You loose a call, you get pissed off.  You can't make a call, you get pissed off.  You have to wait a little longer to download your Google map, not as big a deal.  Data demand has NEVER been the real issue with the iPhone.  Being able to make phone calls, THAT'S an issue.  If you buy a cell phone in a major city, like New York, you expect to be able to make calls on it.  No one has been yelling because they can't download pirated movies fast enough.

Meanwhile, AT&T had more important goals than servicing iPhone customers desire to simply make phone calls on their $100 a month two year minimum plans.  They used iPhone profits to build out their cable and wi-fi business (which the wireless business competed against).  iPhone customers ended up subsidizing all those McDonalds that offer free wi-fi.  (And those $19.95 initial monthly cable service deals.)   If people started using their iPhones for tethering (unless there was tiered pricing or it was cost prohibitive) and for video (therefore not needing AT&T's cable offerings) the wireless business might cut into AT&T's other, less profitable enterprises.

In short, AT&T was betting from the beginning against the iPhone and a wireless all you can eat network.  They want a wired network (that they can control better) and a tiered wireless network that is too expense to really use for all their customer's needs.  They want people to pay two bills.

AT&T's justification for tiered pricing is that most people DON'T use much data (which of course is a lie).  The problem is not that AT&T didn't realize that it needed to build a much better wireless network to service customers, the problem is that AT&T doesn't want customers to have access to a really great wireless network.  They want customers money, but they don't want to provide a service good enough to cut into their other business, which is wired.  Also, they don't want customers to have a lot of options, which was what the lobbying against net neutrality was all about.  AT&T spend it's early iPhone years hoping it could get Google to pay it extra money for simply providing access to it's internet sites.  After buying out all those little regional companies, they wanted a deal to lock up the internet forever.

AT&T (and the other US telecoms) realize that wireless is dangerous.  For all the bitching about finding places for towers, and needing spectrum, the real problem is that as technology improves, it will become easier and easier for competing companies to offer competing wireless services, and easier for products like the iPhone to switch carriers.  If people abandon wired networks, AT&T will not only have wasted billions in buying up old wired networks, but will have real competition.

So the problem is not that AT&T didn't anticipate the future.  AT&T doesn't want the future to happen.  They are like feudal Japan when it decided they didn't like guns and preferred swords.  That didn't work out very well in the long run and AT&T's giant bet against wireless will turn out to be a bad move too.

More Rumors of a Verizon iPhone

Here's an interesting piece by Bob Faulker discussing the most recent Verizon iPhone rumors:

Why iPhone on Verizon May No Longer Be a Rumor

Unfortunately, Faulker makes a powerful argument we may have to wait until next year for a LTE iPhone so that Apple can skip over CDMA all together.  While this makes some sense in the "Apple doesn't go backwards" argument, it's hard to see why Apple can't make a lot of money off the existing CDMA market in the US (and in Korea).  Why give that up, especially when Apple seems to expect it's own customers to buy new phones every couple years?  (And they happily do.)  For the sake of suffering AT&T customers, I hope other rumors of a Verizon iPhone in the fall come true.

Could Class Action Lawsuit Against AT&T Over Data Limits be Just the Beginning?

This just in: a class action lawsuit is brewing over AT&T's decision to put sudden data caps on already sold iPads.  As class action lawsuits go, this one is a no brainer.  AT&T is bound to settle or lose:

Class Action Lawsuit Against AT&T and Apple Over Data Limits on iPad

This is just the beginning of problems for AT&T over it's greedy and irrational desire to force tiered pricing on unwilling customers.  The specifics here, that customers were promised unlimited data for iPads, and then suddenly found out they can't have it as promised, are pretty straight forward.  Customers bought iPad's based on those promises, and then AT&T decided to change the rules with little notice (or reason) and rip them off.  End of lawsuit, AT&T pays.

The problem for AT&T is once a class action lawsuit gets started, there is no telling where it will go.  Hopefully, where this one will go is to question the entire economic logic behind tiered pricing.  I suspect, once we see the e-mails between AT&T execs over their real reasons for capping data, and find out the real stats on iPhone and iPad usage, we'll quickly find out AT&T has been lying through it's teeth about wanting to "lower" prices for customers.  We'll find out that the whole tiered pricing scheme was, as everyone knows, simply an effort to gouge customers who have no choice to switch carriers.

Maybe the settlement will also force Apple to dump it's exclusivity deal with AT&T.  We can only hope.

Sick of AT&T on You iPhone? Now is the Time to Jailbreak.

So Apple announced the iPhone 4.0 to much acclaim, except for the big disappointment, we're still stuck with AT&T.  Rumors, and all logic, say that at least Verizon will be added as a carrier in the fall, but what can an AT&T hater do in the meantime?  Well, now is probably a good time to seriously consider jailbreaking your 3.0 iPhone and switching to T-Mobile in protest.

JAILBREAK YOUR 3G IPHONE AND SWITCH TO T-MOBILE

The logic works like this.  You hate AT&T.  You've put up with their crap for years.  You almost are considering abandoning Apple and switching to Android.  But don't give up yet.  Surely the iPhone 4.0 will come to other carriers, eventually…

But if you buy a new iPhone 4.0, in order to use it, you'll be stuck with a new two year contract with AT&T.  Don't do it!  Better to jailbreak your old phone and have some fun with a new carrier (and get free tethering!).  Then when the iPhone 4.0 is finally available for other carriers, you'll have some real choice at last without having to pay to get out of your AT&T contract.

EXCLUSIVE: Interview With a Mythical AT&T "Data Hog"

According to the mainstream press, evil "data hogs" have been ruining AT&T's iPhone service for everyone. Because of them, AT&T claims it was forced to initiate a tiered pricing plan that supposedly will make everyone happy except those evil data hogs.

For example, the New York Times states: "The trouble for AT&T was that a fraction of users-fewer than 2 percent-made such heavy use of the network that they slowed it down for everyone else." The Times doesn't state where it came up with that number, presumably AT&T. In the same piece, telecommunications industry analyst, Roger Entner, says: "The free lunch for the ultra-heavy data user has been taken off the menu." In the Los Angeles Times, Jack Plunkett, another analyst states: "There are a handful of subscribers that are using a ton of bandwidth…" No facts or figures are independently confirmed or researched by either paper, which seems odd since there would seem to be some big logic holes in this "data hog" story. (For example, all of AT&T's iPhone contracts have a data cap of 5 gigs which isn't a lot for supposedly "unlimited" plans.) Thanks for keeping your readers informed, leaders of the fourth estate!

While AT&T Critic doesn't have access to the same crack reporting staffs that are able to reword AT&T press releases, repeat corporate dogma without question and quote paid industry analysts without any fact checking, we do have this EXCLUSIVE interview with one of those elusive DATA HOGS.

AT&T Critic: "Hello, so you are a real life iPhone data hog?"

Data Hog: "Yes. I'm a data hog. Oink. Oink."

AT&T Critic: "I have to say, I didn't really believe you existed. I thought you were just a mythical corporate scapegoat invented to justify a complicated tiered pricing scheme aimed at ripping off all customers."

Data Hog: "No, no, I really exist, I suck up lots and lots of data and ruin things for everyone."

AT&T Critic: "But AT&T widely advertised that it was offering "unlimited" data access for iPhone customers. Why are you such a bad person because you take full advantage of a service they promoted that you paid for under a minimum two year contract?"

Data Hog: "Because I hog so much data."

AT&T Critic: "AT&T says that 98% of smart phone customers use less that 2 gigs of data and even claims that 65% use less that 200 megs. These are very low amounts of supposedly unlimited data. So isn't the real story that most smart phone customers aren't using their phones that much and AT&T has been racking in profits on people who are paying for services they barely use?"

Data Hog: "No, no, that's not the story, the story is that data hogs are ruining things."

AT&T Critic: "But how could AT&T not assume in advance that some small percentage of people might use data more than others? Where is the surprise in that? After all, it actually seems pretty amazing that only 2 percent of people are using more than 2 gigs. How could AT&T have not planned on some tiny percentage of people taking them up on their widely advertised offer of unlimited data? Why should that be such a problem?"

Data Hog: "Because I'm such a hog. I'm ruining it for everyone else."

AT&T Critic: "That makes absolutely no sense. Cable companies don't get upset when people watch more TV. 24 hour fitness centers don't get upset when people work out a lot. It would seem that you're one of AT&T's best customers. Why should you be vilified?"

Data Hog: "Because… I'm evil? Oink?"

AT&T Critic: "In addition to paying $30 a month for the right to use "unlimited" data, you also have to pay above average fees for having an iPhone. I still don't understand what you've done wrong. I assume if you're such a heavy data user, you probably do a lot of texting, which AT&T has the highest rates for, and therefore they get extra money from that. Not to mention you probably use your phone a lot and pay for unlimited minutes. If you use so much data, perhaps you're a customer of AT&T's internet service, second lines and land lines. AT&T offers mapping and family tracking services for extra fees… surely you're a customer with above average phone bills all around. AT&T must be making a ton of money off you already."

Data Hog: "No, no, I don't do any of that. I don't text, use the phone, or anything. I just hog data."

AT&T Critic: "Even if you personally are not using a lot of AT&T's expensive services, a large percentage of other supposed "data hogs" probably represent AT&T's most valuable business customers. So, what exactly are you doing with all this data you're hogging?"

Data Hog: "Oh, I'm just hogging it. Lots of it. Lot's of data. I'm a data hog."

AT&T Critic: "But what EXACTLY is the data? What is it you're down loading all the time?"

Data Hog: (Long pause.) "Umm… porn."

AT&T Critic: "Porn? Why are you downloading porn on your iPhone? But why not use your computer if you want that much porn? I mean, wouldn't it be faster? In fact, if you're doing a lot of data hogging, why not use faster services like wi-fi, many that are free? Why would you use your iPhone to download lots of data? It doesn't make any sense."

Data Hog: "Because… I'm evil?"

AT&T Critic: "Well, okay, but exactly how much data are you hogging?"

Data Hog: "Oh, tons and tons. All porn."

AT&T Critic: "AT&T already has a 5 gig per month limit on iPhones. So if you went over that, why didn't AT&T cut off your service or bill you extra?"

Data Hog: "I don't know…"

AT&T Critic: "I mean, if data hogs are a problem, isn't it AT&T's fault for not enforcing it's contractual 5 gig limit? If congestion was really all because 2 percent of customers who were violating their contracts, why didn't AT&T cut them off or charge them extra? Why change the rates for everyone because AT&T didn't follow it's own rules? Are you saying that AT&T's service problems were all AT&T's fault for not enforcing their own limits in the first place?"

Data Hog: "Umm… maybe I was just under 5 gigs."

AT&T Critic: "So data hogs are really a tiny 2 percent of iPhone customers who went over 2 gigs (which is about two feature films a month) and less than 5 gigs using a service advertised as "unlimited?" Anyone watching You Tube on a two hour daily train commute could use 5 gigs a month easily. Why should these people be condemned as data hogs and have their rates doubled? And why should everyone else have to worry about their phone bills suddenly spiking, when they had been using well under the iPhone's contractual capacity? Isn't the real story here that people have not been using much data on their iPhones, so AT&T is lowering it's data limits to bill everyone more? Wouldn't a better justification of raising rates be that everyone was using lots of data, not just a few data hogs? Wouldn't the real way of solving this imaginary "data hog" problem just be to enforce the original contracts 5 gig limit or lower it to 4 gigs if necessary? That is, unless AT&T is lying about data hogs being a problem, and simply wants to raise rates on everyone."

Data Hog: "Oink… oink, did I mention I hog data?"

AT&T Critic: "Isn't the truth that you are not a mythical data hog at all. You're just Randall Stephenson wearing a fake pig nose?"

Data Hog: "No comment."

AT&T's War on the Internet

There's lot of commentary out there about AT&T's latest move to punish people for using the internet. Jeff Jarvis at BuzzMachine correctly points out in this post that what AT&T is doing is just plain evil:

BuzzMachine Gets It Right

John Gruber at Daring Fireball takes a good news/bad news approach. He's right about all the bad news, but wrong about the supposed "good."

Daring Fireball Gets it Wrong

On the bad side, as Gruber points out, yes, the tethering deal sucks, the overage charges for the lower priced tier are criminal, and changing the pricing structure on the iPad so quickly after it was released shows AT&T's contempt for its customers.

On the "good" side, Gruber is flat out wrong. First off, $25 for 2 gigabytes is not a price cut. AT&T is offering less for less. A lot less for a little less. iPhone customers originally were paying $30 for "unlimited" access (which was actually capped at 5 gigabytes so it never was unlimited). In order to get 5 gigabytes in the future, AT&T customers will now have to pay $55 almost double the previous rate. Like most iPhone customers, John may not have been using over 2 gigabytes, but it doesn't take much imagination to realize that the more people come to depend on their iPhones, and the more cool apps that come out, the more data they will need. How many people used the internet for much more than e-mail for the first few years it was around? The iPhone is still in it's infancy and this move by AT&T is an attempt to strangle it, and the iPad.

Charging $10 per gig isn't a good deal just because Verizon charges more. I can buy a new hard drive for less than $1 a gig. A real, physical hard drive. AT&T is charging for electrons passing through an existing network. John says, "If you use more, you pay more. Why is this hard to understand?"

Well, what if your cable company suddenly decided to charge you for how many hours of television you watched? It's not hard to understand that that would take a lot of the fun out of watching television. That that would represent a serious cut in service, regardless of whether you watched a lot of television. It's not hard to understand that providing 24 hour unlimited access to the service you paid for doesn't cost more than pennies, and that charging by the hour (or by the gigabyte) is simply a method of ripping people off. It also isn't hard to understand that once such a rate structure is crammed down the throat of customers with no other options, rates will likely increase.

What's hard to understand is why AT&T should be allowed to use the public airways to change the basic business model of the internet to the detriment of everyone but AT&T. Flat rates for service has been enormously successful in encouraging innovation and free content creation on the internet. For AT&T to use it's market share (gained by providing flat rates for unlimited service for 4 years) to unilaterally change the rules on what is now a critical communication and educational service is not acceptable. For AT&T to expect to be paid per bit for content created by others and services provided by others is wrong.

One of the great things about the internet is, up till now, if a child asks where Madagascar is, it can be looked up on the internet without any concern as to whether it will cost more. AT&T wants to change that equation. It wants people to be worried about how much they data they consume, not because it actually costs more, but simply to make additional profits. "Okay, dear, you can google Madagascar, but don't watch any videos about it! We can't afford it."

Gruber also seems to think that $14.95 for 200 megs is a "great" starting price buying into AT&T's bullshit that most smart phone customers use less than that. He correctly guesses that AT&T is deliberately trying to confuse things by saying "smart phone" rather than "iPhone." But Gruber still thinks a lot of iPhone users will find this a deal. Well, they won't. The average iPhone users uses 270 megs, and the average person's usage grows every year. So the entry level price won't work for all but a few iPhone users, and odds even they will bump over the limit and into AT&T's excessive overage fees.

Gruber also fails to note that AT&T is lowering the starting rate from 250 megs to 200 megs on the iPhone. Where's the discount there? By cutting one fifth of customers monthly allowance, it's clear AT&T is not serious about providing a low cost option. The $25 deal is really the only option for anyone who actually plans to use an iPhone. $14.95 simply functions as a misleading price point. (And if we are to assume that these electrical bits have some actual cost associated with them, why does it cost over half as much money for a tenth as many bits? Why not simply a 1gig $14.95 option and a 2gig $25 option?)

The bottom line is: AT&T has been profiting enormously by providing unlimited (5gigs) data service on iPhones for $30. Now everyone will be paying $25 for half of what they were getting before, just as new iPhones and iPad are coming out that will likely consume a great deal more data.

Gruber may not be concerned about his iPhone usage because he also pays for an home internet connection. That's great if you're making enough money to have the option of paying for two separate ways to access the same service. One of AT&T's goals is clearly to keep customers viewing smart phones as a secondary way to access the internet, and thus protect it's land line business. While that may be nice for AT&T, to charge extra for one service to force you to buy another, it's not good for customers or frankly… America.

It's a huge rip off, and one that people need to actively fight. Customers should refuse to patronize AT&T, and Congress and the FCC should demand AT&T change it's policies. America has the worst, most expensive, and slowest internet service of any modern nation. AT&T's new plans encourage it to continue to provide lousy service at high prices. And that is too high a price to pay.

Further Proof AT&T Hates Its Customers

It doesn't take a psychology degree to figure out that AT&T CEO Randall Stephenson is a jerk. The way he runs his company is enough of a clue. But you'd think someone, somewhere in the company might gently encourage him into not going out of his way to look like an asshole. But I guess not:

AT&T Threatens Customer Who Dares to E-Mail CEO

AT&T Tries to Sell Tiered Pricing But Nobody Buys It

I don't really know a lot about the web-news site Business Insider, but I'm pretty sure it's just a corporate love doll. I could be wrong but I think it's just something corporations jump on and fill with their… well, you get the idea. Here's their recent post about AT&T's new tiered pricing strategy. No surprise, but the plastic human likes it.

AT&T Doesn't Hate It's Customers, It Loves Them Real Good

AT&T flacks are working overtime to sell their bosses incredibly bad move to the public, but it ain't working, love dolls aside. Here's a better take with some actual reporting:

AT&T Backlash

My favorite quote is:

"AT&T makes billions of dollars and instead of bettering their network so it can keep up with demand they'd rather screw the consumer."

Yep.

PS: Note to AT&T execs. Love dolls aside, guys, this ain't going to fly.

EXCLUSIVE: Interview With a Mythical AT&T "Data Hog"

According to the mainstream press, evil "data hogs" have been ruining AT&T's iPhone service for everyone. Because of them, AT&T claims it was forced to initiate a tiered pricing plan that supposedly will make everyone happy except those evil data hogs.

For example, the New York Times states: "The trouble for AT&T was that a fraction of users-fewer than 2 percent-made such heavy use of the network that they slowed it down for everyone else." The Times doesn't state where it came up with that number, presumably AT&T. In the same piece, telecommunications industry analyst, Roger Entner, says: "The free lunch for the ultra-heavy data user has been taken off the menu." In the Los Angeles Times, Jack Plunkett, another analyst states: "There are a handful of subscribers that are using a ton of bandwidth…" No facts or figures are independently confirmed or researched by either paper, which seems odd since there would seem to be some big logic holes in this "data hog" story. (For example, the fact that all of AT&T's iPhone contracts have a data cap of 5gigs, which is not a heck of a lot for an advertised "unlimited" service.) Thanks for keeping your readers informed, leaders of the fourth estate!

While AT&T Critic doesn't have access to the same crack reporting staffs that are able to reword AT&T press releases, repeat corporate dogma without question and quote paid industry analysts without any fact checking, we do have this EXCLUSIVE interview with one of those elusive DATA HOGS.

AT&T Critic: "Hello, so you are a real life iPhone data hog?"

Data Hog: "Yes. I'm a data hog. Oink. Oink."

AT&T Critic: "I have to say, I didn't really believe you existed. I thought you were just a mythical corporate scapegoat invented to justify a complicated tiered pricing scheme aimed at ripping off all customers."

Data Hog: "No, no, I really exist, I suck up lots and lots of data and ruin things for everyone."

AT&T Critic: "But AT&T widely advertised that it was offering "unlimited" data access for iPhone customers. Why are you such a bad person because you take full advantage of a service they promoted that you paid for under a minimum two year contract?"

Data Hog: "Because I hog so much data."

AT&T Critic: "AT&T says that 98% of smart phone customers use less that 2gigs of data and even claims that 65% use less that 200 megs. These are very low amounts of supposedly unlimited data. So isn't the real story that most smart phone customers aren't using their phones that much and AT&T has been racking in profits on people who are paying for services they barely use?"

Data Hog: "No, no, that's not the story, the story is that data hogs are ruining things."

AT&T Critic: "But how could AT&T not assume in advance that some small percentage of people might use data more than others? Where is the surprise in that? After all, it actually seems pretty amazing that only 2 percent of people are using more than 2gigs. How could AT&T have not planned on some tiny percentage of people taking them up on their widely advertised offer of unlimited data? Why should that be such a problem?"

Data Hog: "Because I'm such a hog, I'm ruining it for everyone else."

AT&T Critic: "That makes absolutely no sense. Cable companies don't get upset when people watch more TV. 24 hour fitness centers don't get upset when people work out a lot. It would seem that you're one of AT&T's best customers. Why should you be vilified?"

Data Hog: "Because… I'm evil? Oink?"

AT&T Critic: "In addition to paying $30 a month for the right to use "unlimited" data, you also have to pay above average fees for having an iPhone. I still don't understand what you've done wrong. I assume if you're such a heavy data user, you probably do a lot of texting, which AT&T has the highest rates for, and therefore they get extra money from that. Not to mention you probably use your phone a lot and pay for unlimited minutes, and if you use so much data, perhaps your a customer of AT&T's internet service, second lines and business services. AT&T offers mapping and family tracking services for extra fees… surely you're a customer with above average phone bill all around. A customer that should be valued, not attacked."

Data Hog: "No, no, I don't do any of that. I don't text, use the phone, or anything. I just hog data."

AT&T Critic: "So, what exactly are you doing with all this data you're hogging?"

Data Hog: "Oh, I'm just hogging it. Lots of it. Lot's of data. I'm a data hog."

AT&T Critic: "But what EXACTLY is the data? What is it you're down loading that is so bad?"

Data Hog: (Long pause.) "Umm… porn."

AT&T Critic: "Porn? Why are you downloading porn on your iPhone? But why not use your computer if you want that much porn? I mean, wouldn't it be faster? In fact, if you're doing a lot of data hogging, why not use faster services like wi-fi, many that are free? Why would you use your iPhone to download lots of data? It doesn't make any sense."

Data Hog: "Because… I'm evil?"

AT&T Critic: "Well, okay, but exactly how much data are you hogging?"

Data Hog: "Oh, tons and tons. All porn."

AT&T Critic: "AT&T already has a 5 gig per month limit on iPhones. So if you went over that, why didn't AT&T cut off your service or bill you?"

Data Hog: "I don't know…"

AT&T Critic: "I mean, if data hogs are a problem, isn't it AT&T's fault for not enforcing it's contractual 5 gig limit? If congestion was really all because 2 percent of customers who were violating their contracts, why didn't AT&T cut them off or charge them extra? Why change the rules for everyone because AT&T didn't follow it's own rules? Are you saying that AT&T's service problems where all AT&T's fault for not enforcing their own limits in the first place?"

Data Hog: "Umm… maybe I was just under 5gigs."

AT&T Critic: "So data hogs are really a tiny 2 percent of iPhone customers who went over 2gigs (which is about two feature films a month) and less than 5gigs using a service advertised at "unlimited?" Anyone watching You Tube on a two hour daily train commute could use 5 gigs easily. Why should these people be condemned as data hogs and have their rates doubled? And why should everyone else have to worry about their phone bills suddenly spiking, when they had been using well under the iPhone's contractual capacity? Isn't the real story here that people have not been using that much data on their iPhones, so AT&T is lowering it's data limits to bill everyone more? Wouldn't a better justification of raising rates be that everyone was using lots of data, not just a few data hogs? Wouldn't the real way of solving this imaginary "data hog" problem just be to enforce the original contracts 5 gig limit or slightly lower it to 4gigs? That is, unless AT&T is lying about data hogs being a problem, and simply wants to raise rates on everyone."

Data Hog: "Oink… oink, did I mention I hog data?"

AT&T Critic: "Isn't the truth that you are not a mythical data hog at all. You're simply Randall Stephenson wearing a fake pig nose?"

Data Hog: "No comment."

AT&T's Latest F**k You to iPhone Customers

So, with a Sprint iPhone almost surely on the way, the dunderheads running AT&T decided to double down on stupidity. In a pre-"we lost out exclusivity on the iPhone" emotional outburst, they decided to finally enact customer despised tiered pricing for cell phone data. Here's a few major news reports (all with helpful AT&T spin).

NY Times

LA Times

San Francisco Chronicle

Mercury News

Detroit Free Press

AT&T execs have been saying for some time that tiered pricing was inevitable despite any logical reason for it. My imaginary source at Apple tells me that Apple's original exclusive deal with AT&T required fixed pricing but with the Sprint iPhone (supposedly) on the way, AT&T is free to go off on a drunken binge and beat on its best customers.

All of this press, filled with quotes from paid AT&T "industry analysts" is about selling an unpopular war. A war by AT&T against the American public. For this to work, the other telecoms will have to get on board and collude with AT&T on a pricing scheme that makes no sense. I don't think it's going to work, but the short term greed and stupidity of the people running AT&T means they had to try it. They just had too much invested in their own lies about why this is such a good idea. Like any unpopular war, AT&T had spent years dreaming about it, preparing for it, and even though now is probably the worst time for it, they push ahead despite the suffering it will cause all involved.

The final insult in all this is that they finally gave iPhone customers tethering for $20 (something many companies offer for free). It's clear now the lies to iPhone customers about tethering "coming soon" for two years were all about stalling until AT&T could roll out tiered pricing. If AT&T had simply offered iPhone tethering for $20 two years ago, everyone would have happily accepted it and AT&T would have made a good profit on it. But the best interests of it's customers are AT&T's last consideration. How to rip off as much money as possible is foremost in it's mind. And if that means denying customers needed services until AT&T figures out how to charge them excessively, then so be it. It's almost as if AT&T can't stand making an honest buck, they have to figure out how to fuck their customers or they aren't happy.

Here's a more accurate take on what tiered pricing is really all about:

Tiered Pricing is Anti-Consumer

Why Did AT&T Execs Lie About iPad Data Consumption?

I've mentioned before how weird it was that AT&T execs dismissed the strain the iPad was going to put on their cellular system. Well, what should they have said? Kind of like what these European telecom executives say in anticipation of the UK iPad release:

iPad Will Consume Tons of Data

Now, we could credit this to a better educational system in the old country, or maybe that they hire smarter executives over there. But the real issue is not the lack of intelligence of AT&T's leadership, we already know it is subpar, but why it is they are so quick to simply lie when confronted with facts they don't like.

Even clueless AT&T exec's knew the iPad would put a strain on their system, and consume tons of data, but for various reasons they wanted to downplay it. I can understand that, but what I can't understand is how executives of a major telecom in this day and age think they can get away with lying to the public over matters they will quickly be proven to be wrong on. There's something very dysfunctional in that thinking and it seems to be a pattern in AT&T's entire operation. Lying to people that they are getting a rate cut, when in fact it's a rate increase, lying that a service contract is a good deal, when it's a bad one. Saying dropped calls are a design flaw in the iPhone. Saying they're going to come out with tethering when they have no intention to. This feels like an institutional problem, and they are going to be stunned at how quickly iPhone customer's flee for another carrier the moment they have a chance. Habitual liars are the last to know when people are fed up with their lies.

Now, of course, the European execs quoted aren't beyond distorting the truth. They say increased iPad traffic will speed up the switch to tiered pricing, something that they say is inevitable (it isn't). But at least they are consistent, AT&T execs desperately hunger for the scam of tiered pricing (the better to confuse and rip off it's customers) but they fumbled with the iPad like a liar who has told so many untruths they can't figure out what to say when confronted with the fact that nothing they are saying makes sense.

If tiered pricing is necessary for the "survival" of telecoms, the iPad is a device that absolutely would require it. AT&T execs should have said exactly what the European ones did. The iPad is going to demand a lot of data, and to "survive" we'll have to charge extra for it.

But tiered pricing is not enviable, and in fact makes no technological or business sense except as a way to inflate customer bills for short term profits. (Long term, it's better for customers to have access to limitedness data. The internet has already proven that time and time again.) Ironically, the fumbling of AT&T execs over the launch of the iPad may have killed any chance AT&T has of pushing through tiered pricing. It may be too late to put that horse back in the barn. And we can thank AT&T's knee jerk dishonesty for exposing that.

More on Sprint iPhone Rumors

The rumors of a Sprint iPhone continue despite the lack of any real confirmation:

Welcome Sprint iPhone

Barron's Apple/Sprint Deal?

Mobile Sprint Rumored

There is no "news" here, and no new here either. We simply have the repetition of a rumor which happens a lot about anything involving new Apple products. These things come and go quickly in the Apple gossip world. But something about this particular rumor is keeping it alive despite any new facts.

The thing is, it just makes a hell of a lot of sense. We've been waiting for some time to see what Apple's move is going to be in regard to dumping it's exclusive deal with AT&T. If it isn't true, then, boy, there was a missed opportunity. One thing that I don't think anyone considered until now was the huge value of free publicity Sprint would get (and which it needs) if it was the first carrier to have a non-AT&T iPhone. The publicity is worth millions already.

In fact, the publicity is so good, it's possible someone involved in Sprint might be behind the leak. Got no proof of that either, but it's interesting to think about. I'm still digging an I'll keep you posted.

Sprint iPhone: Why Apple Picked Sprint Over Verizon and Why AT&T is Crying

The internet is still buzzing about the news of a possible Sprint iPhone. Of course, the "news" is simply a completely untraceable and unverifiable rumor. So it's pretty irresponsible journalism to even treat this like a real story, let alone to devote any print to commenting on something that could turn out to be nothing.

But I'm not a responsible journalist, so fuck it. This is too juicy and fun to think about.

So lets just pretend that it's true. Let's say there really is a Sprint iPhone and it's going to be released next week. Better yet, let's say that not only did Apple make a deal with Sprint to provide service for the iPhone, but that it DIDN'T make a deal with Verizon, yet. Wow, that is news! (Or it would be, if it turns out to be true.)

So let's jump to the post (possibly imaginary) Sprint iPhone announcement commentary and analysis.

What a fuck you to Verizon! What a bitch slap to AT&T! Apple really is showing the telecom world who's it's daddy.

Everyone (especially anyone with an iPhone) knows that AT&T service seriously sucks, so it was just a question of time before Apple opened the iPhone up to other carriers. Remember, to a large extent, Apple originally made it's deal with AT&T exactly because they were bunglers. It was a second tier company that desperately needed a hot product. Verizon was the top company, and it was luke warm about the iPhone, and unwilling to make a deal on Apple's terms. Now, of course, the iPhone's enormous success lined the pockets of AT&T and gave it huge profits for several years and made it a strong number two.

Verizon is still the number one cell carrier in terms of market share, but it's profits have been in the toilet and not having the iPhone is the main reason. Clearly, Verizon needs to make a deal. At this point Apple can demand and get better terms. But how much better? Also, if Apple does make a deal with Verizon, it's possible that once Verizon sucks in some of that iPhone cash, it could look for ways to stab Apple in the back. Clearly these companies don't have a lot of love for each other and neither Verizon or AT&T are happy about how much they need Apple.

Enter Sprint. Sprint is the number three company and in serious trouble. It desperately needs to make a big move. And Sprint made it. It bet the farm on a 4g network and rolled it out well ahead of Verizon and AT&T. But what to put on that network? Is it possible Sprint made this bet knowing that it would get the iPhone once the network was ready?

Well, I don't have any inside information or sources. So let's just pretend I do. My inside source at Apple says that Sprint and Apple have been in deep secret discussions about this all along, and Apple knew it would come out with a Sprint enabled CDMA iPhone in June. Apple threw AT&T a bone by giving it an exclusive window on the iPad. (According to my imaginary source, a CDMA iPad will come out in time for Christmas.)

Which brings us back to Verizon. One of the key reasons Apple hasn't had a Verizon iPhone is that the iPhone chipset is GSM rather than CDMA. Since most of the world is GSM, it made a lot of sense for Apple to focus on that market first. It was a brilliant move. But if Apple comes out with a CDMA iPhone for the US market why not give it to BOTH Verizon and Sprint?

That's were the fuck you to Verizon comes in. My imaginary sources at Apple say Steve Jobs is still pissed off that Verizon has tried to play hardball in negotiations for so long, and, he's still pissed off at AT&T for just sucking up iPhone profits and not reinvesting in a better network (Which the iPad in particular needs). So making deal that allows Sprint first crack at the new iPhone is great revenge. Moreover, propping up the third place telecom makes sure there will be plenty of competition in carriers in the foreseeable future which is very good for Apple.

This is bad news for both Verizon and AT&T. Those companies would prefer if the cell phone business was an Oligarchy with only two top bosses. A resurgent Sprint is not in either of their best interests. If Apple had come out with only a Verizon iPhone, or even let Sprint and Verizon have them at the same time, Verizon could continue to use it's size to take away market share and hopefully Sprint would fade away.

But the publicity of being the first non-AT&T iPhone is worth millions in advertising for Sprint, much more than for Verizon. It really makes Sprint a major player again. And what can Verizon do if Apple says it can't have the iPhone until months later? Nothing. Absolutely nothing.

Talk about playing hardball. But that's the way Apple rolls. Let's be realistic, these telecoms have been ripping off customers for a long time, fighting technology and fighting the future. Well, the future just landed on top of them.

We'll find out next week if any of this is real, but boy, I sure hope so! I'm looking forward to my Sprint iPhone and put a Sprint iPad on my Christmas list!

UPDATE: Here's a piece predicting a Verizon iPhone won't come in June, but saying nothing about a Sprint iPhone.

No Verizon iPhone at WWDC