Should AT&T Dump All-You-Can-Eat Plans For The iPhone?Should AT&T Dump All-You-Can-Eat Plans For The iPhone?

AT&T has gained at least four million new subscribers as the result of their exclusivity agreement with Apple on iPhone distribution in the US. It hasn't all been good news for AT&T though. iPhone users use a disproportionate amount of the carrier's available bandwidth. This affects not only iPhone users but all smartphone users on the AT&T network. Should AT&T drop the all-you-can-eat plan for iPhone users?The Slate has an article proposing just that. It claims that while most smartphone users consume 40-80MB of data per month, iPhone users consume closer to 400MB per month. The author proposes dropping the plan and going to a $10 per 100MB used, capped out at $40. That means the average iPhone user would pay $40 per month, $10 more than they currently pay.

This is wrong headed thinking. The goal of this plan is to lessen the burden on AT&T's network. This is sort of like the pricing at Disney World years ago where you had to buy tickets for each ride. "A" ticket rides were merry-go-rounds and other kiddie rides. The "E" ticket rides were the best the park had to offer, like Space Mountain. The problem with this pricing structure is dad was always counting the cost with each ride, and towards the end of the day, he would discourage rides and just want to look at the scenery. It is just human nature. Disney World became much more enjoyable once you plopped down a huge wad of cash at the beginning of the day and never though about it again.

If you move to a tiered pricing schedule, many would be constantly monitoring their 3G network usage. "Oh, today is the 6th of the month and I am already into the second $10 bracket. I'll back off on the big downloads." Even if you are someone that just accepts you will be paying $40 per month no matter what, if it is the 29th of the month and you are only half way into the $30 tier, you would likely slow down the internet usage thinking you would save $10 this month on the bill.

That takes the fun out of it. Instead of modifying user's behavior, AT&T needs to modify its network to handle the bandwidth. The exclusivity agreement will end at some point. AT&T needs to do everything it can to make existing users happy. The happier they are, the less likely they are to bolt. Right now, I'd say more than a few are so utterly dissatisfied with the carrier's performance they will gladly pay any early termination fee and jump to a competitor when the time comes. If AT&T moves to a tiered pricing plan, it will just further irritate the users. iPhone users don't need their behavior modified by pricing schemes designed to alter how much and when they use the network. They, like all smartphone users, need to be given what they paid for, just as it was advertised. If AT&T cannot offer that, someone else will.