AT&T: iPhone Data Pricing Comments ‘Taken Out Of Context’ – AT&T Simply Wants to “Educate” You

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12 Dec 2009

AT&T executive comments yesterday that the carrier might be ditching the current “all you can eat” iPhone data plan for usage-based pricing didn’t go over very well with either the company’s users or the press.

Many felt AT&T was blaming its customers for the company’s inability to adequate meet iPhone bandwidth demand. Others felt AT&T was continuing the industry trend of pretending that the flat-rate pricing model doesn’t provide enough revenue for network upgrades. The coverage has had echoes of Time Warner Cable’s botched attempt to hoist usage-based billing upon their customers earlier this year.

As has repeatedly been the case when it comes to AT&T’s 3G network this year, AT&T again found itself in the unenviable position of having to do damage control. As such, AT&T’s been going around to various news outlets insisting that AT&T Wireless boss Ralph de La Vega’s comments were “taken out of context.” As such, they’re providing a link to the one hour presentation where the comments were made. Here’s the transcript of the relevant bits:

I think one of the first things that we need to do is we need to educate the customers. And it s something that customers today have not been used to doing, so we ve got to get them to understand what represents a megabyte of data. And so what we re doing now is we re improving all of our systems so that we can begin to give customers real-time information about their data usage and begin to get customers educated. And I think longer-term, there s got to be some sort of a pricing scheme that addresses the usage, but that s going to be determined by industry competitive factors, regulatory factors and customer successes.

The idea that “user education” will somehow magically compensate for the capacity and network reliability AT&T failed to provide iPhone users is the kind of disingenuous language Time Warner Cable used when they tried to impose a new pricing model that lacked consumer value. Like Time Warner Cable, AT&T investors and executives are chomping at the bit to impose an unpopular usage-based billing model on both their wireless and wireline networks — simply because it generates more revenue than flat rate pricing. “User education” plays no part in the equation. User disinformation does, and there’s been a lot of it.

The argument that an already hugely profitable company wants to charge even more money for bandwidth isn’t one that sits well with consumers. As such, AT&T’s tried to sell the idea by arguing that usage-based billing is about being fair to grandmothers, while their lobbyists have spent a lot of money arguing that unless you embrace their new pricing vision, the Internet will explode. As with Time Warner Cable, AT&T’s customers see this “consumer education effort” for what it is: an effort to impose higher prices on consumers. As de la Vega himself notes, the issue will be whether regulators and consumers sign off on the idea.

Link to the original article…

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