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Unlimited data is dead, so let's fight a smarter fight

Unlimited data is dead, so let's fight a smarter fight


There's a lot to be fixed with data plans in the US, but unlimited service isn't one of them.

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AT&T $50 5GB plan
AT&T $50 5GB plan

For the smartphone-heavy United States, the notion of unlimited wireless data is dead, kaput, finis. It's not coming back. Many other parts of the world are in the same boat, and those that aren't will eventually get there. Usable spectrum is a precious, limited resource that can't be extended, and spectral efficiencies introduced by newer technologies like LTE and LTE-Advanced will only take us so far. Some carriers — notably AT&T — have been aggressively deploying additional capacity in urban areas to the point of maxing out. This is where capitalism comes into play: one by one, all-you-can-eat data plans have been replaced by data buckets of varying sizes. Outrageous per-kilobyte overage charges (from legacy limited plans), a vestige of slow networks and dumb phones with smalls screens and limited capabilities, have been replaced by more reasonable rates that bill by the full gigabyte. If you go over by a gig or two, you're not immediately bankrupted anymore — but you will pay more.

There's an important fight to be waged

That said, our brave new (limited) reality has a long way to go to mature, stabilize, and find the balance between supply and demand. AT&T's plan adjustments this week and Verizon's recent double data promotion are prime evidence of that. Market forces would usually help find that stability in a reasonable amount of time, but there are some factors that complicate and obfuscate that process in wireless. For one, no two carriers have the same supply — spectrum, that is — nor do they have the ability to readily generate more supply. Secondly, those carriers often have a vested interest in obscuring just how close they are to exhausting their existing supply for a variety of competitive reasons, and it's virtually impossible to get an accurate read on it from the outside. Third, hardware exclusives and contracts are always being used as a tool to limit carriers' need to compete on plan pricing alone — if you have the better hardware and your customers know it, why bother to undercut (or even match) the competition?

This is where angry consumers come in, because I do think there's an important fight to be waged — but screaming for the return of unlimited data is a non-starter, and simply complaining that data is too expensive isn't sufficient. Carriers, and the government, need specific and actionable items in order to evolve this market in a way that's beneficial and fair to everyone. Here's what we should be asking for.

Better accountability

Carriers don't own spectrum, they license it from the federal government. The spectrum itself is a national resource that can't be replenished. As such, each spectrum band is licensed with particular needs and applications in mind, and there are rules that the FCC puts in place around that. Those rules vary from band to band and from auction to auction, of course — take the infamous 700MHz Block C auction that Verizon won in 2008, for instance, which has an "open access" clause requiring that any device be able to connect — but there are always rules.

The smart fight: The FCC (and, by transitivity, the American taxpayers) should be demanding more accountability from the companies that occupy this spectrum. I'm proposing that every carrier operating a cellular network in the United States should be required to submit a yearly unredacted report detailing their spectrum utilization in every CMA (Cellular Market Area) where they operate. The report should contain, for each market, the amount of spectrum they're actively utilizing with deployed network equipment versus the amount of spectrum in their control. Unutilized and underutilized spectrum should be subject to re-auction after a period of time set in place at the time of the spectrum's initial purchase. There's been a lot of discussion in recent months about AT&T's alleged "warehousing" of spectrum in an effort to drive up prices and starve competitors of the spectrum they need to operate — this would eliminate the problem entirely. If there's a problem at all, that is — as consumers, we don't presently have the hard data we need to make that call.

More tiers

Carriers intentionally leave holes in their plan tiers in an effort to upsell their customers into pricier ones, because the plan they really need doesn't exist — and the fear of overage keeps them from looking at a lower option. That's not a phenomenon that's unique to data: take messaging, for instance, which Verizon only offers as a bucket of 1,000 or unlimited for $10 and $20, respectively. AT&T eliminated its 1,000 message plan altogether last year, meaning that unless you want to pay by the text, you're now stuck with the $20 unlimited package.

With its latest data plan move this week, AT&T's offerings jump all the way from 300MB to 3GB with nothing in between. I consider myself a "road warrior" who's getting a lot done from his phone (though I don't stream much video), and I very rarely break 1GB a month — 300MB, though, is comically low, which means I'm effectively locked into the 3GB plan. (In fact, at $20 for the 300MB plan and just $10 more for 3GB, the lower option really doesn't make any economic sense whatsoever.) The old $25 2GB plan, which would be a better fit for me, is going away.

AT&T claims that it's seeing data usage increase 40 percent year over year, which it's using in part as a justification for raising caps (and prices) across the board. And to AT&T's credit, the cost per byte actually goes down on these new plans — but ultimately, you're paying more per month. For many customers, they'll be paying that higher monthly fee for extra data that they're not using.

Why have buckets at all?

The smart fight: Customers can and should be upset about the lack of plan flexibility. It's an area where I hope we're going to see carriers continue to experiment and innovate in an effort to gain a competitive advantage. In fact, why have fixed buckets at all? If carriers simply offered data by the gigabyte at two rates — allotted and overage — customers could tailor their plans to their exact needs. Verizon seems to be on the right track: it currently offers some six different buckets for smartphones ranging from 2GB to 12GB, but there's ample room to simplify the scheme and simply bill by the gigabyte.

Data is data is data

AT&T and Verizon don't charge a monthly fee for mobile hotspot service, per se, but they still arbitrarily differentiate between hotspot-capable plans and those that aren't: AT&T has a single hotspot plan (its most expensive, naturally), while Verizon has a completely separate set of three ranging from 4GB to 12GB. I can understand the argument that a monthly fee for tethering is justified on an unlimited data plan since you're destined to consume considerably more data while tethered, but now that these companies have gone to limited data plans, they have no business making any distinction whatsoever. From the perspective of the carrier's infrastructure, no byte is different from any other byte, and they all count equally toward your monthly allotment.

The smart fight: Customers on limited data plans should demand to be able to use tethering and mobile hotspot features on their devices at no additional cost, no matter the bucket. This one flirts with the tenets of net neutrality — a principle that the FCC has refused to fully endorse on wireless networks, unfortunately, which means there's no outright legal challenge to be waged (yet) against these differentiated hotspot-enabled plans. It's just common sense that they shouldn't exist.


Never mind software carrier locks on phones; those can be overcome, and most operators will give you the code you need to unlock your device for use on another network as long as you're a customer in good standing. The bigger concern — particularly as we enter a complex minefield of frequency bands with global LTE — is the "hardware lock" effected by a device that physically lacks the radio and antenna to operate on many (or any) other carriers.

The FCC recently missed a critical opportunity to require interoperability between LTE Bands 12 and 17, both of which lie in the 700MHz range. Many of AT&T's LTE licenses lie in Band 17. Rural carriers — many of whom purchased spectrum in Band 12 — argued that only by requiring Band 17 devices to support Band 12 would they be able to deliver competitive handsets and other hardware in a timely fashion, because they'd be able to reuse AT&T's devices and benefit from a shared economy of scale. In other words, companies like Samsung, HTC, and others aren't motivated to quickly deliver high-quality phones to carriers that can only buy a hundred thousand units or less, when AT&T (and others) regularly move hundreds of thousands or millions at a time.

AT&T and others have argued that interoperability requirements add engineering complexity to devices, impose new design limits, and increase cost. This is true, but the cost to competition is much greater — only by reducing carriers' ability to permanently lock in desirable devices can we encourage and ensure competitiveness in monthly plans. And the move to quadband GSM and pentaband UMTS over the last decade only proves that with enough creative engineering, broad frequency support is absolutely possible when it's required.

The smart fight: We should be demanding interoperable phones, at least among all American carriers on 4G networks. We've never achieved anything like this in the digital cellular age, and the time has come. Companies are absolutely entitled to post early termination fees (ETFs) for subsidized devices that are taken off-network, but their entitlement ends there. As it stands today, this hardware lock essentially serves as a secret weapon that stifles competition and tips the scale in the favor of those who can leverage the greatest economies of scale — Verizon and AT&T.

Sprint's ability to offer unlimited data is at direct opposition to its ability to survive as an independent company

The obvious counterexample to all of this is Sprint, which has been holding firm (so far) with its commitment to unlimited data, even as its larger competitors go to caps with overage and its smaller ones — T-Mobile, namely — go to throttling. Thing is, it hasn't been: it actually went to tiers for everything but on-smartphone data late last year. In fact, Sprint's ability to offer unlimited data at all is at direct opposition to its ability to survive as an independent company. The only reason it's still holding strong is because it's sitting on a massive cache of spectrum with ClearWire — the largest among national carriers — and it's in a distant third place for subscriber count, roughly half of Verizon's. If demand picks up (and Sprint's investors naturally hope that it will), the company simply won't be able to sustain unthrottled, uncapped plans. Supply and demand.

So let's not focus on pushing a policy that's neither economically nor physically viable. Even if the spectrum exists today to support 200 million American smartphones at reasonable download speeds without any regard for capacity, it won't exist forever — and every single carrier we deal with is a for-profit corporation. Let's instead focus on honing the principles of a healthy free market: fair, level competition across the board. Let's have those discussions, let's tell carriers, let's tell the FCC. We've got a long way to go.