
AT&T CEO voices regret over iPhone unlimited data model - pixelcort
http://www.engadget.com/2012/05/04/atandt-ceo-voices-regret-over-iphone-unlimited-data-model/
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lusr
"Apple iMessage is a classic example. If you're using iMessage, you're not
using one of our messaging services, right?"

It's hard to believe this is a real quote by such a senior executive. If the
profitability of your business is so significantly based on a hack (SMS) that
you stay awake at night worrying about it, and you didn't bother innovating by
developing a real solution to the problem (pervasive real-time communication)
in the past 20 years while the hack became popular, then you _absolutely_
deserve to lose this profitable part of your business - _especially_ when
you're in the friggin telecommunications business!

~~~
chrisdroukas
Despite SMS being a hack that costs carriers (essentially) nothing to send
[1], the reality of this situation is that telcos will be/are quickly losing
one of their largest profit points to services like iMessage.

Real question: Where are they going to recover that profitability from?

[1] <http://www.wired.com/gadgetlab/2008/12/text-messages-c/>

~~~
wizzard
I'm genuinely curious... why is AT&T losing so much money over iMessage? When
iMessage came out I went to downgrade my SMS plan, and found you can no longer
do so. It is unlimited SMS or no messaging. Not everyone I know owns an iPhone
and $.20 per SMS adds up, so I am stuck paying for unlimited.

~~~
toadkick
Mysteriously, AT&T changed their plans very shortly after Apple announced
iMessage. Obviously they foresaw a lot of people downgrading their plans so
they just did away with the tiered plans completely.

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mikeash
Sheesh. The iPhone pretty much single-handedly catapulted AT&T from an also-
ran cell carrier to the top. I'm sure "unlimited" was a bit of a headache for
them, but surely it was well worth it in the end.

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rexf
How about AT&T Customer regrets choosing AT&T iPhone model?

As an AT&T iPhone user (grandfathered with the unlimited data plan), I've had
nothing but poor service in both Silicon Valley, CA & NYC.

AT&T's CEO regrets offering unlimited data because AT&T has to "invest
capital"? As an iPhone user experiencing the _lack_ of capital investment
every day, I have no sympathy and only hatred for AT&T.

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tnash
In the end AT&T and the other carriers don't want to be "dumb pipes", but
that's what consumers want. Can you imagine the same applied to water? "I'm
sorry sir, but we know you used an unapproved toilet AND you went over your
allotted shower minutes this month."

We can only hope that it'll work out in our favor and they can stop preaching
to us how we should use their bandwidth.

~~~
ceejayoz
> Can you imagine the same applied to water?

I don't get unlimited water for a monthly fee, I get charged per gallon. I'd
imagine virtually all people have this situation.

Utilities - water, electricity, gas, etc. - compare to AT&T's new model better
than their unlimited one.

~~~
nknight
You're not understanding what tnash said at all. Each of the utilities you
list is a "dumb pipe". The utility company doesn't dictate what you do with
the utility, and they don't charge you a different price for running a
lightbulb vs. a washing machine. It's all about how much, not what's done with
it.

The telcos want to be exactly the opposite. They want to control what you do,
how you do it, and how much you pay for doing it, not based on the bandwidth
used, but the nature of the use. This is the antithesis of a dumb pipe.

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benologist
Rewrite of [http://bits.blogs.nytimes.com/2012/05/04/att-randall-
stephen...](http://bits.blogs.nytimes.com/2012/05/04/att-randall-stephenson/)

The crappiest part of The AOL Way that rags like Engadget pioneered ... is
that it works better than having people writing actual content.

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untog
The iMessage thing is, IMO, the more interesting comment. Apple has
effectively ripped a revenue stream away from the providers, and they can't do
much about it apart from raise prices for other stuff.

They're not alone, of course- BBM does the same thing. But they're all
disjointed networks, which plays into the provider's hands right now. People
still need text plans to contact people on other devices. I wonder if we'll
see an app like WhatsApp finally get big enough to challenge that.

~~~
jamesaguilar
Probably not. There have been dozens of challengers (Kik, Beluga, WhatsApp),
no one has gathered the ubiquity or reliability of SMS. The one one I can
conceive of hitting that goal is Facebook, and at the moment they don't seem
to be trying too hard.

~~~
MatthewPhillips
Just another silo. You know what has the ubiquity of SMS? Email.

~~~
jamesaguilar
At least on my device, email's usability is not there. Nor is its delivery
latency or immediacy on receipt.

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parfe
I bet Ma Bell had the same sad face on when they no longer had a monopoly on
leasing phones to customers.

Time moves on and the pipes get commoditized. I hope congress chooses to side
with the people rather than mandate profits for the corporations to whom we
lease our airwaves.

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dspickes
I disagree with his assessment. He only has to "invest capital" for each
megabyte you download insofar as he merely has to maintain his current
network. An individual user has a hardware limit on the amount of bandwidth
they can consume, be it imposed by the network or the consuming device. "Each
additional megabyte" consumes no more or less bandwidth than the megabyte
before it nor the megabyte after it. He has the same maintenance cost whether
this individual user is paying per megabyte or per day of access.

What causes him to have to invest capital is each additional simultaneous
connection which uses his network. These analogize to subscribers to his
service, not bits of data sent over his network.

I mean, does he really believe that he can change people's collective usage
patterns during peak hours merely by limiting their consumed bandwidth for the
whole month? Surely not. If anything, it will persuade people to eliminate
their extraneous data usage and only use it when the data connection is "most
important". I'm not one for blind guessing, but I have hunch that these "most
important" times of data access probably correlate to his current peak hours.

The power companies face this same problem with throughput, and what do they
do? Do they cap the amount of power you can receive per month in order to
alleviate load? No! They invest in throughput, and when things get sketchy
during peak times, they enforce throughput caps like rolling brownouts.

I have a hunch AT&T also does this with their forced data throttling on those
who are consuming the most bandwidth, as if they were the problem! But they
are also convincing people to pay more for less with monthly data caps. How
they can get away with this is very surprising to me, personally.

~~~
farmdawgnation
I suspect their ability to get away with it has an inverse correlation to
their customer's ability to understand what's going on. There's probably a
little bit of the execs having no idea what's going on as well. (They don't
strike me as the types who would easily understand the difference you pointed
out.)

As customers become more knowledgable about what's going on, and why it makes
no sense - AT&T et al will either be required to change their business model
or someone will eat their lunch.

I keep hoping the same thing will happen with the major cable companies as
well. Die, Comcast, die.

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hcarvalhoalves
This is like regreting modern agriculture because you could charge more from
starving people if food was lacking. When given the option, the monopolies
will always go after the "easy" model, which is of scarcity, instead of making
money by just offering plain good service in the first place.

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garethsprice
It does not surprise me in the slightest that the AT&T CEO spends his nights
lying awake regretting that he could have screwed his customers even harder.

Can imagine him holding back sobs as he considers how he might even have held
back the future for 2, 3 more years and squeezed a few more dollars out of
10000% markups on SMS, charging by the kilobyte for data and restricting
access to only approved apps/websites. Poor guy, you can tell it's going to
haunt him.

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kiba
When something is disrupting your business model, move as fast as you can.

You'll have nothing to worry about but finding a new job after your company
fail due to competitive pressure.

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kbatten
I would be fine with a data transfer cap, if it scaled with technology or
time. However looking at my internet provider, I have not seen an increase in
the data cap since it was implemented. Meanwhile both services and
technological capability have increased.

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rhizome
A CEO publicizing regret over a business decision? Hold on to your wallets,
iPhone users.

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Deamos
I voice regret of actually using AT&T.

