Jun

iPhone Tethering – Another Epic Failure From AT&T

June 29, 2010 – On Monday June 7, 2010, Apple’s CEO Steve Jobs gave the Keynote address at the World Wide Developers Conference (WWDC) and as expected the new iPhone 4 was introduced. The sexy new hardware coupled with the updated iOS4 operating system made this the HOT gadget to have.

While there are many great new features in the hardware and software update, one that got many excited was Tethering (the ability to use your iPhone as a modem to connect your laptop, iPad or other device to the internet using AT&T’s 3G and EDGE networks). After the announcement I started doing a little research about the tethering feature and contacted AT&T for more details. At that time details were sketchy at best but the general gist was, you would need to be running the new operating system (iOS4) on either the new iPhone 4 or iPhone 3Gs and there would be an additional cost of $20 per month.

Tethering on the iPhone has been possible for quite some time, but in order to do it you had to hack your phone, thus violating Apple’s and AT&T’s terms of service. For the rest of us that wanted to stay within the “law” we had to wait until it was officially supported by AT&T. I didn’t think $20 a month sounded that bad to add the feature, after all we’d probably use more data with a laptop than just the iPhone alone. I was hoping it would be a pay-as-you-go plan where you could purchase tethering right from your phone using your credit card, similar to the data plan on the iPad 3G, but as it turns out this ISN”T the case.

If you purchase a new iPhone 4 and are new to AT&T, you will need to select one of their new data plans:

DataPlus – 200MB of data per month for $15
DataPro – 2GB of data per month for $25

The tethering feature is available in a bundle with the DataPro 2GB data plan for an additional $20 per month (DataPro 2GB + Tethering for $45).

So what if you’re an existing iPhone user and are already paying $30 per month for the unlimited plan? Well the good news is you’re grandfathered in and can keep the unlimited plan with your existing iPhone or if you upgrade to the new iPhone 4. But if you want to add the tethering feature you will have to downgrade your unlimited plan to one of the new bundled data plans losing your unlimited data plan forever. There is NO option to just add tethering to your existing unlimited plan.

The additional $20 per month doesn’t really bother me, after all if you want to play you have to pay. But in order to play you not only have to pay the additional $20, you also have to pay by surrendering your unlimited data plan. In AT&T’s defense they have to put a cap on the data usage, if they don’t those with unlimited plans could potentially abuse the network making for a poor user experience for everyone else. The caps and the fear of overage charges will help to keep data usage in check.

So my question is, what’s the $20 charge for? Based on AT&T’s numbers, 98% of smartphone users use less than 2GB of data per month. This is the reason they changed the data plans and got away from the one size fits all in favor of smaller plans at cheaper prices. So if all of this unlimited bandwidth is going unused then there should be plenty left over for tethering, right? Also if you’re limited to the amount of combined data usage based on the plan you select, why do they need to charge extra? The short answer is, because they can!

Right now AT&T is the exclusive service provider for the iPhone and their terms of service are written so they can make changes to the service whenever they see fit. Are the data caps a good idea? Yes I think so. They should help regulate the burden put on the network. Should there be an option for an unlimited data plan? Absolutely! I would even say, keep the $30 price for the unlimited plan and add in a $20 pay-as-you-go for the additional bandwidth the second device may use. But to take away the unlimited plan just to have tethering, and to charge you an extra $20 a month to do it is just plain wrong!

I firmly believe iPhone users are not typical smartphone users and most likely use more data just because the phone is so easy to use. I would think that for the majority of iPhone users, tethering is not necessary, but since Apple and AT&T made it an official feature there must be enough consumer demand for it. I feel this is just another example of AT&T’s broken promises. Rather than building a robust network with features that consumers want, they penalize them for the benefit of their own bottom line. These types of actions only add to the customers feeling of discontent making them long for the day when the iPhone will be opened to other networks. #FAIL

I’d love to know what you think. Feel free to leave a comment below or let’s talk about it on Facebook or Twitter.

Update: The tethering option is only available with the 2GB data plan and not with the 200MB plan as I had previously written. Thanks to @ItsBrian for pointing out the error.

Update: I found myself in an Apple Store yesterday and was speaking with a store rep about this tethering issue. He informed me that tethering is NOT available on an iPad with Wi-Fi only. Apparently this was an Apple & AT&T decision to encourage people to purchase the more expensive iPad 3G models.

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Categories : Mobile Devices & Apps, News, iPhone & iTouch

http://mikimorophoto.com Richard

If most users only used less than 2gb a month then that isn’t the reason they changed to tiered plans at all, that’s just what they will say is the reason. They tested out tiered plans in test groups last year in an effort to monitor usage more closely so they could properly charge those who used more than 2gb a month. It’s about money in the end, not freeing up bandwidth for users. It’s the same reason cable companies are moving to tiered plans for data usage. They all need more money for building out their networks, respectively.

http://CurrentPhotographer.com Trevor Current

No doubt it’s about the money. AT&T had no problem charging iPhone users a mandatory $30 a month for data since the very first iPhone was introduced. In return they promised unlimited data never expecting customers to use all that much. They knew what their data usage numbers were years ago and if they thought tiered pricing was better for the customers they could have offered it back then but they didn’t. Instead they just kept taking the $30 per month from each iPhone customer whether they were using data or not.

With the introduction of iOS4 with multitasking capabilities, AT&T knew that customers would use much more bandwidth than ever before without even knowing it. Also there must have been enough consumer demand for tethering for them to add it, so the only way they could manage their network and control their bottom line was to put a cap on the data. You can certainly use more than 2GB of data, but you’ll be charged $10 for every 1GB you go over.

AT&T knows these changes are’t for the better of the customer. That’s why they doubled the early termination fees, to hopefully prevent disgruntled customers from bailing out early.

I love my iPhone 3Gs and would love to upgrade to the iPhone 4 but there is no way I will make a new 2 year commitment with AT&T while they’re putting policies like these in place.

http://www.jmg-galleries.com Jim Goldstein

I’d be happy if my phone worked with AT&T. As it is now my phone coverage is the worst it has ever been. It’s a shame such a great product is tied to such a crappy phone company. As for the tethering decision its about dollars and cents. AT&T is hoping the tethering will push people above the data thresholds they’ve set to charge customers more. As it is Apple makes plenty on cell plan referrals with each iphone sale. That in itself subsidizes the overhead costs of the manufacturing & Apple Store experience. The whole relationship between Apple and AT&T is bothersome. I’m surprised that someone hasn’t filed suit yet. It seems anticompetitive to me.

http://CurrentPhotographer.com Trevor Current

Apple and AT&T’s relationship does seem anticompetitive and there have been many talks about filing suit. I think the reason why their hasn’t been a suit yet is because the iPhone market share (although large and growing every day) is still relatively small compared to all the other phones/carriers combined.

I think the other problem is Apple signed a 5 year exclusive with AT&T and I don’t know if they could easily break that contract. That’s why all the rumors about the iPhone going to other carriers seem a little thin. I’m sure if Apple had the ability to expand to other networks they would do it in a heartbeat. Even if they’re making big money with their AT&T deal, I’m sure there is a lot more money to be had working with other carriers.

I heard the rumblings about the poor service where you live and I certainly feel for you. In the New York / New Jersey area where I am, the service is surprisingly good. Verizon is by far the best carrier in my area and I would jump ship in a minute if the iPhone came over but for now I guess I’ll just have to wait.

http://outingmyinnergeek.wordpress.com Wendy Peters

I ended up with a great deal and I love tethering my iPhone. I have a 6GB data plan and my overall cell phone bill is less than $100/month. How is this possible? Well, first off I’m in Canada and when the 3G became available two years ago, there was an enormous uproar at the cost of the plans Rogers was offering up here. In response, Rogers offered a 6GB data plan for an extra $30/month for a limited time after the iPhone 3G was released. No need to change my existing voice plan… just tack on the data plan and away I went.

Last December, I noticed just how little data I was using. In that entire time I had used just over a few gigs, I decided it was time to make the most of my great, cheap data plan and started tethering my laptop. I haven’t looked back. Tethering is awesome. I’ve even managed to use up my entire 6GB a couple of months in a row (thanks to networks offering TV shows online I did away with my cable as well).

My case is definitely a bit of a special one. But when the carriers get the data plans right… tethering is awesome.

http://CurrentPhotographer.com Trevor Current

The 6GB plan that Rogers offered sounds like a pretty good deal. In a conversation I had with an Apple Store rep yesterday, he said that even the Unlimited Plan here is the U.S. is capped at 4GB. Of course the average person wouldn’t know this unless you read all the fine print in the contract.

I was very excited about the possibility of tethering, but looking at the plan AT&T is offering, it just doesn’t make sense to me. If you make the decision to give up your Unlimited plan in favor of the DataPro 2GB plan for $25 per month, then add in the $20 for tethering, you’re already up to $45 per month. Now let’s say we would be capped anyway at 4GB with the Unlimited plan, so we could add in another 2GB of data for $10 per GB and now we are up to $65 per month. You hit the 6GB point a few months in a row, if we were to add in another 2GB for a total of 6GB, we would be looking at $85 per month just for data. Now add in your voice, text, etc. and you’re over $100 per month.

I think you’re exactly right, if the carriers can get the plans priced right, tethering will be a great option.

http://www.josephhoetzl.com Joseph Hoetzl

I’m not sure why consumer’s think wireless data should be so cheap, especially for “unlimited” access. Do I like paying for it, no, who does!? Do I work for a carrier, nope. I am not trying to defend them, and yes, they are making a nice profit, but there are a lot, and I mean a lot of costs that most people over look when they complain about the cost of these plans.

For a start, you have the costs of putting up the towers that provide the signals, the land they sit on, the payments to the municipalities, stores, churches, building owners, the facilities fees, network equipment and cabling too. Throw in the municipalities that make them disguise towers to attempt to look like trees and wow, start adding that up. Beyond that, now your phone can get a signal, but you still need all the internet backbone connectivity which can be in the hundreds of millions of dollars, the servers, routers, data centers, the power and air conditioning, and last but not least, the personel to run and maintain all that.

Bottom line, there are a lot of costs that seem to get forgotten when talking about any, not just AT&T’s pricing plans. Having unlimited plans, when the fiber/copper and equipment can only handle so much throughput is not practical in any networking environment.

What I do fail to understand is why AT&T cares how you use your 250MB, 2GB or “Unlimited 4GB”. Teterhred or not, why do they care how you utilize the bandwidth you are paying for. There is zero differenece in any of the afformentioned equipment or personel needed to use a tethered connection vs. the connection coming from your phone directly. That extra cost for tethering make NO sense.

Regards,
-Joe

http://CurrentPhotographer.com Trevor Current

I’m sure building up a wireless network is very expensive and time consuming for any provider, not just AT&T. After several conversations with different AT&T representatives, they all said “they are working to perfect their 3G network while they work hard to rollout their 4G network” almost as if it came from a script. My takeaway from that statement is, they’re trying to keep their 3G service going and make the experience as good as possible, but they are not expanding their 3G network coverage because they are working on their 4G system. This makes sense to me, after all why invest time and money in an old system when something new will be coming along shortly to replace it.

I agree with your statement that “Having unlimited plans, when the fiber/copper and equipment can only handle so much throughput is not practical in any networking environment.” is absolutely true. One single wireless network can’t handle unlimited data from a rapidly growing smartphone market. The solution would be to open the iPhone up to other carriers and spread the demand over multiple networks. By capping usage to alleviate network demands and then charging overage fees and tethering fees without providing additional service is not right.

If AT&T’s temporary fix is to cap data usage until their 4G network goes live, so be it. I’ll hold tight with my iPhone 3Gs and ride out my contract for the next year. If their network doesn’t improve and their business practices don’t change, I may find myself with an Android phone back on Verizon’s network.

iPhone Tethering – Another Epic Failure From AT&T

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