Because of uncertainty with our current social and economic situation, oil prices have been rising steadily, which we’re seeing at the gas pump. But gas isn’t the only cost we’ll be paying for in the near future — bandwidth and data rates are exploding too.
Only several years ago, it was perfectly normal to go to your Internet service provider and be offered a very reasonable, unlimited-use Internet plan. Now, places around the world, even as close as Canada, are removing their unlimited plans because they can’t actually afford “heavy users.”
Only a few years ago, a gigabyte was a large amount of storage, movies came on DVDs and “the cloud” was more of a concept than a business plan.
Companies like Napster, in the wake of its legal woes, and Rhapsody arguably were some of the earliest major streaming services. Intermittently, Hulu, Apple and Google T.V. have entered the market and begun streaming massive amounts of data.
It’s a more successful business plan for firms and much more convenient for customers. But for Internet services providers, it’s a nightmare.
Internet usage actually costs providers a quantifiable amount of money to provide making it more like electricity usage. The more we use our “unlimited plan,” the less money they make. Electric companies, possibly more savvy than the nerdy Internet-provider companies, never offered unlimited electricity plans, though it could feasibly work the same, given a high enough price for the “unlimited” plan.
AT&T no longer offers unlimited data plans for mobile phones. This change is becoming troublesome for services like Netflix’s video streaming, which can eat up a month’s worth of data in just a few days.
Prices for AT&T’s mobile data now range from a ridiculous $15 for 200 megabytes of data to a whopping $45 for four gigabytes of data, and it’s only going to get worse.
AT&T’s website claims 65 percent of its smart-phone users need less than 200 megabytes of data per month, which means many people paying for the higher-priced, but better value, plans are unnecessarily paying excessively high prices. This gap is where companies like AT&T make extra cash.
But with services like Apple’s new iCloud and the advent of streaming on a large basis for nearly all our media, customers will begin to use more data — thinning profit margins for providers. Thus the pricing game begins.
Companies will raise prices as high as they can, but they have to be careful. If prices go too high, legal trouble may ensue.
Customers may also look to alternative sources for their services, as is the case of several apps for the iPhone and Android that allow users to send and receive text messages while avoiding the insanely high prices.
If AT&T’s proposed merger with T-Mobile goes through — and we should all hope it doesn’t — expect prices to get even worse. T-Mobile is one of the last brave providers to offer unlimited data on a mobile plan. If they merge with AT&T, I wouldn’t hold my breath for their unlimited plan to continue.
Simply put, we’ve enjoyed the fruits of unlimited data for some time now, but only because providers were assured all but the most tech-savvy among us could use very little bandwidth. Now, with file sizes constantly increasing, even soccer moms are making providers nervous, and prices are going up accordingly.
Unlimited data, both for our homes and our phones, will likely end in the next few years. Until then, enjoy all the lol catz and videos of skateboarding accidents your heart can handle.
Devin Graham is a 22-year-old economics senior from Prairieville. Follow him on Twitter @TDR_Dgraham.
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Contact Devin Graham at [email protected]