TeleTalk: Tethering and Contracts

We’ve seen the stories circulating around about carriers throttling your data, even though you might have an unlimited plan. What is fair about this? Are you to blame for the carriers’ networks not being able to deliver what you pay for? Do the carriers have the right to slow down “abusers”? Is it ethical for carriers to call a data plan unlimited when they are just going to “limit” or slow down your connection after a certain amount? The answer to most of these questions isn’t as simple as it may seem.

Many years ago, tethering was a non-issue for carriers. People did not use much data on their mobile devices, tethering only got you EDGE data speeds at most, and only a handful of handsets even supported tethering. Mobile e-mail was the most common thing using the tethering feature. Since the average text-based e-mail was around 5KB, there was little incentive to force customers to pay extra for this service. They could simply wait until they got home, since it was seen as a luxury then.

Skip ahead a couple of years to the iPhone’s launch. 3G was a reality now, even though the smartphone leading the charge did not support it. Manufacturers needed ways to compete with the iPhone. Tethering was one of those ways. Tethering on a 3G network allowed for better data speeds more suited to surfing the Internet in full scale. This also sparked the carriers’ imaginations as a way to generate additional revenue. Carriers believed that every device you own should have a separate but equally high bill to accompany its Internet usage, even though some of them are not equipped to make their own connection.

You see, tablets and laptops normally don’t have their own cellular radio built in. They usually rely on their WiFi radios to get them connected. Modern smartphones now have a feature called wireless tethering, which allows your phone to act as a WiFi router when seen by the tablet or laptop. In this manner you are able to share the Internet connection with another device on the go. Even though they are both able to access the Internet, there is only one actual connection to the network – through your phone.

This is where the problem comes in. Carriers want you to pay per device, not per connection. Even though it makes perfect sense to us that you only have one connection and should only be charged for that, they do not see it that way. They wish to charge for every bit you send or receive. This is why it normally costs around $50 -$60 for a data plan with tethering. Seems a bit steep, right? I agree.

Some carriers have begun throttling users on older unlimited data plans. Throttling simply means that they slow down your connection speed to something lower than their maximum. This normally means slowing you down from 3G/4G to EDGE. It seems a bit sketchy to me, seeing as these people on these plans never signed up with that stipulation. AT&T just lost a lawsuit on this topic earlier this year.

T-Mobile, however, has recently been doing something new with their data plans. They sign up new customers on this type of plan from the get go. They a lot you 2-5GB of data at full 3G/4G speed. Once you pass that mark, you are slowed down to EDGE speeds, but you still have data access with no overages. This slower connection is still perfectly fine for normal web browsing, Facebook or Twitter updates, and browsing your favorite online forum. Just don’t expect to stream Netflix or High Quality music files. Low quality music streaming via Last.fm and Google Play Music, in my personal use, works just fine.

Now, this isn’t to say that it’s all the fault of the carriers. There is a good bit of truth to their claims that bandwidth hogs can slow down a connection for everyone in a given area. If someone is negatively impacting my connection, or that of those around me, I’m all for slowing him down. Just don’t group everyone together under that banner just because their plan has the word “Unlimited” in it (I’m looking at you, AT&T).

I firmly believe that there is a happy medium we can reach in this. If I were them, I would take a page from the traditional ISPs and charge a varying rate depending on the data speed you want. No matter which you choose, it’s still unlimited data. This would let you get a super slow connection if you only ever want to check e-mail for around $5 per month. If you want to be able to browse a bit faster and make use of your connection, but don’t really stream movies or music, you could opt for a faster EGDE connection speed at maybe $10 per month. Want 3G speeds; how about $20 a month? 4G speeds could be super charged to the $40 per month mark. This gives it a more premium feel to it, and generates more revenue for the carriers due to this tiered pricing plan. You pick the speed you want.

People who don’t normally opt for a data plan could be drawn in by the super cheap $5 plan. When they realize they like it, but want to do more, you double your money and still produce little detrimental effect to the network, since they aren’t using the most bandwidth. Those who want the fastest speeds get to pay more for that premium service. People who don’t normally opt for a data plan could be drawn in by the super cheap entry level plans. It’s a profitable business model for them, so why couldn’t it be applied to our mobile data as well?