The Data Divide: The Disconnect Between What Users Need and Carriers Can Provide

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Two recent developments highlight a growing problem in mobile technology. Amid much excitement, Spotify came to the U.S., enabling users to stream music to their smartphones all day long without ever repeating a song. Within a few days of each other, however, Verizon and T-Mobile became the latest carriers to switch to tiered data plans, requiring their customers to pay more for wireless data — the wireless data needed for such services as Spotify.

The use of streaming services of all kinds on smartphones and tablets is increasing in popularity. Another good example besides Spotify is Netflix, which gives users access to a huge array of movies and TV shows for just $8 a month, but uses loads of data. Estimates vary, but it’s somewhere between 300MB and 400 MB an hour over a 3G connection.

From the Editors DeskNetflix is just one of the streaming video services available, and there are even more music options, such as Pandora. Apple itself is coming on board with its iCloud service later this year.

Contrast the growing number of heavy-bandwidth services with Verizon’s least expensive new data plan: 2GB of data transfers a month for $30. This gets is a decent amount for email and web browsing, but it’s inadequate for all those new streaming multimedia services. It’s just 6 hours of watching Netflix, for example, without doing anything else.

Nevertheless, AT&T and T-Mobile, like Verizon, have priced their 2GB plans in such a way as to make them the most attractive choice for most smartphone users… even though these plans aren’t streaming-media friendly. 

The End of Unlimited Service
Just a year or so ago, the situation looked very different. All of the Big Four U.S. carriers — AT&T, Sprint, T-Mobile, and Verizon — offered affordable unlimited data plans. But then a problem arose: more and more services that required loads of bandwidth came along, and most of the carriers decided that it is economically unfeasible to offer people unlimited high-speed cellular-wireless data for a low, flat fee.

Many products get less expensive over time, or at least offer more service for the same price. But this doesn’t work if there’s a limited supply of a commodity. The best example of this is gasoline; as we all know, this gets more expensive all the time. And the capacity of wireless data networks is the same. There’s a limited amount of data that can be sent over them, and because millions of users want to transfer more and more data every year, the prices keep going up. That’s Economics 101.

That’s why three of the top four carriers are in the process of phasing out their unlimited data plans. The sole exception is Sprint, and many analysts believe it will have to follow its rivals at some point.

Wi-Fi to the Rescue
With customers wanting more bandwidth and wireless carriers not able to meet that demand, what’s the solution? Something that’s been around since 2000: Wi-Fi. If they want to frequently use high-bandwidth services, mobile users are going to have to depend on a Wi-Fi network at their home, school, and/or office. 

The only other option for those who can’t afford to pay very high phone bills is to forgo using Pandora, Netflix, and similar services in favor of copying music and video files onto a smartphone to be watched or listened to later — a process that is as old a mobile technology.

No Easy Answers
The super-fast 4G networks that so many people have been looking forward to for years are finally arriving, just in time for them to much less useful than had once been hoped. An extremely fast connection to the Internet is only so much use when someone can use up their entire monthly data allotment in about half an hour.

It’s undoubtedly ironic that one of the solutions for a problem with the latest and greatest smartphones is Wi-Fi, something that was a hot new technology over a decade ago. And the other option is to just store files locally, something people have been doing since before there were cellular-wireless networks at all.

The ubiquitous wireless networks that were first promised back in the 1990s are finally starting to arrive, and they are providing people with much of that they want and need: 24/7 access to email and the Web from sea to shining sea. But those who want more, who want to stream music and video, are being left out in the cold.

Ed Hardy has been Site Editor for Brighthand since 2002, and has been covering the mobile industry for over ten years, starting out with PDAs and transitioning to smartphones over the years. He lives in Atlanta with his family and an undetermined number of cats.




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