The coming Mobile Data plan shake up
There has been a lot of talk about a shake-up in the mobile data carrier space: "T-Mobile drops its data plan cap", "AT&T initiates a tiered pricing model for data", "Verizon raises its early termination fees".
Frankly, the discussions have been nothing but "Smoke and Mirrors", avoiding the real issues. Consumers are watching and ultimately there will be a consumer backlash. It just takes one company - my money is on Google, to offer a real pricing alternative and then the carriers are going to be crying for government protection.
Why the current model is wrong.
The current model is fine for the carriers who, in typical fashion are trying to ensure that they leave no consumer dollars on the table. The model is ridiculous for the consumer. Let's take a hypothetical consumer "Sandy G". Sandy pays for carrier internet service at home for approximately $40.00 per month. Sandy G has a "smart" cell phone which comes with a mandatory data plan that adds about $40.00 per month (data plan plus taxes and fees) to her cell phone bill. Sandy buys a 3G enabled tablet computer which costs her (you guessed it) about $40.00 per month for the 3G service data plan. Sandy is now, for arguments sake, paying the same carrier approximately $120.00 per month for her internet service across all three access points. Even if we ignore the contract lock-in effect essentially every 3G device that Sandy adds means another $40.00 per month "service fee" to her internet carrier. If Sandy G is married and if there are cell-phone owning children as well then you can see how the carrier can sell the "G's" the same service over and over again.
What's the alternative?
The alternative is actually pretty simple - the 3G service SHOULD be licensed to the consumer NOT to the device. For most normal use cases we consumers are only using one device at a time anyway so why are we paying for service access fees for every device whether or not we are actually using them? The device manufacturers go along with this either because they are afraid of open competition or because the carriers throw them huge amounts of "subsidy" money to keep the devices at artificially high list prices rather than the more reasonable market prices that are usually associated with electronic devices.
Sounds complicated to implement.
Not really, the technology to implement this is decades old. For example, the device pictured above is an RSA or Secure-ID key. It comes in a number of form factors from key fob to credit card and there are even pure 'software token', options. The hardware devices just plain work, I have one that is still running without ever changing its battery, that is now about five years old. The key code that is generated must be typed in by the user when trying to access a network service. The key code can be used in conjunction with an id and password as well but the point is that you are now authenticating am individual rather than a device for access to the resource. This is just one example - the point is that it will just take one carrier to initiate per user rather than per device service licensing to affect a real shake-up in the mobile data space. I say, bring it on! What are your thoughts?.