Popular Mechanics Attempts to Defend AT&T’s New Pricing, Fails Miserably
In a recent post entitled “In Defense of AT&T’s New Utility Pricing System” by Glenn Derene of Popular Mechanics, Derene attempts to explain why AT&T did the right thing with its changed data pricing model. And while the article is supposed to be “in defense” of AT&T’s new pricing model, Derene spends more time criticizing it than defending it.
Derene starts off with by saying, “I agree that some aspects of AT&T’s pricing plan are unfair and even nonsensical.” He then continues to explain what we’ve said here before about the ridiculous tethering fee. “For example, charging an extra $20 a month for tethering, on top of an existing data plan, means that you are essentially paying twice for the same data usage,” says Derene. Later in the story he adds, “Frankly, I think AT&T’s current move into utility pricing is irritatingly halfhearted.”
Described as nonsensical and irritating, just where is this defense the headline promised? It’s found later in the article in a paragraph explaining what Derene means by “utility pricing”:
It’s called utility pricing, and the best way to understand why it works better is to look at a sector where it is already the norm: electricity. Imagine, for a moment, if we bought electricity the way we buy data in this country. Every month, you would pay a fixed amount of money (say, $120), and then you would use as much electricity as you wanted, with an incentive to use as much as you could. That brings price stability to the end user, but it’s a horrible way to manage electricity load.
For the record, Derene, I don’t pay my electric company $100 for electricity regardless of what I use. I pay my electric company for what I use and only what I use. Same with my gas and water.
Another interesting point against AT&T, Derene mentions that according to AT&T’s own statistics only a few iPhone users are actually “gorging” data. If that’s true, then why does AT&T need to switch to this “utility pricing” model? If everything AT&T — and now Popular Mechanics — is telling us is true, AT&T is giving us 2GB because we don’t really use that much, and they are making it cheaper to boot. Yeah, right.
Regardless, Derene is missing a huge point here: AT&T is reneging on something they already promised. AT&T told us we would get unlimited bandwidth on our iPhones, and while we can retain our current plan if we already have an iPhone, we can’t get tethering at any price if we choose to keep it. Steve Jobs introduced the iPad as a revolutionary device with a revolutionary data plan. The iPad 3G has been available for only one month, and the data plan we were all promised is no longer available. That is what has people so upset.