Wednesday, July 23, 2008

Evolution of Data Plan Billing

Summary: the big three have moved away from unlimited data, towards limited data.

It is interesting - I once (as in last year) had a talk with a potential partner who'd been at some European conference and was convinced the world was on the verge of low-cost (sub-$20/month) unlimited cellular data plans. We were discussing the creation of report-by-exception tools to reduce SCADA costs, and this partner's strong faith in this belief caused them to eventually bail out of the talks, saying "In a year or two, no SCADA company will care about how much cellular data they use."

Yet as of the summer of 2008 the world of cellular data is moving in the opposite direction. Last year the big three (AT&T/Sprint/Verizon) offered "Unlimited Data" for personal users with the Service Terms listing a VERY narrow list of permitted activities - mainly email and web browsing, with many common things like file download/upload, media-streaming prohibited. So when ever one of the big three would cut off a user for moving too much data on an "unlimited plan", the service provider would fall back on the "You are doing prohibitted things, thus impacting our network, thus take your business elsewhere". What a way to cause bad feelings, eh? Note that this change is CONSUMER plans - machine-to-machine have always been limited, priced by the MB/month without rollover, plus with charges for data overages.

Now all three have dropped the price from the $80/month range down to $60/month range ... but added a hard limit of 5GB per month. Isn't free & vigorous market competition wonderful?

Sounds reasonable - 5,000 megabytes of data is a lot, yet this doesn't mean 5GB of data transfer. It means 5GB of metered activity, with many activities I've studied including up to 95% overhead. Thus someone only moving 20-30MB of real data in small packets per month might hit pretty close to their 5GB limit! My experience with normal wide-area-network traffic hints that a real PC user doing simple email and web-browsing once a day would probably move 1-2GB of data before hitting the 5GB total activity limit.

To paraphrase the wireless data service terms for all three:
  • Data transport is always measured in full kilobytes
  • Actual transport is always rounded up to next full-kilobyte at "end of session"
  • Network overhead and resend requests caused by network errors can increase measured kilobytes.
  • 2 of 3 mention always rounding up to nearest kilobyte every hour period.
  • All warn that you will NOT receive an itemized detail of how your charges are calculated; you will NOT see which services were used or during which time periods the charges were inccurred under.
So if I send a single 50 byte UDP/IP packet, is that a full session and billed as 1024 bytes? Could be under this language since UDP is 'sessionless'.

Hmm, the term session is pretty ambiguous. Perhaps it means per "time you enable your PC-based cellular data card." That seems likely - plus if you left your device on twenty-four hours a day then the once per hour round-up would catch you.

I'm afraid I haven't offered any new answer here, other than to suggest you understand that low-cost unlimited data plans ARE NOT just around the corner ... at best we left them behind last year and I don't foresee them ever returning. I suppose all three now understand that huge new profits are to be made with these 5GB limits, which will cause many "super-salesman" using their cellular data plan daily to spend an extra $50 to $500 in monthly overage charges.

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