AT&T has announced a new set of data plans, starting Monday, for smartphones and tablets (read: iPads) that appear to come cheaper than current plans.
Although the changes might leave some people scratching their heads, I see more to like than dislike--such as iPhone tethering.
Tethering, which allows a laptop to connect to the Internet via a phone's 3G connection, will be available with the new data plans as soon as Apple releases iPhone OS 4 this summer, AT&T said in its Wednesday announcement. Tethering will cost an extra $20 and won't work with existing iPhone data plans; it will need to be added onto the new, lower-priced plans.
Monday, by the way, is also the first day of Apple's Worldwide Developers Conference and the day that Apple CEO Steve Jobs is scheduled to give a keynote address.
The main difference between AT&T's new plans and the old is that the word "unlimited" is now gone, which at first sounds like bad news. But the unlimited plans, like many other broadband plans, had murky, inscrutable limits.
There are stories of people being charged for going over a certain amount of data without knowing what that limit was, which doesn't make the "unlimited" plans unlimited. To curb this, the just-announced plans give a new declared limit on how much data one gets for the money, fairly inexpensive options for those who go over, and tools for keeping tabs on data usage.
The pair of plans work with any smartphone that AT&T sells, including the iPhone.
The low-end plan, DataPlus, includes 200MB of data for $15 a month. If the 200MB limit is exceeded, another 200MB block is added on for $15. This continues for as much data as is used.
The high-end plan, DataPro, includes 2GB of data--10 times more than DataPlus--for $25. When the 2GB threshold is reached, another 1GB can be tacked on for $10. Each 1GB after that is $10, as much as is used. That's far better than the old overage rate of $100 per GB, or 10 cents per MB.
New iPad customers, who buy an iPad 3G starting Monday, can get the same $25 per month 2GB plan as iPhone users. Unlike iPhone users, iPad customers will still prepay for their wireless data plan with no contract. Existing iPad customers who have the $29.99 per month unlimited plan can keep that plan or switch to the new $25 per month plan with 2GB of data.
AT&T said it's trying to avoid surprises on people's bill. Before a limit is reached, customers will receive a free text message warning that they're about to hit the turnstile to the next billing level, so they can settle things down if needed. AT&T also offers a free app, MyWireless, for many of its devices, that displays the current data usage in real time.
iPhone users will note that the $25 plan is $5 less than the current iPhone data plan. AT&T says 98 percent of its smartphone users--including iPhone users--use less than 2GB a month. For many iPhone users, saving $5 a month by not paying for data they don't use is a good thing.
But nobody will be forced to switch. If people are happy with their current plan, they can keep it, which I expect many to do. In fact, AT&T says that people "are not required to switch to the new plans if they renew their contract or switch to another smartphone. However, if they switch to one of the new plans, they will not be able to go back to their old, unlimited plan." The only downside is that legacy iPhone plans won't get tethering, so there are some things to consider for some.
Besides 3G data, users of the new plans will have free access to any of AT&T's 20,000 nationwide Wi-Fi hotspots, which is about par.
That said, already I can see the comments surfacing: this is about throttling bandwidth, and this is about giving less for the same amount of money.
But I see a lot of good here: the majority of current smartphone users will be able to reduce their monthly bill without seeing any impact on their day-to-day usage. First-time smartphone users will be able to get a usable 3G data plan for $15 a month. And hardcore users can, if they choose, go on using their handsets just as they have without changing anything.
It's good to see AT&T getting more aggressive on data. And it's good to see the company clearing up the usage issues that have been a point of contention for some.