AT&T Cites Data Usage Concerns, Verizon Wireless Claims Perfection

WASHINGTON, December 10, 2009 – This week a top AT&T official said the company is considering how to price data usage and looking to make customers more aware of their data usage patterns. Meanwhile, competitor Verizon Wireless claimed to already be ahead of the game on this issue.

Ralph de la Vega, president of AT&T Mobility and Consumer Markets, said in a speech Wednesday that wireless carriers have not announced usage-based pricing yet because of a combination of systems, competition and regulatory issues.

“I think one of the first things that we need to do is we need to educate the customers. And it’s something that customers today have not been used to doing, so we’ve got to get them to understand what represents a megabyte of data,” said Vega.

“[W]hat we’re doing now is we’re improving all of our systems so that we can begin to give customers real-time information about their data usage and begin to get customers educated. And I think longer-term, there’s got to be some sort of a pricing scheme that addresses the usage, but that’s going to be determined by industry competitive factors, regulatory factors and customer. So I can’t give you a prediction, other than our first area of focus is to get the information to the customers so they know their own patterns of usage,” he said.

Vega noted his company did a trail using landline capabilities and found that “customers didn’t know how they where using data, including many parents who didn’t know how their children were using data.” He said when people become more aware of their data usage habits they will reduce their use significantly. “So we are going to look at that and address that first, and then we’ll decide where to go based on the industry competitive pressures and regulatory situations,” added Vega.

Jeffrey Nelson, corporate communications of Verizon Wireless, said his company currently offers real-time data usage information for customers. If a customer exceeds his or her data usage plan, the person pays more.

“Data usage by customers has gone up exponentially over the past few years. The great news for customers is that we anticipated this use and we offer data plans that help manage data use. If a wireless company is surprised by demand, it only means one thing, they did not plan for success. When you don’t plan for success, you fail and that is exactly what we are seeing at AT&T,” said Nelson.

The two companies just dropped lawsuits they filed against each concerning Verizon Wireless’s “There’s a Map for That” campaign. AT&T claimed the ad campaign was false, misleading and damaging. Verizon filed a counter lawsuit. This month Verizon launched a new ad targeting AT&T’s third generation coverage maps as being inadequate against Verizon’s maps.

Comcast said earlier this month that it was launching a data usage meter pilot system in Portland, Oregon, the company plans to soon roll out nationally.

The meter is meant to help make customers aware of how much data they consume in a month, Jason Livingood, executive director of internet systems for Comcast, wrote on a company blog. Comcast has a company policy against excessive use of bandwidth or currently data usage above 250 Gigabytes per month per Comcast high-speed internet residential customer account.

Like AT&T, Comcast said educating customers on how much data they are using often results in less consumption. According to the company, “excessive users consume so much data that the usage could negatively impact the online service for other customers.” If a consumer hogs too much bandwidth Comcast will terminate the individual’s account after one warning has been given.