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AT&T Not Ready for Tethering, May Throttle iPhone Data

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We reported here on Tuesday that AT&T (s t) had announced plans to make VoIP services available on its 3G network, great news for iPhone (s aapl) users who previously could only use applications like Skype and Vonage via a Wi-Fi network. So, AT&T sorted out MMS and now it’s sorted out VoIP. That just leaves tethering, right? Now that it’s upgrading its network and fixing everything that was wrong for iPhone customers, tethering has to be just around the corner, yes?

No. According to an article from the Wall Street Journal, an AT&T spokesperson says it needs more time to work on that functionality:

Whenever we offer new features, we want to offer the best possible customer experience. For tethering, we need to do some additional fine tuning to our systems and networks so that we do deliver a great experience.

So I won’t mention how, late last year at the Web 2.0 Summit, AT&T CEO Ralph de la Vega told Michael Arrington that tethering would be available “soon.”

Clearly AT&T is struggling to cope with the data demands made by modern smartphones on its creaky old network. Speaking this week at the annual CTIA Conference in San Diego, and reported by PC World, de la Vega hinted at possible future steps the telecom giant may take to lessen the load. “We have to manage the network to make sure that the few cannot crowd out the many,” he said.

PC World’s Mark Sullivan thinks this can only mean one thing: placing hard limits on the total amount of data iPhone (and other bandwidth-hungry smartphone) owners can consume.

In the face of exploding data service demand and scarce wireless spectrum, does AT&T intend to quietly begin rationing the data usage of bandwidth hogs like the iPhone? Will AT&T begin to quietly “manage” the duration and speed of my 3G connection based on how much data I’ve used in a given day, or on the type of content or services I’m using the bandwidth to access?

AT&T announced in September that it was working on upgrading its network, but the process will take time. Is throttling data a necessary solution in the short term, until the network can more adequately meet the demands of the (growing) smartphone market?

In an article yesterday on All Things Digital, John Paczkowski reported that a staggering 4.1 billion text messages are sent every single day in the U.S. (740 billion in the first half of 2009 alone). That’s double the number in the same period last year.

According to the CTIA, there are more than 246 million wireless data-capable devices at large in the U.S. today. Of these, 40 million are smart phones or PDAs, and more than 10 million are laptops. Little wonder that wireless data service revenue rose 31 percent to more than $19.4 billion in the first six months of 2009.

Chart from CTIA
Chart from CTIA

It’s not hard to see that AT&T is behind the curve when it comes to bolstering its data network to meet the demand of its customers. So far behind the curve, in fact, that its competitors can afford to take legitimate shots at the company in television commercials.

So what’s the solution for long-suffering iPhone customers? Jumping ship and moving to Verizon (s vz)? Or remaining loyal to AT&T, avoiding the hassle of changing contracts and giving the company time to improve its network and expand its services? It’s already had the better part of three years. How much more patience will customers have?

15 Responses to “AT&T Not Ready for Tethering, May Throttle iPhone Data”

  1. I read the forums and all I see are inarticulate people that can’t seem to find their spell checker! If you are so unhappy and disgusted with ATT why not go to one of the other “BETTER” services.
    Sprint–Had them 7 years ago, I can’t remember any call that I made on their great service that didn’t get dropped. In their defense it “may” have changed since! Traveling across the country, there where many areas that had no service.
    T-Mobile–tried them for 2 months, Paid to get out of the contract! Complained enough that they did give me a refund.
    Verizon—If they had the Iphone I would be using them. Humm, Maybe not I just remembered the new adds they are running that show a map with “all that service”! Not true unless they are using ATT towers!
    As far as 3G service, do you really expect it in the boondocks! I don’t, be realistic, would you put a tower 40 miles from nowhere? Some of the people on here sound like they are 10 years old! Have a great day!!
    Bob G.

  2. I signed up for AT&T a year ago, being told no roaming charges and unlimited usage. Now, AT&T is telling me that basically I am roaming too much and if I don’t knock it off I will be shut off from roaming, what they refer to as “off-network,” within 30 days. Interestingly, in their lawsuit with Verizon, AT&T alleges “[E]mphatically, therefore, AT&T customers are in no manner without coverage when they are outside of AT&T’s depicted coverage area.” I guess this is sort of correct, I have coverage, as long as I don’t continue to use my phone in these areas. Which begs the question, what good is the coverage if you can’t use the phone?

  3. SunnyGuy53

    In AT&T’s defense, our area just got 3G (finally) this month, and so far the bandwidth is great — it seems better than my 11n WiFi, if that’s possible.

    I’m in Champaign-Urbana, IL. Population around 100K. So there’s hope.

    Sunny Guy

  4. The whole “network is not ready” thing is a red herring. They will gladly sell you a separate device to plug into your PC to provide the exact same service. They will sell you other smart phones that tether. They will sell you an iphone that can do video and audio streaming. So the problem can’t be the wireless side. They let you use their WI-FI hotspots as much as you want, so it’s not the backend of the networks.

    The only possible reason for delaying is that they are trying to figure out how to charge more when there are already contracts in place that provide “unlimited” data. Is there a way to do something about that? Probably not. Greed is not illegal.

  5. Dishonest

    Its all a bunch of digital packets! Some with higher priority than others. Texting is way over priced, it is not a high priority like voice service and it uses very little bandwidth. Has any one determined how much bandwidth a mobile phone call requires? compare this to how much bandwidth does an average (?) webpage consume? I think ATT is being dishonest. Actually, I think that the carriers need to be separated into services, and all carriers pitch in to upgrade the technologies as needed. This hodgepodge system of incompatible radio technologies locks out/in as customers. I could go on, but i’ll spare you.

  6. The iPhone is GSM so you can’t just jump to Verizon. The only US alternative is T-Mobile, and I can tell you as a former T-Mobile customer that AT&T is doing okay.

    I would hate to have the iPhone go away from GSM because it would no longer be a world phone.

    • Good for you MacRat. We were T-M customers for 10 years too, but in our area the service was 1 or 2 bars, and my wife never got a signal at her office. I used a Treo more as a PDA than as a phone so it was okay. I used it for tethering a couple of times and it was not hard to set up (on a Mac, that is) but was slow.

      I know AT&T has a lot of detractors, but in my area (Dallas) they have good service. And my wife gets a signal at her office!

  7. They have most iPhone customers hostage, since they have the exclusive service agreement with Apple. I would wish that Apple would buy AT&T and set that sinking ship right. If iPhone customers could leave and take their device with them, that would be the end of AT&T. They know that and so does everyone else including Verizion and Apple. I was a Verizion customer for 14 yrs. left to get an iPhone about a year ago, and my bill went up, my service went down. IMHO.