Up until now, US cellular data has been the most expensive broadband in the world. They have been selling a gigabyte of download for $10. There are numerous ISPs that will let people download a terabyte of data for between $60 and $120 per month, and that makes cellular data between 80 and 160 times more expensive than landline data.
It’s really impossible to blame this gigantic pricing difference on anything other than greed. Looking back five years ago the cellular companies claimed the high prices were due mostly to a desire to protect their cell sites from being swamped with data usage. Perhaps back when cell sites used traditional TDS backhaul (DS3s mostly), there might have been some truth to this. But today most cell sites have fiber Ethernet backhaul of gigabit or greater capacity.
This change seemed inevitable. The cellular companies have all started offering zero-rated plans where they offer some content (often their own) on an unlimited basis while still counting other content against their stingy data caps. That stark contrast pointed out the hypocrisy of their pricing. And while the current FCC is backing away from enforcing these kinds of net neutrality issues – the price contrast is so large that it might have brought eventual scrutiny from Congress during any Telecom Act re-write.
Possibly the biggest impact of this change is that it’s going to change how people use cellphones and other mobile devices like tablets and laptops. Cellphone data speeds in the US are not the best in the world, but they are good enough in most places to be able to watch a single video stream. It’s not much of a stretch of the imagination to foresee wide usage of apps that will use cellphones to capture and transfer video images to televisions. And that could make cellular data an economic substitute for landline broadband.
There is already a lot of talk about younger people preferring cellular data to landline data – mostly due to the mobility aspect. But this has largely meant that cell phone users had to stay close to WiFi most of the time in order to avoid large cellular bills. But unlimited data plans will free users to go anywhere there is a strong enough cell signal to get the connection speeds they need. Over time this could lead to an erosion of landline broadband connections, where households that have unlimited cellular data will find that to be good enough.
The upside to this, though, might be that poorer households might finally get better access to the Internet. Until now, unless a user was able to sit at home behind a landline WiFi signal, cellular data has been too expensive to use in urban areas for things like homework. Since most people now see a cellphone as mandatory to daily life, poorer households will probably be able to get by with only a cellular data plan. This might be the last nail in the coffin for urban DSL.
This change will really make a difference in rural America. I have heard from many rural households that use their cellphone data plan for their household broadband and it’s not unusual to hear of families with schoolkids spending $500 or more per month for totally inadequate cellular broadband. These households are going to be relieved to be able to buy a $100 unlimited plan instead.
Of course, in a lot of rural America there is not the same kind of cellular service that those in cities take for granted. There are very few rural places that have more than one major cellphone carrier with decent signal. And there are a lot of rural households that live too far from a cell tower to get decent cellular speeds. But unlimited plans will probably be a good band-aid to cover for the lack of affordable broadband for millions of rural homes. It won’t be too many years when this won’t be enough speed, but for today cellular broadband is a whole lot better than no broadband.
We’ll have to wait a bit to see if these plans really are unlimited, and what it means if they aren’t. Obviously the plans will be a lot less useful if they somehow preclude tethering. But however they are priced, we are probably not going backwards to the day when your $60 cell plan includes 2 gigabytes of download with every additional gigabyte costing an additional $10. Teens ten years from now will think anybody who remembers being careful how we used our cellphones is an ancient dinosaur!