Wireless Data Reform

Posted on 08. Dec, 2015 by in Mobile, Technology

In 2013 consumers in North America used an average of 1.3GB of data per month. In 2018 consumers are expected to be using 9GB of data per month, an 11-fold increase in usage over 5 years before. Consumers are increasingly using their mobile devices for more of their daily activities every year and unfortunately this increased data usage is not changing to reflect these usage patters. Consumers are constantly facing increasing costs for using their increasingly powerful devices to consume ever more rich content at an constantly increasing cost. While this issue could be simplified to calling out wireless companies for overcharging customers, the actual solution is sightly more complex. What is actually needed is a complete overall of the way customers and wireless companies think about, interact with, and bill for, the use of wireless data. Three of the main reforms that would help wireless adoption and usage transition towards future usage patterns are soft caps, speed-based billing, and net neutrality.

Net Neutrality is the technological concept where data or communication service providers treat all network traffic, regardless of owner, origin, or destination, equally. The importance of this ideal is fundamental to the developmental history of the internet, and its future strength and prosperity. Net Neutrality has a serious implication for wireless services due the the heavily restricted data usage policies many carriers currently impose on their user. Wireless carriers have made attempts to sidestep their own restrictive data policies to provide customers access certain data services outside the standard caps their customers are facing. While this policy is wrong for numerous reasons, it is of concern in the wireless space because while the data being exempted may be hosted on the wireless carriers internal servers, the bottleneck of the system is at the tower-customer point, and not between the carriers internal network and the rest of the internet. This is often due to the large number of people connecting to a single tower sharing a limited amount of available wireless spectrum. The fiber or microwave backhaul networks on the other hand have much greater capacity than the wireless antenna’s they are connecting customers through, and have a very low marginal cost. As the bottleneck of the system is the last connection to the user then there is no reasonable argument for exempting any traffic considering it all contributes to the congestion. Not only will maintaining Net Neutrality help with the continued prosperity of the internet but if carriers really want to give customers easier and cheaper access to services then they should stop trying to circumvent their own data limitations and consider some of the reforms outlined bellow as ways to reach consumers.

The idea of soft caps is not new in the wireless industry as carriers throughout Canada and the US have been using them for at least five years. In many cases soft caps are used in conjunction with unlimited data plans where customers have access to a certain amount of data at the full speed of the network, after which they will be artificially throttled to keep the congestion of the network to a minimum. This billing method has numerous advantages over existing systems for those on both unlimited and fixed amount data plans. Soft caps allow customers to stay connected even when they use lots (or all) of their data allotment. Carriers also benefit under this system as soft caps help eliminate the burden on their network caused by the heaviest user while still managing to keep all customers connected. The main reason that many carriers are reluctant to implement such a system is due to the lucrative revenue from obscene data overage charges and opt-in data cut-offs. If wireless carrier are serious about wanting their customers to make full use of their devices as we continue into the 21st century then carriers need to do their part in paving the way for customers to make full use of their devices.

While soft caps are an agreeable short term solution to unreasonable data charges, they still fail to fully address the issue of reforming the billing structure of wireless data in such a way as to scale with current and predicted use. A very simple, and extensively tested, alternative billing structure could be what is currently used by broadband internet service providers. This system uses a speed-tiered billing structure where customers choose the speed at which they would like to access the network rather than how much access they would like. Customers would pay for a connection that is metered not through the amount they use, but the speed at which they access it. Those who would like higher priority access to the network would pay a premium for the service while those looking to connect on a budget would opt for a slower tier that taxes the available bandwidth less. This system is a much more scalable alternative to soft caps as it provides a less costly way to deal with the ever-growing demand for wireless data without tying the pricing structure in any way to the ever-increasing data usage. This is possible because the speed at which customers access the data, while important, is often not nearly as crucial as actually having a connection at all.

It is crucial that changes in usage patterns of wireless users are reflected in changes made to the usage/payment structure used by the industry. With these changes carriers are able to provide a better value to customers, businesses have access to a wider range of customers who are less worried about using up their data allowance, and customers are able to continue making full use of their mobile devices.

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