ATT Chief: Expect Sharply Higher Data Usage, Wireless Firm Mergers

Cecilia Kang, who writes the Washington Post's technology blog, contributed an interesting post in this morning's online edition. The item featured comments from AT&T chief executive Randall Stephenson on the state of the wireless business.

One assertion Stephenson made caught my eye: "data usage will increase 75 percent every year for the next five years." That's an incredible statistic. That claim suggests the demands on bandwidth will be profound, and even hints at a looming bandwidth availability crisis. One way corporations settle these supply and demand issues is to raise prices, with tiered pricing being a rather obvious approach.

The financial price of bandwidth usage continues to unfold, generally into increasingly higher ranges. While the "haves" won't care about higher rates, the "have-nots" certainly will. Institutions are likely to "pass along" increased costs to their end users. If you're attending a school, working in a hospital, or rely on mobile devices for business, that's not good news at all.

Think of this situation as a storm slowly moving toward your region. It doesn't come today, and it might not come tomorrow, but it will come. While one can hope the storm will not be a strong one, I'm not optimistic about that notion, especially if Mitt "let the markets operate freely" Romney becomes the 45th president of the United States.

Three Christmas Eve Stealth Stories: GE Bid-Rigging, ATT Spectrum Bonanza, NFL TV Deals' Financial Impact on Fans

Saturdays have historically been a day for backdoor news. These stories typically involve unflattering stories about institutions, such as legal settlements, forced executive retirements, unpopular government actions, or poor corporate performance. Consequently, I make it a point to carefully read Saturday news stories.

This year, Saturday doubles down with Christmas Eve to create a nearly ideal "hidden news" environment. There are plenty of gifts under the holiday news tree today. Here are some examples:

*  GE settles SEC probe into municipal bond bid rigging. The Bloomberg News story provides the unsavory details. (The official SEC press release provides more details on the matter.) Remember when GE was considered the gold standard for corporate performance and behavior? The former "AAA" firm is now just another TBTF enterprise lusting for Federal corporate welfare. GE's saving grace is that it actually manufactures useful products, such as jet engines.

*  ATT gets final FCC approval for $1.93 billion purchase of Qualcomm spectrum. This is a great deal for ATT, and one hell of a consolation prize for ATT, in light of its highly public, abandoned bid for T-Mobile. The big losers in this deal are rural telephone providers, as Bloomberg News noted in its story on the ATT coup. The FCC originally recommended approving the deal on November 22nd, which just happened to be the beginning of the Thanksgiving holiday period.

* According to a Los Angeles Times blog post, the NFL's new and highly lucrative television deals could impact consumers with higher cable TV bills. The deals also threaten smaller cable distributors that don't offer a steady diet of pro sports. I find the fees for sports packages outrageously expensive. I stopped subscribing to them long ago, and as a result annually keep five hundred dollars for other purposes. And no, I don't spend the saved money on tickets to ball games. Do you really feel good spending hundreds of dollars for a nothing special seat at any pro sports event?

ATT Announces Plan to Slow Data Speeds for "Top 5%" of Data Users On its "Unlimited" Access Plan

Earlier this week, ATT released a statement which declared that its "top 5%" of data users in its unlimited mobile data access plan would slow those customers' broadband speeds. The duopolist characterized this corporate policy as a way to manage what ATT claimed was "exploding demand for mobile data." The story has appeared in many major news outlets; the LA Times link is reasonably succinct version of the announcement and its implications.

For some time, it has been evident that rationing of broadband access, via tiered access plans, was in the works. ATT is hardly the only interested party in this scenario. The other member of America's unloved mobile telephone duopoly, Verizon, has skin in this game. So does Sprint, which ATT wants to gobble up. The cast of usual suspects expands if one counts the cable TV distributors.

The financial stakes for consumers, distributors, and content providers are profound. Consumers are being set up to swallow the notion of eye-popping mobile phone service bills. For example, some users who send infinite numbers of stupid "Here We Are" mobile phone photos to their friends will soon pay extra for the privilege. Small businesses advertising via YouTube videos will be pegged in the 5% crowd, and be compelled to move into expensive, often annoying enterprise plans. Institutions such as K-12 schools, which have regarded the Internet and mobile phones as their panacea for the so-called "education crisis," will be made-to-order for captive, high rate schedules. Meanwhile, the duopolists, through its management of an allegedly finite spectrum, can charge "market rates". And why would a duopolist stop at a mere 5% of "heavy" data users? Why not 10%? Or 20%? Also, by not establishing a line in the data sand (say, 100 GB), the telephone companies establish a moving, monthly target left undefined for consumers, until the unlucky user crosses an invisible line of violation.

ATT' s announcement notes how the firm would send usage warnings to those nearing the undefined area of "too much." Would you feel any comfort from that arrangement?

Finally, ATT's statement does note one goal of this initiative. It plainly asserts the company currently lacks sufficient spectrum to manage its customers' anticipated demand. For that reason, ATT reiterated its desire for the federal government to approve its merger with Sprint and its valuable spectrum range.

Whether or not ATT gets its way with the Sprint deal, this week's announcement casts a bit of a dark cloud over the euphoria regarding mobile phones, endless applications for them (and tablets), and seemingly unlimited access. We may soon see a class system developing in the mobile data world, and it may very well resemble the financial one that has ironically diminished our citizens' social mobility.