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+--- Thread: Can some MBA explain this to me? (/showthread.php?tid=123266)
Can some MBA explain this to me? - Seacrest - 09-08-2011
I don't get justification for the "tethering fee."
It's a monthly fee that covers no real or administrative costs of providing it.
The customer pays for data bandwidth already, it's just that they are using the bandwidth in a particular way.
I think it is analogous to a service station charging you one price per gallon for gasoline to fill up a sports car and a different price for a minivan. IOW -- all things being equal (mileage, grade, location, etc) -- one price to the people driving for one purpose, and another for a different purpose.
Anyone here willing to play devil's advocate and justify this?
Bonus points for explaining how it isn't collusion that all the major carriers charge this useless fee.
Re: Can some MBA explain this to me? - cbelt3 - 09-08-2011
I'll give you a similar situation:
Amos: "Why does your dog lick his nuts ? "
Andy: "Because he CAN !"
The only justification for it is money.
Re: Can some MBA explain this to me? - testcase - 09-08-2011
The few times I can't get a WiFi connection I'd like to be able to tether at 3G speeds for limited use but, I will NOT pay ATT extra to do so. :villagers:
Re: Can some MBA explain this to me? - space-time - 09-08-2011
oligopoly
Re: Can some MBA explain this to me? - RgrF - 09-08-2011
I'm not an MBA even though I may appear one at MS
Third tier countries have better access and internet speeds than the US, unless you live in Canada, Switzerland, Germany, Great Britain, Japan, Sweden, Italy, Morocco, Liechtenstein, Malta or other first world countries.
You can get better connectivity at less cost in Columbia or Chile than you can get in Utah or New Jersey.
Bottom Line is its a bastard child of deregulation and another way to shake money from the tree they once leased but now own. It's all about the dividends and woe betide the CEO who fails to deliver those returns.
Re: Can some MBA explain this to me? - silvarios - 09-08-2011
As a MacBook Air, I would be happy to explain…tethering fees only "made sense" when the data was "unlimited". Companies knew how much data you could reasonably use on a phone, even a smartphone, was much less than a normal computer or streaming video device (since most phones don't actually support HD resolutions, the video streams are lower bandwidth).
I used T-Mobile mobile data (T1 connected WPA2 Enterprise hotspots supplementing the EDGE data speeds) as my primary ISP a few years ago. With tethering, it was not unheard of to hit at least 2GB/month -- on EDGE!!!
Again, I sort of, kind of, almost understood why carriers wanted to start imposing a data tethering fee when there was no official data cap. Now with the data buckets officially capped, I don't understand the data tethering fee at all. 2GB is 2GB, doesn't matter how you connect. I think the bet being made is that many users actually use much less than their given data tier when used solely on the phone. Fear of insane overages on the soft cap another good reason to use less data; I'd prefer either a hard cap with an option to buy more data or a soft cap with throttling.
Oligarchies without reasonable competition plus powerful lobbying groups can do wonders for shoring up the bottom line.
Re: Can some MBA explain this to me? - Trouble - 09-08-2011
It is a new feature so they want to generate revenue off it. I think I can make a case for it and, as always, it boils down to bandwidth.
Think of each cell tower as a water tower that can supply a certain amount of water a second; basically bandwidth. A cell phone is going to use a certain amount of bandwidth. Small screen means smaller video, less detailed video, slower and less browsing due to difficulties in typing.
Now bring in tethering which really means multiple computers or at least a laptop or, to a lesser extent, a tablet if not more. Larger screen, easier typing, higher resolution, and much higher bandwidth will be used and that is if only one computer is tethered. If more people tether then even more bandwidth is used.
To cover all of that bandwidth AT&T will need to build more towers to cover the same area and those towers along with the associated costs aren't cheap.
Now add in some of the people that would be using this service. Most people would, for lack of a better word, use this service judiciously. However there are quite a few people who say "Screw it, I paid for unlimited bandwidth and I AM GOING TO MONOPOLIZE EVERY SINGLE BIT OUT OF THAT TOWER UNTIL I HAVE TO COMPLAIN TO AT&T." While that is their right, it is short-sighted and that is one of the reasons AT&T and others have instituted transfer limits.
And the service charge is to limit the people that actually use the service. Remember that people are using a mobile connection to connect at least a laptop or tablet and probably more than just one. I haven't checked prices lately, but aren't mobile phone 3G prices cheaper than laptop dongle charges?
Tethering also directly puts more devices on their network. So rather than someone purchasing a plan for their phone, tablet, and laptop, a person can use one plan for all of their devices.
I think a more apt analogy that fits your service station would be like having a service station that has 8 hoses. If a motorcycle or car pulls up then everything is fine. If a semi pulls up, he blocks an entire line of hoses and takes a long time to fill those 80 gallon or however larger tanks. Tethering would be like the service station building specialized pumps away from the normal pumps so the regular customers aren't inconvenienced when the big users connect.
My goodness, I've typed a lot. I don't mind a tethering charge as long as it is reasonable and $20 isn't reasonable. I also think that with any tethering charge they should up the transfer limit as well. I do think $20 a month with no increase in transfer limit is exorbitant as well as the $20 texting fee.
Re: Can some MBA explain this to me? - mrbigstuff - 09-08-2011
completely agree with silvarios, it makes no sense at all when a limit has been placed. I guess many of these companies anticipate consolidation, wherein they will acquire/be acquired companies that will be competing in the same space, i.e., offering Inet service either via the air or wired.
Re: Can some MBA explain this to me? - silvarios - 09-08-2011
Trouble,
Interesting perspective. Thank you. One quibble, this is not a new feature. Tethering has been around for years. People even tethered their non smartphones (I did for quite a while, with EDGE and basic UMTS, aka slowest GSM 3G).
+1 to your mention of text messaging. MMS does require a data connection, the reason why CDMA and GSM standards prior to 3G can't send and receive MMS while talking on the phone. However, SMS seems to be built to have the least amount of impact as possible and essentially is free to the carriers (yes, yes, there are gateways and such, but that would seem to be a fixed cost).
My carrier gives me unlimited SMS and calling for one low rate ($45 for one line, $25 for each additional line, up to four additional lines, five lines total). Data (including MMS) costs extra. Luckily, you get 100MB per line when you sign up. The data never expires and is pooled between all phones. When you run out of data, you can refill for a fairly low rate ($10 for 200MB, $25 for 500MB, $40 for 1GB) given the data is pooled between lines and never expires. I use the savings to add a WiMAX mobile Hostpot.
Between my home ISP, mobile hotspot, and three phone lines I slide in around $181/month. My goal is to get down to $150 for all of the above, but that my be wishful thinking without heavily cutting into my mobile phone usage.
Re: Can some MBA explain this to me? - silvarios - 09-08-2011
mrbigstuff wrote:
completely agree with silvarios
Yes, yes, that is fantastic, but how do you feel about my MacBook Air quip? MBA…MacBook Air…not comedy gold?
