AT&T Wireless CEO Hints at 'Managing' iPhone Data Usage

PC World - AT&T Wireless CEO Ralph de la Vega bemoaned the disproportionate wireless bandwidth usage of iPhone users in a speech to wireless industry professionals here today, and hinted at an unpleasant way of dealing with the problem.

De la Vega spent his first 11 slides talking about the virtues of the U.S. wireless industry versus the rest of the world, and of the quality and popularity of AT&T's 3G wireless network and services in particular. He said such a vibrant market needed no additional regulation from the FCC.

De la Vega talked about the enormous growth in demand for wireless broadband service in the US, and about the immediate need to free up more wireless spectrum to accommodate that growth.

But spectrum is hard to come by these days, and, as De la Vega pointed out, even if new chunks of spectrum could be reallocated quickly, it still takes a few years to build the networks that use that spectrum.

Meanwhile demand for mobile broadband rockets upward among wireless users. De la Vega cited research showing that demand for wireless broadband has grown 5,000 times in the last three years. That growth as roundly expected to accelerate in the coming years.

But all that data usage is not evenly spread across AT&T's wireless customer base, De la Vega says--far from it. He cited AT&T research showing that just 3% of AT&T's smartphone customers [read iPhone users] use 40% of all smartphone data, that they consume 13 times the data of "the average smartphone customer," yet represent less than 1% of AT&T's total postpaid customer base.

Big problem--but AT&T management should have seen this coming a year ago. Or maybe they did, but getting Wall Street to buy into the idea of aggressive and costly network upgrades is like pulling teeth without anesthetic--lots of screaming.

So in the absence of new spectrum and new, faster 4G networks, what does AT&T intend to do about the growing demand in the near term?

De la Vega's comments on this subject really caught my attention.

Without the proper management of these networks, De la Vega said, regular data users will be "crowded out" by the small number of users [read iPhone users] who use massive amounts of data.

"We have to manage the network to make sure that the few cannot crowd out the many," De la Vega continued. He said the words "crowded out" at least five times in that part of his keynote address.

But what exactly does De la Vega mean by "proper management"? That kind of talk reminds me of Comcast's much-maligned strategy of throttling down the bandwidth allowance of users who routinely download large torrent files.