Behind Your Business

When AT&T Mobility President Ralph de la Vega was asked at a Dec. 9 investor event in New York about iPhone users who consume large amounts of data, he had no idea that he was about to set off a firestorm.

De la Vega said that AT&T is looking at various ways to get these demanding users to curtail their consumption. Within hours the Web was filled with articles that said Ma Bell was about to raise prices or slap consumers with restrictive monthly usage limits. "There were no follow-up questions, so I figured everyone understood what I was saying," de la Vegas said in a Dec. 16 interview. "I guess I should have been more clear."

In an effort to explain his thinking, de la Vega told Bloomberg BusinessWeek that AT&T is knee-deep in a market research project that asks consumers in focus groups to give their opinions on a range of potential tactics to free up network bandwidth for Apple iPhone users and other AT&T subscribers.

Industry analysts have been figuring that AT&T would inevitably move from its $30-a-month, unlimited data plan for iPhone users to a "tiered pricing" model that charges according to usage. De la Vega says that no such move is imminent. "There are things people say I said that I didn't say. We have not made any decision to implement tiered pricing," he says -- repeating the last part for emphasis.

Wi-Fi: From Threat To 'Lifeline'

Instead, AT&T wants to craft "incentives" that would compel iPhone owners to reduce demands on the company's overworked 3G cellular network. The most obvious solution is to get them to switch to wireless Wi-Fi networks whenever possible.

Wi-Fi access points, found everywhere from customers' homes to coffee shops, move bits of information directly to a wired broadband Internet connection. That's cheaper than transmitting the...