AT&T's New Data Plan Won't Slam Music Fans

Industry experts say two gigs plus WiFi should tide over even hardcore downloaders

June 3, 2010 4:14 PM ET

This week, AT&T announced new monthly smartphone data-plan rates, abandoning its popular unlimited-data pricing plans in favor of charging users $15 a month for 200 megabytes of usage or $25 for two gigabytes. The shift will mean lower bills for users who don't consume much data, but what does it mean for music fans who download or stream music constantly using the mobile iTunes store, Pandora or YouTube on the phone company's 3G network? According to AT&T and some industry sources, not much: users would have to consume a lot of music over the phone company's wireless 3G network. "Two gigs is the equivalent of 400 song downloads," says Mark Siegel, an AT&T spokesperson. "That's a lot, man. Do you download anything close to that?" (Connecting to WiFi and other networks won't be included in the monthly data-usage tally.)

AT&T insists the $25-per-month plan, which will replace the unlimited-data plans for smartphone users, will be sufficient for 98 percent of its customers. (Current iPhone users will be allowed to keep their $30 monthly plans for unlimited data.) In its June 2nd announcement, AT&T Mobility spun the new rates as a bargain for consumers: "We're breaking free from the traditional 'one-size-fits-all' pricing model and making the mobile Internet more affordable to a greater number of people," Ralph de la Vega, the company's president and CEO, said in a statement. A rep for Pandora, the Internet-radio service that is one of the iPhone's most popular apps, agreed with the sentiment, adding that a two-gigabyte data cap would affect only half a percent of its users. "Pandora is a very efficient streaming service — we don't consume very much," says Deborah Roth, a company spokesperson. "We've been focused on that for years."

Still, users who go over the two-gigabyte limit would pay $10 for each additional gigabyte — and that could add up for mobile-music fanatics. "For the heaviest users of data, it's not great news," says Syd Schwartz, a consultant who until recently was Senior Vice President of Digital Marketing at EMI. "Certainly if you're listening to the radio all day if you're on AT&T's plan, and not WiFi, it could prove troubling. For light users of data, it probably won't affect them all that much, because they'll never break the threshold. But certainly for services like Pandora . . . the thought of anything getting in its way is troubling. Let's just hope for a lot more WiFi in a lot more places sooner than later."

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