As AT&T attempts to swallow T-Mobile, one of the big carrots it's holding out for government regulators is the promise of universal, wireless broadband covering 97 percent of the nation. The company is right: this could be a big deal for millions of Americans whose economic opportunities have been limited by lack of good Internet access. But if that broadband is expensive and strictly limited, as mobile broadband is now, it won't make nearly as much difference.
There are many kinds of broadband in America. The gold standard is a fast, high-bandwidth connection with a roomy data cap. That's what AT&T offers with its U-Verse service, for instance, which gives you 250 GB of 12 megabit/second Internet for $30/month. Then there's AT&T's DSL; a little slower and with a 150 GB cap, but in the same realm.
Rural America already has broadband. It just has a more expensive, limited form. HughesNet satellite Internet blankets the country. It's costly, relatively slow and has low data caps; HughesNet's middle plan costs $60/month right now for 300MB/day (~9GB/month) at 1.5 megabits down. HughesNet isn't greedy. It's just really expensive to provide satellite Internet.
The funny thing about HughesNet, though, is that even HughesNet looks liberal compared to mobile broadband offered by the wireless carriers. AT&T's 4G data plan costs $50/month for 5GB, plus $10 per GB. Every major wireless carrier, other than happily unlimited Sprint 4G/Clear, charges similar rates.
To get even the 9 GB offered by HughesNet, you would have to pay $90/month. And with LTE, you'll be able to use that data cap up at record speeds: at 10 megabits per second, you can rip through 5 GB in less than two hours.
AT&T estimates that its own DSL subscribers tap, on average, about 18GB/month. That's $30/month for a U-Verse customer. For an AT&T wireless broadband customer, that would be $180/month—not exactly a great choice for rural America.
The wireless companies have been warning about this for a while. In AT&T's LaptopConnect terms of service, the company prohibits the use of an AT&T wireless connection "as a substitute or backup for private lines, wirelines or full-time or dedicated data connections." The other wireless carriers (except Sprint and Cricket) generally have similar terms of service.
You hear that, FCC? We're not supposed to use mobile Internet as a primary home connection.
This is a pity because according to the Pew Internet and American Life Project, home, PC-based Internet offers economic advantages that "mobile Internet" doesn't. In an AP article linked on Pew's site, Pew senior research specialist Aaron Smith suggests that updating a resume, for instance, is less feasible on a phone than on a PC. You can connect that phone to a PC as a modem, of course, but you won't get the lower rates and higher data allowances AT&T allows its home Internet subscribers.
"Research has shown that people with an actual connection at home, the ability to go online on a computer at home, are more engaged in a lot of different things that people who rely on access from work, a friend's house, or a phone," Smith says in the AP story.
This bears out in the much more parsimonious Internet use of phone users. When we surveyed six PCMag iPhone owners (admittedly, in the days before the Netflix app) we found nobody went over 500MB/month. Why? Because their mobile devices weren't being used as their primary connections, and because mobile Internet, at the prices currently offered, isn't an answer to lack of home Internet.
If the government is looking to cause a new flourish of business activity, most businesses are run from PCs, not phones, and those PCs need a "full-time or dedicated data connection," not an as-you-may, occasional-use mobile hookup.
I asked AT&T about this, and spokesman Mark Siegel gave a clear but somewhat dispiriting answer.
"Rural America needs wireless broadband regardless of the extent to which it may be used as a substitute for wireline… [and] the real import of the transaction is that it brings to rural America the kind of robust wireless broadband choice that is being made available to consumers in urban areas," he said.
That means AT&T's wireless broadband isn't the solution to the rural digital divide. If it's like wireless broadband in urban areas, it may be second-rate, designed to supplement rather than replace a primary connection. But as most rural folks don't have a good choice for primary connections in the first place, this promise of nationwide, rural, high-speed broadband may mean a lot less to Americans than it first appears to.