Showing posts with label mobile broadband. Show all posts
Showing posts with label mobile broadband. Show all posts

Jun 19, 2010

Closing the Digital Frontier

The era of the Web browser’s dominance is coming to a close. And the Internet’s founding ideology—that information wants to be free, and that attempts to constrain it are not only hopeless but immoral— suddenly seems naive and stale in the new age of apps, smart phones, and pricing plans. What will this mean for the future of the media—and of the Web itself?

By Michael Hirschorn

Image credit: Jason Schneider

As Chris Anderson pointed out in a moment of non-hyperbole in his book Free, the phrase Information wants to be free was never meant to be the rallying cry it turned into. It was first uttered by Stewart Brand at a hacker conference in 1984, and it came with a significant disclaimer: that information also wants to be expensive, because it can be so important (see “Information Wants to Be Paid For,” in this issue). With the long tail of Brand’s dictum chopped off, the phrase Information wants to be free—dissected, debated, reconstituted as a global democratic rallying cry against monsters of the political, business, and media elites—became perhaps the most powerful meme of the past quarter century; so powerful, in fact, that multibillion-dollar corporations destroyed their own businesses at its altar.

It’s a bit of a Schrödinger’s-cat situation when you try to determine what would have happened if we had not bought into the IWTBF mantra, but by the time digital culture exploded into the mainstream with the introduction first of the Mosaic browser and then of Netscape Navigator and Internet Explorer, in the mid-’90s, free was already an idea only the very old or very obtuse dared to contradict. As far back as the mid-’80s, digital freedom was a cause célèbre on the Northern California–based Whole Earth ’Lectronic Link (known as the WELL), the wildly influential bulletin-board service that brought together mostly West Coast cyberspace pioneers to discuss matters of the day.

It gives you a feel for the WELL’s gestalt to know that Brand, who founded the WELL, was also behind the Long Now Foundation, which promotes the idea of a consciousness-expanding 10,000-year clock. Thrilling, intense, uncompromising, at times borderline self-parodically Talmudic, the WELL had roots in the same peculiar convergence of hippiedom and techno-savantism that created Silicon Valley, but it also called out, consciously and un-, to a neo-Jeffersonian idea of the digital pioneer as a kind of virtual sodbuster. The WELL-ite Howard Rheingold, in his 1993 digital manifesto, The Virtual Community: Homesteading on the Electronic Frontier, described himself as being “colonized” (in a good way) by his virtual community. The libertarian activist John Perry Barlow, an early member of the WELL’s board of directors, was a co-founder of the Electronic Frontier Foundation, a digital version of the ACLU.

At the WELL, the core gospel of an open Web was upheld with such rigor that when one of its more prolific members, Time magazine’s Philip Elmer-DeWitt, published a scare-the-old-folks cover story on cyber porn in 1995, which carried the implication that some measure of online censorship might not be a bad thing, he and his apostasy were torn to pieces by his fellow WELL-ites with breathtaking relentlessness. At the time, the episode was notable for being one of the first examples of the Web’s ability to fact-check, and keep in check, the mainstream media—it turned out that the study on which Time’s exclusive report was based was inaccurate, and its results were wildly overstated. In retrospect, what seems notable is the fervor with which digital correctness—the idea that the unencumbered flow of everything, including porn, must be defended—was being enforced. In the WELL’s hierarchy of values, pure freedom was an immutable principle, even if the underlying truth (that porn of all kinds was and would be increasingly ubiquitous on the Web, with actual real-life consequences) was ugly and incontestable.

Digital freedom, of the monetary and First Amendment varieties, may in retrospect have become our era’s version of Manifest Destiny, our Turner thesis. Embracing digital freedom was an exaltation, a kind of noble calling. In a smart essay in the journal Fast Capitalism in 2005, Jack Shuler shows how similar the rhetoric of the 1990s digital frontier was to that of the 19th-century frontier era. It’s a short jump from John L. O’Sullivan in 1839—“The far-reaching, the boundless will be the era of American greatness. In its magnificent domain of space and time, the nation of many nations is destined to manifest to mankind the excellence of divine principles”—to Kevin Kelly, the pioneering conceptualizer of the “hive mind” and a founding editor of Wired, writing in Harper’s in 1994, “A recurring vision swirls in the shared mind of the Net, a vision that nearly every member glimpses, if only momentarily: of wiring human and artificial minds into one planetary soul.” Two years later Barlow, a self- described advocate for “online colonists,” got down on bended knee, doublet unbraced, to beseech us mere analog mortals: “Governments of the Industrial World, you weary giants of flesh and steel, I come from Cyberspace, the new home of Mind. On behalf of the future, I ask you of the past to leave us alone … You have no sovereignty where we gather.”

I take you on this quick tour not to make fun of futurism past (I have only slightly less-purple skeletons in my closet), but to point out how an idea that we have largely taken for granted is in fact the product of a very specific ideology. Despite its Department of Defense origins, the matrixed, hyperlinked Internet was both cause and effect of the libertarian ethos of Silicon Valley. The open-source mentality, in theory if not always in practice, proved useful for the tech and Internet worlds. Facebook and Twitter achieved massive scale quickly by creating an open system accessible to outside developers, though that openness is at times more about branding than anything else—as Twitter’s fellow travelers are now finding out. Mainframe behemoths like IBM wave the bloody shirt of Linux, the nonprofit open-source competitor of Microsoft Windows, any time they need to prove their bona fides to the tech community. Ironically, only the “old” entertainment and media industries, it seems, took open and free literally, striving to prove that they were fit for the digital era’s freewheeling information/entertainment bazaar by making their most expensively produced products available for free on the Internet. As a result, they undermined in little more than a decade a value proposition they had spent more than a century building up.

But now, it seems, things are changing all over again. The shift of the digital frontier from the Web, where the browser ruled supreme, to the smart phone, where the app and the pricing plan now hold sway, signals a radical shift from openness to a degree of closed-ness that would have been remarkable even before 1995. In the U.S., there are only three major cell-phone networks, a handful of smart-phone makers, and just one Apple, a company that has spent the entire Internet era fighting the idea of open (as anyone who has tried to move legally purchased digital downloads among devices can attest). As far back as the ’80s, when Apple launched the desktop-publishing revolution, the company has always made the case that the bourgeois comforts of an artfully constructed end-to-end solution, despite its limits, were superior to the freedom and danger of the digital badlands.

Apple, for once, is swimming with the tide. After 15 years of fruitless experimentation, media companies are realizing that an advertising-supported model is not the way to succeed on the Web and they are, at last, seeking to get consumers to pay for their content. They are operating on the largely correct assumption that people will be more likely to pay for consumer-friendly apps via the iPad, and a multitude of competing devices due out this year, than they are to subscribe to the same old kludgy Web site they have been using freely for years. As a result, media companies will soon be pushing their best and most timely content through their apps instead of their Web sites. Meanwhile, video-content services are finding that they don’t even need to bother with the Web and the browser. Netflix, for one, is well on its way to sending movies and TV shows directly to TV sets, making their customers’ experience virtually indistinguishable from ordering up on-demand shows by remote control. It’s far from a given that this shift will generate the kinds of revenue media companies are used to: for under-30s whelped on free content, the prospect of paying hundreds or thousands of dollars yearly for print, audio, and video (on expensive new devices that require paying AT&T $30 a month) is not going to be an easy sell.

Yet lack of uptake by young people will hardly stop the rush to apps. There’s too much potential upside. And with Apple in the driver’s seat, the rhetoric of “free” is becoming notably more muted. In rolling out the iPad, Steve Jobs has been aggressive and, to date, unapologetic about policing apps deemed unacceptable for the iPad store (or apps whose creators hold opinions that are anathema to Apple’s corporate interests or sense of universal order). And Apple has so far refused to enable Flash, the Adobe technology that runs 75 percent of all videos seen on the Web, and is launching its own ad-sales platform, presumably to control and monetize traffic on its devices.

On a more conceptual level, the move from the browser model to the app model (where content is more likely to be accessed via smartly curated “stores” like iTunes, Amazon, or Netflix) signals the first real taming of the Wild Digital West. Apple’s version of the West has nice white picket fences, clapboard houses, morals police, and lots of clean, well-organized places to spend money. (The Internet, it seems, is finally safe for Rupert Murdoch.) These shifts are seemingly subtle, but they may prove profound. Google, which built its once monopolistic position by harnessing the chaos of Web search, has been forced to move aggressively to preserve its business model against this new competition: it has teamed up with the Apple-scorned Flash; is making conciliatory gestures to the content owners it once patronized; has reached a deal to purchase a mobile ad-sales platform; and is promoting its own vision of the future based on cloud computing. Phones using its open-source smart-phone operating system, Android, are outselling the iPhone. Even so, Google still needs for the Web, however it’s accessed, to remain central—because without contextual search advertising, Google ceases to matter. Smart phones in general, and the iPad more pointedly, are not driven by search.

All of this suggests that the era of browser dominance is coming to a close. Twitter, like other recent-vintage social networks, is barely bothering with its Web site; its smart-phone app is more fully featured. The independent TweetDeck, which collates feeds across multiple social networks, is not browser-based. As app-based usage climbs at the expense of the browser and as more content creators put their text, audio, and video behind pay walls, it will be interesting to see what happens to the Twitterverse and blogosphere, which piggyback on, and draw creative juice from, their ability to link to free Web content. If they don’t end up licensing original content, networks such as Twitter and Facebook will become purely communication vehicles. At first glance, Web sites like The Daily Beast and The Huffington Post will have a hard time once they lose their ability to hypertext their digests; on second glance, they will have an opportunity to sop up some of the traffic that once went to their now-paid rivals. Google, meanwhile, is hoping to find ways to link through pay walls and across platforms, but this model will clearly not be the delightfully free-form open plain of the early Web. Years from now, we may look back at these past 15 years as a discrete (and thrillingly indiscreet) chapter in the history of digital media, not the beginning of a new and enlightened dispensation. The Web will be here forever; that is not in question. But as Don Henley sang in “The Last Resort,” the Eagles’ brilliant, haunting song about the resortification of the West, “You call someplace paradise, kiss it goodbye.”

Which brings us back to manifest destinies, physical and digital. As Patricia Limerick has argued in her reconsideration of frontier ideology, the moonstruck rhetoric of Manifest Destiny in the 1800s, though it may have been sincere, neatly papered over a host of less enlightened agendas. The surge west was a critical driver of economic growth, allowing the growing republic to harness vast amounts of natural resources and create new markets. The high-flown ideology of Manifest Destiny was, in short, a cover for a massive land grab (not to mention the slaughter of the Indians). The same is happening online. Now, instead of farmers versus ranchers, we have Apple versus Google. In retrospect, for all the talk of an unencumbered sphere, of a unified planetary soul, the colonization and exploitation of the Web was a foregone conclusion. The only question now is who will own it.

This article available online at:

http://www.theatlantic.com/magazine/archive/2010/07/closing-the-digital-frontier/8131/

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Jun 2, 2010

Inexpensive Wi-Fi That Travels With You

Daniel "Unreasonable" Epstein with h...Image by Global X via Flickr

Wi-Fi is everywhere.

Or so it seems until you really need it and there is no coffee house with a free hot spot. Or when you don’t want to pay a fee to connect at the airport or a hotel for an hour.

Our pockets and bags are filling with Web-connected devices: laptops, smartphones, netbooks, tablets, e-readers and even cameras. But to connect one when Wi-Fi is not available means using a cellphone network, and that usually requires buying a new data plan for each device.

The cost-cutting solution might be to create your own personal Wi-Fi hot spot, a cloud of Internet connectivity to keep with you wherever you go. Not only can a personal hot spot provide a single point of access for all of your devices, it can be shared with friends.

The options are growing. You can buy a simple, slim unit that fits in a pocket or ones that can shift from 3G to speedier 4G networks. You can convert some cellphones into hot spots, while a few new phones now come with hot spots included. I tried several such options while traveling and in my daily routine to see what they offered.

The Novatel MiFi 2200, available from Verizon Wireless ($29.99 with a two-year contract) or Sprint (free after $50 rebate and with a two-year contract), is a Wi-Fi hot spot small enough to slip into a shirt pocket. It is a mysterious-looking object with no screen and a single button.

It wirelessly connects to a 3G cellular network just like a phone, but it also broadcasts a Wi-Fi signal to the surrounding area. Devices within a 30-foot range can connect. I used the MiFi while traveling by car from Boston to New York. Having the coverage brought peace of mind when using Google Maps on my iPod Touch and my laptop to guide me around Brooklyn.

Still, 3G speeds can be slower than what is available at land-based hot spots. Back at home, downloading my daughter’s favorite videos was faster on our home wireless network.

Verizon’s monthly data plans for the MiFi are $39.99 for 250 megabytes of data, or $59.99 for 5 gigabytes, with extra charges for exceeding those limits. Sprint charges $59.99 for 5 gigabytes and extra for exceeding limits. Another pocket-size option, the Overdrive 3G/4G Mobile Hotspot, from Sprint ($49.99 with a two-year contract), is slightly thicker than the MiFi but comes with more features. The first is speed. It can connect not only to Sprint’s 3G network, but also its new and speedier 4G network. The 4G network is not yet available nationally, but if you are in one of the 33 cities covered, including Seattle, Atlanta and Houston, speeds are fast. (Sorry, New York is not included.)

Another feature that was useful: a bright screen that displays information like remaining battery life, signal strength, the hot spot’s name and password and number of connected devices. The monthly data plan is $59.99, with unlimited 4G usage and a 5 gigabyte cap on 3G and extra charges for exceeding it.

The Clear Spot, from Clearwire, is another 4G option. In fact, it uses the same 4G network as Sprint (Sprint is the majority owner of Clearwire.) The Clear Spot is bigger than the Overdrive and probably not ideal to keep in your pocket during use; it requires a U.S.B. modem, with pricing from $69.99 to $224.99 depending on features. But if your goal is 4G speeds, the Clear Spot delivers.

Not all areas of each city are covered by the network so reviewing the company’s coverage map beforehand is helpful. The Clear Spot costs $49.99 and supports up to eight devices within a range up to 150 feet. Service plans with unlimited access start at $40 a month and a U.S.B. modem can also be leased for $3.99 a month. A plan offering 3G speeds in areas outside the 4G network is also available.

The CradlePoint PHS300 ($99.99 at Amazon), works with dozens of phones and also U.S.B. modems. Depending on your carrier, it may work with your phone’s existing data plan or require one that allows tethering. I used one with a BlackBerry Storm; after powering on the PHS300 and connecting it to the BlackBerry, I was viewing Web pages on my laptop in just under a minute and the battery lasted two hours and 20 minutes. The PHS300, from CradlePoint Technology, based in Boise, Idaho, is the same size as the Clear Spot.

The latest way to create a mobile hot spot is with cellphones. This can eliminate the clutter of carrying and charging an extra device. Through Verizon, the Palm Pre Plus ($49.99 with two-year contract) and Pixi Plus (free with a two-year contract) include this option.

Using a Pre Plus with an iPad, I was online and viewing Web pages in about 15 to 30 seconds after waking the iPad from power-save mode. Also useful, the phone chimed when the iPad connected, letting me know I was ready to surf.

Using the phone as a hot spot quickly drained the phone’s battery, even with light surfing. Verizon is now waiving its $40 monthly fee for the hot spot feature. Monthly data plans for unlimited access start at $29.99, which could be an alternative for iPad owners. Starting Monday, Apple will no longer offer its unlimited data plan for the iPad 3G.

More phones with personal hot spots are on the way. Sprint’s HTC EVO 4G, which can run on Sprint’s 4G network, is expected Friday ($199.99 with a contract and rebate; plans for both calling and data begin at $69.99 plus a $10 premium data fee and $29.99 a month for the hot spot feature).

Google’s recently updated Android operating system, version 2.2, includes a hot spot feature and is expected to be made available soon. But not all Android phones will support that function.

Software can turn many new and older phones into hot spots, too. WMWifiRouter, from Morose Media, based in the Netherlands, works on a variety of phones. I used it on an HTC Touch Pro2, which runs the Windows Mobile operating system. The software ($19.99 at wmwifirouter.com) can be downloaded directly to the phone.

JoikuSpot (joikushop.com) supports the Symbian operating system, including many phones from Nokia and Samsung. Depending on your tolerance for risk, some phones like the iPhone and some Android phones, can be hacked to work as hot spots. Steps for hacking are posted across the Internet, but you risk voiding a phone’s warranty.

There was no one solution that was best for all users in all situations. It depends on the cellphone service you have, the devices you own and where you live or travel. With a laptop, an iPod Touch and maybe an iPad in the future, I like the idea of not carrying around yet another device.

After all, without having to depend on coffee shops for Internet access, I may also be carrying around my coffee.

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May 2, 2010

Pitting the Web's Users Against Its Gatekeepers - NYTimes.com

Logo for NetNeutralityImage via Wikipedia

BERLIN — With the majority of Internet traffic expected to shift to congestion-prone mobile networks, there is growing debate on both sides of the Atlantic about whether operators of the networks should be allowed to treat Web users differently, based on the users’ consumption.

Proponents of the current system — called network neutrality — see that principle as a kind of civil rights declaration of the digital age, one that requires the gatekeepers of the global Internet to treat all users equally, regardless of application, source or download limit.

While operators have never been required to maintain neutrality, the industry has created that expectation largely by charging users a flat rate for unlimited Internet access.

But there is a big flaw in the concept, according to the operators: Networks have never been neutral. They have always been actively managed to some extent since their inception in the 1980s to ensure that all customers get a basic “best effort” level of service.

If an operator could not restrain bandwidth hogs, who typically make up 15 percent of customers but who generate 80 percent of the traffic, most Internet users would experience poor service.

“The Internet has never been a neutral environment left to develop freely on a first-come, first-serve basis,” said Stuart Orr, the head of the telecommunications group in Europe, Africa and Latin America for Accenture, a U.S. software services consultant.

The arcane issue of network management, and the free speech and competition issues it raises, has taken on broader political importance as operators have increasingly micromanaged the flow of data, favoring some users over others as they have sought to handle exploding levels of traffic or deliver premium broadband service at guaranteed speeds to heavy users and businesses.

In the United States, users of the BitTorrent file-sharing service, a large generator of broadband traffic, last year challenged a cable operator, Comcast, that had blocked the service by identifying and disabling a common protocol used by BitTorrent users.

The Federal Communications Commission ordered Comcast to stop the blocking. Comcast challenged the ruling. On April 6, an appeals court in Washington sided with the operator, saying the F.C.C. could not tell Comcast how to manage its network.

In Brussels, the European commissioner for the digital agenda, Neelie Kroes, plans to hold a public consultation on net neutrality this summer, which could lead to a push for new laws or regulations for operators.

Earlier this year, Ms. Kroes warned mobile operators not to block or hinder Internet voice services like Skype from their networks.

Operators are worried that any rigid legal mandate that forced them to observe net neutrality standards would be unworkable and make the economics of high-speed wireless broadband less attractive, which could limit future investment and improvement to the networks.

“We have no interest as an industry in policing individual surfing habits or acting as the gatekeeper for information,” said Frederic Gastaldo, the head of strategy and innovation at Swisscom. “Historically, our industry has resisted attempts to force operators to act as the personal gatekeepers of information. That would be a very negative marketing approach. However, customers who do excessively use our data network are a big challenge for us.”

Congestion is more problematic for mobile than landline broadband operators because wireless broadband capacity is limited by the ability of individual base stations to process the Web activities of hundreds of users simultaneously. The more users per station, the less performance for each user.

To avoid bottlenecks, operators use techniques like “traffic shaping,” which sorts traffic to ensure basic service for all, or “throttling,” which applies a general brake on large streams of data.

Kabel Deutschland, the largest German cable TV operator, has one million broadband customers. Its coaxial and glass-fiber network is so far able to satisfy all customers without restrictions, said Georg Merdian, director of the company’s infrastructure regulation.

But he said that the number of its broadband customers was doubling each year. “We anticipate we will soon have to use some kind of management techniques,” Mr. Merdian said.

For most mobile operators, traffic management is a fact of life.

Vodafone, one of the largest mobile operators in Europe and a part owner of Verizon Wireless, the No.1 wireless operator in America, routinely alerts its customers when they exceed the download limits of their service packages.Like all other operators, Vodafone uses sophisticated software that can pluck users or applications from the digital clamor.

“We use a form of network management to say, ‘I’m sorry, you are not going to be able to get the same level of service unless you decide to top up,”’ said Richard Feasey, Vodafone’s public policy director in London.

As data traffic levels rise, some executives, like César Alierta, the chairman and chief executive of the Spanish operator Telefónica, and Vittorio Colao, the Vodafone chief executive, have floated the idea of charging not only customers but also Web sites that generate lots of data traffic, like Google, Amazon and Facebook, for faster, guaranteed service.

Web businesses, which depend on fast Internet paid for by individual customers, oppose the idea and have been pushing lawmakers in Brussels and Washington to adopt restrictions preventing operators from making deals with content providers.

Prohibitions like that would make an operator’s business untenable, eventually reducing cable and phone networks to unprofitable, crowded data freeways, said Robert Mourik, the director of Telefónica’s regulatory policy in Europe.

“We have an explosion of traffic, but our revenues have not been growing at the same pace or staying flat,” Mr. Mourik said. “We are not looking at content on the Internet. We are not trying to police the network. What we are looking to do are commercial deals.”

Whether operators can successfully sell preferred Internet access to big Web businesses remains to be seen. Such a move would drastically alter the economics of the Internet, forcing content providers, in effect, to pay a toll, and perhaps a heavy toll, for access.

Naturally, none of the big Web sites are interested in doing that.

In February at an industry convention in Barcelona, Eric Schmidt, the chief executive of Google, was asked to comment on statements made by Mr. Colao of Vodafone, who had called for the right to clinch commercial deals with big Web businesses like Google.

Mr. Schmidt, who during a speech that day had stressed Google’s role in helping network operators build their wireless broadband businesses by attracting consumers to the mobile Web, declined to comment, adding that Mr. Colao was a friend.

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Apr 18, 2010

Getting What You Pay for on the Mobile Internet - NYTimes.com

TeliaSonera ABImage via Wikipedia

BERLIN — When TeliaSonera, the Nordic telecommunications operator, switched on the world’s fastest wireless network last December, customers quickly ratcheted up their consumption of mobile data tenfold.

Besides reaffirming the soundness of the operator’s investment in the new technology, called Long Term Evolution, or L.T.E., the data smorgasbord confirmed another truism: the days of flat-rate mobile data rates are probably drawing to a close.

All-you-can-eat plans — as they are known in the industry — were introduced when the mobile Web was in its infancy and demand was profitable and manageable. But with traffic booming, reflecting the growing popularity of smartphones, social networking and downloading music and video, network operators fear that flat-rate plans will eat into profits or even fail to cover costs.

The result is likely to be higher prices for consumers.

“Finding a way to make mobile profitable in the medium and long term is one of the industry’s big priorities,” said Mike Roberts, an analyst at Informa Telecoms & Media in Chapel Hill, North Carolina. “We are now at the early stages of figuring out a way forward.”

Even before it spent 500 million Swedish kronor, or $70 million, to switch on its L.T.E. network last year, TeliaSonera began introducing pricing plans with download limits as advances in the third-generation technology that preceded L.T.E. led to an explosion in traffic.

“In 2009, the mobile data on our network in Sweden increased by 200 percent but the number of subscribers increased just 60 percent,” said Anna Augustson, vice president for communications mobility services at TeliaSonera in Stockholm. “Clearly, it was not a sustainable model from a business perspective to have a single, flat rate.”

Last year, TeliaSonera began selling a series of 3G mobile broadband data plans with monthly limits ranging from 2 gigabytes to 20 gigabytes a month, for 39 to 319 kronor.

TeliaSonera is selling an introductory L.T.E. network plan with unlimited downloads for 4 kronor a month. But by July, the operator plans to limit downloads to 30 gigabytes and charge 599 kronor for the service, almost twice the cost of its 20-gigabyte 3G plan.

In exchange, TeliaSonera’s L.T.E. users will get download speeds of 20 to 40 megabits a second, about 10 times those on its 3G network.

“We feel it is important for our customers to have a choice,” Ms. Augustson said. Instead of all you can eat, the new industry mantra, she said, is: “You get what you pay for.”

At least one major operator is doing likewise. In Spain last November, Vodafone, the largest European carrier, introduced Calidad Oro — Gold Quality — a premium plan for business users for €49, or $66, a month that guarantees fast service without monthly limits on downloads.

The advent of tiered pricing for mobile broadband is new, but, in a sense, it is also a throwback to the early days of the technology, when operators imposed often unrealistically high download fees that scared off consumers and delayed the development of the mobile Web.

Eventually, operators began selling all-you-can-eat plans, first in the United States and then in Europe, to ease consumer angst about running up big bills. The plans attracted users and helped speed the technology’s development. Now, some operators are moving toward sophisticated forms of metered pricing based on speed and consumption, striving to balance profitability and consumer satisfaction.

Soon, the biggest operators are likely to follow with plans that redefine how most consumers purchase wireless data. Top executives at AT&T, Verizon Wireless, Vodafone, Deutsche Telekom and Telefónica have all recently called on the industry to move away from flat-rate data plans, although only Vodafone so far has attempted a tiered pricing plan.

At AT&T, the No.2 wireless carrier in the United States, after Verizon Wireless, the use of mobile data surged 5,000 percent from 2007 through 2009 after the operator became the exclusive U.S. seller of Apple’s iPhone, which has helped popularize the mobile Web. But it has also strained AT&T’s wireless network at peak times in urban areas in New York and California.

“In light of the limited natural resource of spectrum, we have to look at the ways of conserving spectrum,” said Mark Siegel, an AT&T spokesman in Atlanta. “We have had to invest billions in our network to keep ahead of this demand. This may also require a different way of looking at pricing on the part of the industry.”

Operators do not disclose whether their mobile data services are profitable, although analysts say they are and point to the industrywide move to build L.T.E. networks, which are essentially mobile broadband networks, as the future for a business where revenue from voice services will play an ever-shrinking role.

Mobile data traffic levels are expected to continue climbing as the use of bandwidth-eating smartphones increases and operators around the world follow TeliaSonera’s example and install their own L.T.E. high-speed networks.

The number of mobile broadband users worldwide is forecast to increase 55 percent this year, to 437.8 million from 282.5 million in December 2009, according to Informa, the telecommunications research firm. By the end of 2014, the number of mobile broadband users is projected to reach 2.1 billion.

Over the same period, the level of mobile data traffic on the networks of the world’s carriers is expected to rise 22 times, to 15.1 billion gigabytes from 674 million gigabytes. But without changes in pricing, operator revenue will rise 12 percent a year through 2014, according to Informa, just a fraction of the 49 percent projected annual increase in subscribers or the 86 percent annual increase in data traffic.

Operators are just beginning to link the price of a service — in this case mobile broadband — to the costs to a mobile network, said Kenneth Frank, the president of solutions and marketing for Alcatel-Lucent, a network equipment maker. “There is going to be so much creativity about pricing. We are only seeing the beginning,” Mr. Frank said.

Steve Smith, an analyst at Coda Research Consultancy in Guildford, England, said unlimited flat rates would not disappear but would become much more expensive. “Operators will have to work hard to get their tiers ‘right,”’ Mr. Smith said.

Over time, consumers will have many options for buying customized wireless broadband plans, said Pat McCarthy, a vice president for global marketing at Telcordia, a maker of bandwidth management software for operators based in Piscataway, New Jersey. Those may not mean higher costs for the average user, but heavy users may face higher bills.

“The problem with mobile broadband so far has been most of the revenue it has generated has gone to over-the-top Internet content services, not to the operators,” said Mr. McCarthy, who is based in Galway, Ireland. “That’s what they are trying to change.”

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