AT&T Mulls Plans to Deal with iPhone Data Demand

AT&T Mobility President Ralph de la Vega says the company 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. 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 bits to a cell tower, as 3G does. Cell towers get swamped when as few as a dozen nearby iPhone users simultaneously try to watch a YouTube clip or play a game. "Two years ago, all the carriers thought Wi-Fi was a threat" to their cellular networks, says Marc Lowenstein, a consultant who used to run marketing for Verizon Wireless. "Now it's a lifeline." It's a lifeline that AT&T plans to use heavily.