If you don't give AT&T your money, they will cut you.

In the euphoric afterglow of the iPhone 3.0 OS preview, I'm reminded of how irritating cell providers are. There was a very telling exchange in the Q&A section of the presentation today. When asked about "tethering", the Apple reps gave a hand-wavy answer about having built tethering into the new OS, but they would have to work out the details with the service providers. Tethering is the ability to connect a device to a PC and use it as a cellular modem; basically like having a 3G data card in a PC. A lot of phones support this, but AT&T has stifled it on the iPhone.

There are a lot of iPhones, and that's a lot of people that might pay extra for a tethering plan. A tethering application showed up briefly on the app store, only to be taken down at the request of AT&T. See, they'd much rather charge an extra $60/month for the tethering service. Apple has pulled their fair share of douchebag moves, but this one is all AT&T.

Why should it matter to AT&T where the data is coming from? If you pay for unlimited cell data on your phone, it should be none of their business how you use it. Oh, and the tethering plan will have a 5GB/month cap on it. It seems like an outrageous price to me, but when you think about it, there are worse offenses.

Do you know how much a single text message costs on AT&T? If you don't have a plan (or you go over) they cost you $0.20 each. That's sent and received. That's plain ridiculous to charge so much for a few bytes of data. That's all it is. There's nothing special involved. All the data that goes out over the wireless antenna is the same to a carrier. They'll basically let you download and upload all the data you want for $30/month, unless that data happens to be in the form of a text message. But there's money to be had.

Lets put this another way. If you want 1 megabyte (MB/1 million bytes) of data for your phone, you pay $5/month. Frankly, a little steep. But if all you do is check sports scores or the weather, that's fine. A text message is a maximum of 160 bytes of data. At $0.20 per message, that runs a little over $1300 for 1MB of data. Does that make even a LITTLE sense? Nope. Even if you get a plan for 1500 messages ($15/month), you still lose out big time. All 1500 would use only about 240kB of data, that's less than a quarter of a megabyte. To recap, 1MB of data costs $5/month. However, if that data is a text message (and it's really all the same to the carrier network), you pay way, way more.

On my iPhone last month, I used about 200MB of unlimited cell data (I use wifi at home). If AT&T charged the same rate for cell data as they charged for text message data, I'd owe them $262,144. I know... people have complained about this before. But it doesn't get any less annoying with time.