When the iPhone first came out, it’s super awesome web-browsing meant that, for the first time, mobile users (like normal ones, not just mega nerds) were regularly accessing the web via their phones. A year after the iPhone 3G came out, iPhone users were still gobbling up 5 to 10 times as much internet as other smartphone users. Since then, iPhone-based web consumption has continued to skyrocket. Add to that the fact that Apples new 3G iPad is sold out everywhere (mine ships in two weeks), and the fact that AT&T *finally* plans to support tethering one’s iPhone internet connection to one’s laptop, and you have a whole heap of trouble for AT&T’s already strained network.

Obviously the sensible thing to do in this situation is proclaim that AT&T totally blows (BOOOOOOO! YOU SUCK AT&T!!!), but it really does seem like attempting to offer unlimited data access over wireless is inherently problematic. As better and better web technology is introduced, people are simply going to continue to consume as much internet as you give them. That’s why any speed/capacity improvements AT&T makes to their network are immediately devoured by iPhone and iPad users. For example, suppose I’m killing 10 minutes browsing the internet on my phone. I typically spend a good chunk of that time waiting for pages for load. This means that if pages loaded faster, I’d just use my time to view more pages, and what’s worse, I’d start checking the web more often. Once I get my iPad, the amount of time I’ll be looking to spend browsing the internet will only increase. Plus I’ll want to view videos, because lets face it, nothing lets you know your livin’ large in the 21st century like viewing some hilarious youTube videos on your kick ass iPad.

At this point, I think that AT&T has correctly concluded that the strain on their network isn’t likely to change as cellular speeds improve. Most popular US-oriented webpages are designed to be viewed on high speed WiFi internet connections, but these are exactly the same pages people want to access over cell networks. Unless cellular internet speeds approach WiFi speeds (which isn’t going to happen), they’ll always be an unquenchable demand for cellular bandwidth.

The only real solution, it seems, is to create incentives for people to use WiFi as much as possible. Municipal WiFi could be much more widespread, but this is less likely to happen if AT&T continues to offer unlimited data plans. Also, as David Pogue recently noted, cable companies are rolling out large networks of wifi hotspots (at least around NYC at least). AT&T’s new pricing plan has just made this service a lot more valuable, and as such, it’s likely to grow at a much faster rate. Having unlimited cellular internet is great, but forcing communities to step up their wifi coverage is arguably as important.

If anything, criticism of AT&T should focus on their on whether or not they succeed at making WiFi-based internet access more widespread. For example, AT&T has not pushed for large scale municipal WiFi networks, but they do have a substantial network of Starbucks/McDonalds-based hotspots. Also, two weeks ago, AT&T finally started selling a 3G microcell for $150. If you connect this magical device to your home internet, your cell phone will use it for both calls and data when you’re at home. This has the advantage of providing you with faster internet (and potentially clearly phone calls) since it relies on your home’s (hopefully) fast internet connection. These devices have the potential to save AT&T enormous amounts of bandwidth, since presumably many homes can all be sharing a single microcell. As such, their price should be much, much lower.

Verizon Wireless, one of the nation’s largest cellphone carriers, has stirred up controversy with a letter it sent to customers recently telling them that it would begin sharing information from their calling records with its “affiliates, agents and parent companies.”

I should note that Verizon is giving customers 30 days to acknowledge that they want to keep their information private (just call 800-333-9956). If a customer doesn’t respond in 30 days, Verizon will assume they agree to having their information shared. I somehow doubt that all of Verizon’s 60 million customers will be made aware of their new terms of service in time. Seems like Verizon could have at least left a voicemail.

Now according to the Times, some folks are speculating that Verizon wants to use customer information to display targeted ads on cell phone screens. Roger Entner, a senior vice president for communications at IAG Research, even points out that mobile ad targeting could have its benefits.

If you take the Big Brother fear out of the picture, it helps in making ads more relevant. If you are always making calls to L.A., they might send an ad to your cell phone for cheap airline flights to L.A.

On a completely unrelated note, the Washington Post recently reported that Verizon has “provided customers’ telephone records to federal authorities in emergency cases without court orders hundreds of times since 2005.” I wonder if the government is getting into the mobile ad business as well?

Update: I’d hate to imply that Verizon is the only phone company providing the government with customer information in the absence of warrants. Here are some recent goings-on if you’re interested.

In the grand scheme of why I dislike Verizon, this incident isn’t particularly important. Unfortunately, there’s a more important issue at stake than selecting the best cellphone provider. When companies like Verizon decide to allow or disallow content (last month AT&T also apologized for some superfluous censorship), they implicitly claim the right to block the content they deem objectionable. Under current law they appear to be correct.

As my favorite full-time blogger points out, however, accidental censorship doesn’t bode well for the future of an unregulated internet. If Verizon is providing your house internet though DSL or FIOS, nothing prevents them from blocking access to websites they find objectionable. I confess that I was going to switch to FIOS when it becomes available on Brown Street, but now I’m having second thoughts. According to CNET I’m unlikely to get the right to an uncensored internet anytime soon.

First, as several of Matt’s commenters point out, Verizon cripples their phones. For years they’ve removed many phones ability to send and receive files via bluetooth. This not only forces customers to pay for ring tones and themes, but also makes it much harder to get photos off camera phones or to sync address books with a computer. More recently they’ve crippled various phones abilities to play MP3s. They’ve also crippled the new Blackberry’s GPS.

Now I realize I’m a giant dork who cares too much about techy features, but Verizon has also worked to stifle municipal WiFi. Even better, their CEO asked customers “Why in the world would you think your (cell) phone would work in your house?” (and don’t worry, he also thinks municipal Wifi maybe one of “the dumbest ideas” he’s ever heard).

I’m not a fan of any phone company. Features like the iPhone’s visual voicemail should have been introduced years ago, and why can’t I get voicemail by e-mail or the web? Verizon, however, actively prevents innovation. Also they’re really bad at math.