BROOKE GLADSTONE: On Monday, Apple CEO Steve Jobs unveiled the latest version of the iPhone, a big deal that seemed to distract attention from what was potentially a much bigger deal, an announcement by AT&T, the exclusive wireless network for the iPhone and the iPad, that new AT&T customers would no longer be able to sign up for unlimited data plans. Preexisting AT&T customers can hang onto their old unlimited plans, but for all new converts to the iPhone or any other smart phone on the AT&T network there will be a limit as to how much video, music, apps and news you can stream over the air. The Wall Street Journal last month quoted a Verizon representative hinting that soon Verizon may also move away from unlimited data plans. AT&T says this is good news. Most users will pay less, since they can choose between two plans, 15 dollars a month for 200 megabytes or 25 dollars a month for two gigabytes. Before, everyone had to pay 30 bucks a month for the unlimited plan. But Jeff Jarvis, blogger at BuzzMachine.com, says AT&T’s new scheme is cynical and that having no limit is crucial to the progress we've made since the early days of Internet service on our home computers.

JEFF JARVIS: The irony here is that it was AT&T back in the '90s that went to a 1995 unlimited plan. And that’s when suddenly your spouse no longer said, are you still on that Internet thing wasting a fortune? Now the clock was gone. What did we do? We browsed. We saw the whole Internet. It led to an explosion of Internet use, an explosion of Internet development and an explosion of the Internet business model. Now just as mobile is said to go nuclear, AT&T, ironically, turns the clock back on us, and it makes us nervous about being there. And the reason it’s a cynical act is because – listen to Jon Stewart a few months ago when he went after AT&T and its bad service.

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JON STEWART: How do you drop four calls in a one-mile stretch of the West Side Highway?

[LAUGHTER] There’s no building around!

[LAUGHTER] What, does the open space confuse AT&T’s signal?

[LAUGHTER]

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JEFF JARVIS: AT&T could do two things. It could invest in its network and make it better, or it could get its customers to use the network less.

BROOKE GLADSTONE: But with wired connections, Internet providers could just lay new cables with wire-less connections. There are limits to the bandwidth, so shouldn't the bandwidth hogs have to pay for their gluttony?

JEFF JARVIS: I just got back from South Africa where it was very expensive to use my AT&T iPhone, and I was constantly nervous about everything I did. And I remember that’s how I used to feel in the early days of the Internet when we’d go onto – remember AOL or CompuServe, and we'd worry about that hourly charge that would come in every month? Well, I think that’s going to hurt the Internet and the entire economy now. We have all kinds of new devices that are coming out to say, use me, make more video, watch more video, beautiful movies on the iPad. And now we're being told, at the same time, oh, not too much now.

BROOKE GLADSTONE: How much is two gigabytes?

JEFF JARVIS: It’s not that much. You watch video, and you get photos and you take photos, and you share stuff, and you create content which has great value, and the problem is we're all going to do all of that less.

BROOKE GLADSTONE: Well, how about this? You can transfer your data when you get home by connecting your phone to your computer with a cord, or when you get to a Wi-Fi hotspot instead of using the cell phone company’s network. This could just force people to be a little bit smarter and transfer data at the right time and in the right place.

JEFF JARVIS: Right time, right place - who set these rules? This is the Internet. I want to be connected to the Internet through my laptop and an iPad and through my car, through my house, through everything. And the industry and the economy want that for me. It’s growing. It’s exploding. There are things we haven't even imagined yet we can use, and you’re trying to put me through all these hoops. That just does not bode well for the development of this new thing.

BROOKE GLADSTONE: You say that it’s very cynical because this is the moment when mobile digital technology is about to go nuclear. But, Jeff, maybe it already has. Maybe wireless companies think the genie is already out of the bottle. People already depend on their phones for data. In other words, the revolution has started, and even charging for data isn't going to slow it down.

JEFF JARVIS: What did you use, that word “phone” - how outmoded that is!

[BROOKE LAUGHS] Right? The funny thing here is, is that I don't want their voice plans anymore. So fine, you know what, AT&T? Let me get rid of my voice plan and let me use Skype. Let me go to 100 percent digital. Let me pull together all of my accounts in one and have a world where I can connect like mad and pay you for it and not pay for things that I don't want.

BROOKE GLADSTONE: So you’re saying that you'd be able to live with a data cap, if you didn't have to pay for voice service?

JEFF JARVIS: I'd rather pay a lot of money for unlimited data and not pay for all the other stuff I don't use. That’s a model I can get behind.

BROOKE GLADSTONE: If they said, I'm going to charge you 50 bucks a month and you can have unlimited, you'd probably go ahead.

JEFF JARVIS: Sold.

BROOKE GLADSTONE: Right. But a lot of people need access at a lower level just to function in life, and maybe they don't have 50 bucks a month.

JEFF JARVIS: I'm not against having lower plans but eliminating the unlimited plan, that’s my problem.

BROOKE GLADSTONE: I see. Let's say Verizon does follow suit. You still have T-Mobile, you still have Sprint. They could offer unlimited plans. If this is really such a horrible idea, won't other companies [LAUGHS] offer competitive services and keep the mobile revolution moving forward?

JEFF JARVIS: If this show were called “On the Airlines” the same logic would be, well, if one airline raises its prices, won't the others take advantage of that and lower theirs? No, it’s an oligopoly. We're stuck with them.

BROOKE GLADSTONE: It’s incredibly important to modern life to be connected to the internet. In fact, it’s nigh unto essential. If that’s the case, isn't the next logical step to make it a public utility, pay for it with taxes?

JEFF JARVIS: Well, I think in the short term, because we have a quadropoly of access in mobile, and we have a monopoly or a duopoly in most of our neighborhoods, in terms of wired internet, then there may be a short-term need for regulation. But the founders of Google have said that taking the white spaces that'll be freed up when digital TV takes over from analog TV and turning that into Wi-Fi on steroids, would create connectivity we can't imagine.

BROOKE GLADSTONE: Didn't we already do that? Didn't all our TVs already go digital last year?

JEFF JARVIS: But we haven't reallocated some of the spectrum yet and figured out what to do with it. If we left it unregulated like Wi-Fi and had Wi-Fi on steroids, the founders of Google say we'll have connectivity everywhere. Then we'll have competition. And I believe that competition is what will take care of this. So the priority is to get more people offering us access, in more ways, and then we'll have good deals.

BROOKE GLADSTONE: Jeff, thank you so much.

JEFF JARVIS: Thank you, Brooke.

BROOKE GLADSTONE: Jeff Jarvis teaches at the City University of New York Graduate School of Journalism, and he also blogs at BuzzMachine.com.

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