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I've noticed that both Verizon, and AT&T, being the 2 largest phone companies in the US have done away with unlimited data, while smaller companies, such as sprint and Tmobile have not.

This made me wonder whether the reason was actually because of the number of users being so large, that there would eventually be a physical limit beyond which these phone companies could no longer send any greater data at any given point in time.

Is this the reason, or is it purely financial? Is there a physical limit on data transfer that the phone company itself can't go over without breaking some kind of equipment?


Since everyone seems to be misunderstanding my question, I would like to clarify it a little further: I am not asking about the financially based decisions of verizon, I am wondering about the physical limitations of their equipments, which seems to fit ServerFault.

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The more data people use, the more capacity Verizon needs to plan for, which means bandwidth and hardware purchases. This is not a ServerFault question, though. –  ceejayoz May 17 '12 at 20:25
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Oh, and to answer that, it has absolutely nothing to do with the equipment in most cases. –  gparent May 17 '12 at 20:38
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@gparent - I edited my question per your suggestion. Based on the current question though,, is it still off-topic? –  Ephraim May 17 '12 at 20:44
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I undid my negative vote and gave you a upvote for the effort :P –  gparent May 17 '12 at 20:50
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The physical limit you are looking for is RF bandwidth. –  Zoredache May 17 '12 at 20:51
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closed as off topic by jscott, ceejayoz, Massimo, dyasny, Tom O'Connor May 17 '12 at 20:29

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1 Answer

Because that's how capitalism works.

Seriously. I don't think there's any technical reason for doing this, other than "why give away what you could charge money for?".

A possibly related question is "Why is DSL always download-biased?", but that seems to be equal parts capitalism and supply/demand rules.

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I am not asking about the financially based decisions of verizon, I am wondering about the physical limitations of their equipments.. –  Ephraim May 17 '12 at 20:31
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@Ephraim No, seriously, it has nothing to do with the equipment. They think they can screw more money out of you, therefor under capitalism, they will. Someone very smart recently said, don't me mad at the lawnmower when it chops your foot off, it's a lawmower, all it does is cut. Cell companies are companies, they exist to extract as much money from your wallet as they possibly can, and for absolutely no other reason. Don't think for a second they exist for any other reason. It will be the same case for Sprint eventually, they'll be able to make more money by dumping the unlimited plans. –  Chris S May 17 '12 at 20:34
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@ChrisS Actually it has a little bit to do with the equipment/technology involved, but it still comes down to money - Each cell site only has a limited amount of front-end bandwidth (RF to handsets) and backhaul bandwidth (usually fiber to the CO/Internet), which needs to cover voice and data. Getting more front-side RF bandwidth means buying more spectrum, and getting more backhaul bandwidth means running more fiber to the site - both get expen$ive quickly. By imposing artificial limits the companies stave off saturation, and get more mileage out of less bandwidth. –  voretaq7 May 17 '12 at 21:46
    
@voretaq7 - that was the answer I was looking for. It would seem like it would be better to have that as an answer instead of a comment so I can actually have something to accept, as the above answer really doesn't answer my question. –  Ephraim May 17 '12 at 21:52
    
@Ephraim The answer above is the answer to your question, modulo some government politics on who gets spectrum and how much they have to pay for it. It IS a money grab, and while there are technical challenges that would have to be met and mastered to provide all-you-can-stand data in congested environments (think NYC) they're far from insurmountable. Politics and cash flow are usually the ruling factors here, not technology. –  voretaq7 May 17 '12 at 22:04
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