Netflix's iPad app: Unlimited streaming over AT&T's 3G network

Mike Dano

Netflix said its new movie and TV streaming application for Apple's iPad will work over AT&T Mobility's 3G cellular network. Separately, AT&T confirmed a Gearlog report that its $30-per-month unlimited data service for the iPad really is unlimited, and won't be subject to the monthly 5 GB cap the carrier imposes on USB modem and netbook users.

So there you have it: Netflix iPad users can stream video over 3G to their heart's content.

First, these developments serve to further highlight the messy market for mobile data services, and the complex and sometimes inexplicable charges wireless carriers levy on consumers. Second, it helps further define the space between smartphones and laptops that is now straddled by the iPad. Finally, I think it's clear that network engineers tasked with managing AT&T's capacity and throughput now have perhaps the most secure jobs in the country.

But let me put this news into context. AT&T already allows Sling Media's SlingPlayer iPhone app to stream unlimited video, and the carrier charges the same price--$30 per month--for unlimited iPhone data as it does for unlimited iPad data (the 5 GB cap also does not apply to the iPhone). Other iPhone apps also support video streaming.  I think this means AT&T sees the iPad as a bigger smartphone and not a smaller laptop. AT&T currently charges laptop, netbook and USB modem users around $60 per month for 3G data connections, and caps that use at around 5 GB per month. AT&T spokesman Mark Siegel confirmed the carrier's 5 GB cap remains intact for laptop and netbook users, post-iPad. (He also reiterated the carrier's position on iPhone tethering: It's coming at some point in the future.)

Now, if I were an AT&T subscriber, I'd be a little confused by the carrier's data pricing. Why should Netflix over a laptop be capped at 5 GB per month while an iPad user can stream unlimited movies? And why isn't iPhone tethering supported when Windows Mobile, BlackBerry and other phones can tether to computers for between $15 and $30 per month? Will iPhone tethering, when it is released, be capped?

I suspect the iPhone distortion field is at play. But I do wonder if this is an opportunity for video-optimization technology. Kris Rinne, senior vice president of architecture and planning at AT&T, said at last month's CTIA Wireless show in Las Vegas that "AT&T has been reviewing a number of websites looking for differences in downloads of two minutes of streaming video. Those differences are stunning." She said one unnamed site required eight times the amount of data for a download, compared with the most-efficient site's data requirements--with no visible difference in video quality from the customer standpoint.

(It's worth noting here that AT&T said it worked with Sling Media to ensure the vendor's iPhone app efficiently transmitted data over 3G, but Sling Media denies it worked with the carrier on the app. I asked Netflix if it worked with AT&T on the issue, and the company declined to respond.)

AT&T also may be relying on network management technologies to support Netflix's iPad app. Clearwire does not cap usage on its mobile WiMAX network, but explains in its terms and conditions that it can reduce "the aggregate bandwidth available to excessive bandwidth users during periods of congestion." So that too may be at play.

Regardless of the technologies that may or may not be involved, it's hard to say whether unlimited Netflix ultimately will have any effect on AT&T's network. After all, Apple sold 300,000 iPads on Saturday and none of them can connect to AT&T's network (the 3G iPad goes on sale later this month). Further, AT&T has said it believes iPad users will primarily rely on WiFi. But now that 3G streaming from Netflix is available, will the site's 12 million subscribers change that dynamic? If not, will Netflix's forthcoming iPhone app? --Mike

P.S. Today at 1 p.m. EST Apple is scheduled to announce its iPhone 4.0 upgrade. Click here to check out all our iPhone coverage, and for complete coverage of today's event.