Walt Mossberg sat down with AT&T CEO Randall Stephenson to discuss primarily AT&T's wireless business. One of the most talked about subjects was the volume of data that was going over the 3G network, largely due to the popularity of the iPhone. Stephenson knows it is an issue and has plans to address it. Are the other carriers responding as well?My family and I made our annual trek to the Indianapolis Motor Speedway this past weekend to see the Indy 500. I've always blogged to friends and family members from the track during the whole day, even before Twitter got started. This year though it was more difficult. About four hours before the race started (that's right - you get to this thing early so you can park in the same zip code as the track is in) I noticed my data connection was getting very slow. Sometimes it would take 30-60 seconds to just pull down a text email from my GMail account, other times I'd get nothing at all. My twitter client kept timing out and I couldn't connect to Facebook either. This lasted until about an hour after the race was over. I had reset the phone connection multiple times and even rebooted my Windows Mobile phone thinking that would clear it up. It finally dawned on me that what must be happening is the T-Mobile towers in the area were just saturated with people twittering, sending pics via MMS and otherwise trying to occupy their time while waiting for the race to start or during the yellow flags.

Sure enough, once we got about ten miles from the track that afternoon, it all cleared up and everything was back to normal on my phone. I continued to Twitter during the race via SMS, but I couldn't send pics or respond to replies until we were long gone for the day.

I understand that events like that are not everyday occurrences, but it is frustrating nonetheless. I am paying for a service and was getting nothing for my money that day, a day I really wanted to use it. It doesn't take a big event like this though to notice problems with bandwidth. I've seen it during street fairs in New York and hear about it all of the time from tech friends that visit various conventions.

The rapid rise of the smartphone has outpaced what the networks can comfortably handle and it will only get worse. AT&T currently blocks using Slingplayer on an iPhone over 3G due to bandwidth concerns, but that is the wrong direction to go. We need more bandwidth, not restrictions on bandwidth consuming applications.

AT&T is definitely aware of the issue and has plans, some of which are in progress. They are moving to High Speed Packet Access 7.2, which should double the network speed. That should be done by 2011. They are also going to move to LTE which has a maximum throughput of 20Mbs.

These are serious investments and that will be paid for by you and me. As fellow Over The Air blogger Eric Zeman already noted in part of the conversation yesterday, flat rate plans may be a thing of the past before long. Mossberg asked if AT&T had suffered because of the data pricing model with the iPhone, and Stephenson ultimately said that there is a dramatic up tick in usage and the pricing model much change.

We'll have to see how that plays out. I suspect those that use their smartphones primarily for emails and social networking like Twitter or Facebook won't see huge increases in their data charges because these aren't data intensive apps, but if you are downloading songs, posting a ton of video or Slingboxing TV shows to your phone, you could get hit with some surprises when the statement arrives.