I think ATT and Verizon subsidize the phones quite a bit. As I understand it, with the subsidies for smart phones Apple makes a profit and Google makes a profit. Now the phone companies want to make some money (more money) on it. The phones with their advance speeds tie up a lot of bandwidth with so much data transfer at high speeds. I guess videos can really suck up the data. This demand on the system slows speeds down and leads to angry customers. The phone companies have to invest in infrastructure to support the demand and this costs a lot of money. Up go the data rates. Also, higher rates may temper data demand.