Shared Data Plans Complicate BYOD - InformationWeek

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7/20/2012
03:38 PM
Larry Seltzer
Larry Seltzer
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Shared Data Plans Complicate BYOD

The end of per-device billing by AT&T, Verizon, and soon others means that accounting for BYOD in a company will become trickier. The answer probably is to change the nature of employee reimbursement.

The shift by carriers from per-device contracts to multiple device-shared data contracts will change the habits of consumers in ways that are difficult to predict.

In the new model, consumers pay for a certain amount of data each month, then pay for each device they want to add to the contract to draw from that pool of data. The more devices you have on contract, the better the deal compared to the old per-device contract model. The new shared plans also include unlimited voice and texting.

But this presents a challenge for many companies with BYOD policies by making the portion of the bill attributable to any one device an ambiguous concept. When the bill separates out costs for the BYOD number, it's easy to know what number to expense, assuming your company does allow you to expense BYOD data charges. But what to do when a big part of the bill is a pool of data also used by the spouse and kids?

The first obvious idea is to divide the data pool cost by the number of devices using it, but this isn't especially logical, and as the number of non-BYOD devices on the plan goes up, it lowers the reimbursement. Another possibility, assuming the bill details the data usage of each device as I suspect it will, is to reimburse based on the percentage of total data usage consumed by the BYOD device. This hints at being more logical, but data is not like gasoline coming out of a pump. It doesn't seem much fairer.

Another possibility is to abandon strict BYOD and reimburse in the form of a discount with a carrier with which the employer has made a deal. Often companies will offer such a discount to employees for personal phone expenses as part of a larger contract they have with the carrier. The employee doesn't get complete freedom to choose phones and he gets only one carrier, but he does get discounted phones and plans. I'm told the discounts run from 10% to 20% with different carriers, and connection fees are waived. But this isn't real BYOD.

The best idea I've heard comes from reader Rick Bollar, who argues that the numbers are small enough that it's not worth it to companies to go to the trouble of detailed accounting. "I think the easiest solution is to give employees a personal technology allowance either as a per-diem type expense reimbursement, or as a separate line item on their paycheck. My preference is for including it as income on the paycheck, as this solution completely eliminates any potential business-use paperwork for the company and the employee (at least for tax purposes)."

Treating the allowance as income as opposed to an expense reimbursement relatively penalizes higher-income employees who will pay a higher tax rate on that income. But the higher-income employees are usually the ones who are in a position to negotiate better terms, such as a larger reimbursement, with the employer.

The truth is that we're too early in this phenomenon to know what will happen. I'm sure few, if any accounting departments have a policy in place for this, but they're going to have to deal with it soon.

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