Netflix this morning announced that they’ve developed an app that will allow both iPod Touch and iPhone users to stream video selections from their instant queue. You’ll need to be a Netflix customer on a $8.99 or higher to use the free application, which will work over both Wi-Fi and AT&T’s 3G network (just in time to run smack into AT&T’s new 200 MB and 2 GB caps).



It’s not easy to explain why mobile data caps, which in AT&T’s case appear to cost users $5 to $10 less a month, are actually bad for consumers. So consider the case of Netflix streaming.

As mentioned above, Netflix will soon allow users to stream movies over 3G connections on their iPhones.

I previously crunched the numbers here, and discovered that someone streaming, say, The Blind Side would blow through more than 200MB of data in one sitting — reaching the cap for AT&T’s $15/month plan. This user would be charged $15 per additional 200MB, or $15 a movie, which should be streaming for free (if you pay $8.99 a month to Netflix).

People can always upgrade to the 2GB a month plan, but given our increasing data consumption, it’s only a matter of time before we blow through that cap too.