British carrier O2 has decided not to impose a cap on Web usage of the iPhone, according to national newspaper The Telegraph. Going on sale in the UK November 9th, the phone will there cost £269 plus £35 to £55 per month; although O2 has long intended to market data usage for the product as "unlimited," the company at one point decided to impose a "fair usage" policy, restricting iPhone users to 200Mb per month. This is relatively standard for the cellular industry, but the data-heavy focus of the iPhone -- including functions such as YouTube and Google Maps -- may have easily brought users into conflict with download caps.

The decision to lift data limits was based on customer response, which indicated a dislike for caps on something branded "unlimited," despite O2's analysis that most customers use just 5Mb per month on normal cellphones. "Customers find 'unlimited with limits' confusing," says O2 UK CEO Matthew Key, "plus most people don't speak in megabits or understand what they equate to. So we've taken the decision to remove the fair usage cap so that 'unlimited' really does mean 'unlimited' -– this is a market first."

There in fact remain two restrictions on iPhone use, however: the device cannot be used as a modem, and data transferred must be for personal and not commercial purposes.