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AT&T customers surprised by 'unlimited data' limit

By Peter Svensson

AP Technology Writer

LAST UPDATED: 05:20 a.m. HST, Feb 13, 2012

NEW YORK >> Mike Trang likes to use his iPhone 4 as a GPS device, helping him get around in his job. Now and then, his younger cousins get ahold of it, and play some YouTube videos and games.

But in the past few weeks, there has been none of that, because AT&T Inc. put a virtual wheel clamp on his phone. Web pages wouldn't load and maps wouldn't render. Forget about YouTube videos — Trang's data speeds were reduced to dial-up levels.

"It basically makes my phone useless," said Trang, an Orange County, Calif. property manager.

The reason: AT&T considers Trang to be among the top 5 percent of the heaviest cellular data users in his area. Under a new policy, AT&T has started cutting their data speeds as part of an attempt to manage data usage on its network.

So last month, AT&T "throttled" Trang's iPhone, slowing downloads by roughly 99 percent. That means a Web page that would normally take a second to load instead took almost two minutes.

AT&T has some 17 million customers with "unlimited data" plans that can be subject to throttling, representing just under half of its smartphone users. It stopped signing up new customers for those plans in 2010, and warned last year that it would start slowing speeds for people who consume the most data.

What's surprising people like Trang is how little data use it takes to reach that level — sometimes less that AT&T gives people on its "limited" plans.

Trang's iPhone was throttled just two weeks into his billing cycle, after he'd consumed 2.3 gigabytes of data. He pays $30 per month for "unlimited" data. Meanwhile, Dallas-based AT&T now sells a limited, or "tiered," plan that provides 3 gigabytes of data for the same price.

Users report that if they call the company to ask or complain about the throttling, AT&T customer support representatives suggest they switch to the limited plan.

"They're coaxing you toward the tiered plan," said Gregory Tallman in Hopatcong, N.J. He hasn't had his iPhone 4S throttled yet, but he's gotten text-messages from AT&T, warning that he's approaching the limit. This came after he had used just 1.5 gigabytes of data in that billing cycle.

John Cozen, a Web and mobile applications designer in San Diego, hasn't been throttled yet either, but he's been so disturbed by a warning that he's "almost scared to use the phone," he said. Complaining to AT&T got him nowhere, and now he's looking to switch to another carrier.

"I don't think two to three gigabytes is an exorbitant amount," he said. "Really, I'm just looking at pictures and text once in a while."

AT&T spokesman Mark Siegel said that as of last summer, the top 5 percent of data users were using 2 gigabytes of data per month. But he also said the company doesn't actually throttle all of the top 5 percent "unlimited" data users. Last month, the figure was only 0.5 percent, or about 200,000 people, he said.

That's because AT&T only throttles users in areas where the wireless network is congested that month, Siegel said.

Siegel also pointed out that aside from moving to a tiered plan, "unlimited" plan users on the cusp of being throttled can use one of AT&T's 30,000 Wi-Fi hotspots, where usage is unmetered.

The unlimited plan worked fine for AT&T a few years ago, when the iPhone was new. The company had ample capacity on its network, and wanted to lure customers with the peace of mind offered by unlimited plans. Now, a majority of AT&T subscribers on contract-based plans have smartphones, and the proportion is growing every month. That's putting a big load on AT&T's network.

But AT&T's approach to managing data congestion differs from that of the other phone companies. Verizon Wireless doesn't slow down the "5 percent" unless the cell tower their phone is connected to is congested at that moment, and it slows them down by the minimum amount necessary. By contrast, once AT&T has decided to throttle your phone, it will be slow for the rest of the billing cycle, even if it's 3 a.m. and there are no other cell phones competing for the capacity of that particular cell tower.

Verizon's measures have drawn few complaints, and indeed, may have gone unnoticed even by the "5 percent."

T-Mobile USA is up front about the level it starts throttling at: 5 gigabytes. AT&T subscribers have no idea if they might be among the top 5 percent until they get the warning, which is soon followed by throttled service. While Trang was throttled at 2.3 gigabytes, he knows other iPhone owners who are using 5 or 6 gigabytes per month with impunity.

"It seems very random," Trang said.

Sprint Nextel Corp. is hanging on to unlimited data plans without throttling, alone among the "Big Four" national wireless carriers.

Tallman sees few prospects for a lawsuit against AT&T. The company is still providing unlimited data usage to throttled customers, even if the speeds are so low as to make the phone useless for anything but phone calls and text messages. The company made no promises that "unlimited" data would always be coupled with high speeds, he notes.

"They just guaranteed the highway. They didn't guarantee the speed limit," he said.



AT&T's July 29 letter on throttling: http://bit.ly/qddCeI

Verizon page on its version of throttling: http://support.verizonwireless.com/information/data_disclosure.html

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bender wrote:
Seems like AT&T customers would be easy pickings if the other carriers offered up some plans. Not sure where the Iphone 4S would fit in with some of them though.
on February 13,2012 | 05:00AM
XML808 wrote:
BS. AT&T touted unlimited 3G service. The implication is high speed data. It is the primary reason I went with Apple instead of Android. If they throttle me, I'll probably switch to Verizon.
on February 13,2012 | 05:06AM
hanoz808 wrote:
at least you could still keep your iphone if you switched to verizon.
on February 13,2012 | 07:11AM
Upperkula wrote:
Law suit, Breach of contract, check your service contracts. talk to a lawyer cause this is BS. Thats why I am a HAM radio operator no air time limits, and for gps its call a map book...OLD SCHOOL BABY.
on February 13,2012 | 05:37AM
kailua000 wrote:
I switched last week, I've had enough of AT&T after 12 years of paying on time, they act as if they didnt care if I left their service or not. So I did and I went Android with Verizon.
on February 13,2012 | 06:07AM
hanoz808 wrote:
make sure to see if your employer participates w/verizon to get discounts.
on February 13,2012 | 07:15AM
Poidogs wrote:
How do you like Verizon? T Mobile is the same, I now use my Wi-Fi more at home and at places that I frequent. So irritating when they do that! I was considering changing to AT&T because of the I Phone but it appears that Verizon is more friendly. Any comments about Sprint folks?
on February 13,2012 | 08:24AM
Gibsons1girl wrote:
I've used Sprint for years, and have never had any problems! The speeds are good, and I use the new Galaxy S2 android phone! When you call and have a concern or complaint, they've always been wonderful with their customer service and making sure that we have everything we need to get the most out our phones and plan! The only thing I don't like is that service can be spotty on some parts of the island....verizon has better coverage I believe.
on February 13,2012 | 08:45AM
Poidogs wrote:
My brother has Sprint, and works pretty well for him. I need something that is consumer friendly. I lost my job and because of finances wanted to switch from my T Mobile Classic 3000 minutes plan to a Value Plan which would save me about $50.00 per month. T Mobile said I could switch but I had to pay a migration fee of $100.00 per phone line and sign another two year contract. I have been a loyal T Mobile customer for more than 13 years and this is how I am treated. No loyalty to their current customers. I refuse to get stuck in T Mobile with another 2 year contract when they aren't even understanding to my plight. So I continue to suffer and will wait until the end of the year when my contract is up and go to another company. Sometimes, loyalty does not pay.
on February 13,2012 | 01:39PM
Kapakahi wrote:

For people with a low level of usage, T-Mobile's pre-paid service may be the most reasonable option for saving money. But if you really need anything like 3000 minutes a month, I guess that's not for you.

Other low cost options include the MVNOs I mentioned in another post. Google "Mobile Virtual Network Operator" to get more information. If you already have a good phone you want to keep, that will limit your options to a carrier compatible with your phone. Among the MVNOs operating in Hawaii are H20, Simple and Boost. I am sure there are others. I think Walmart offers its own lowcost plan, as well, though I do not shop there.

on February 13,2012 | 02:06PM
hanoz808 wrote:
we have been loyal customers of verizon, but there were times when we thought we can save on our plan if we went w/another carrier. we shopped & kept finding that it would be the same amt or a wash.so we continue to stay. we never had problems w/reception, speed, or customer service. its been 7yrs..... don't forget to find out if you can get a discount if your employer participates w/your cell carrier. it can help a little on the plan & accessories.
on February 13,2012 | 07:14AM
Macadamiamac wrote:
ATT's 3G speed on an iPhone is pathetic. It's like going back in time to the days of dial-up modems. I can't imagine throttling it down to even slower through-put.
on February 13,2012 | 07:33AM
jwf1688 wrote:
at&t is pathetic, i had numerous issues with them and for the price of their plans the service sucks.
on February 13,2012 | 10:37AM
Kapakahi wrote:

I am not sure why the writer depended upon Mr. Tallman's assessment of a legal challenge against AT&T. Surely it would not have been too difficult to talk with an attorney or consumer rights group for a more informed opinion? I suspect upperkula is correct in saying this constitutes a breach of contract.

I have a grandfathered "unlimited data" contract with AT&T, but mostly rely upon a Wi-Fi access to connect and have not gotten close to the limits being mentioned in the article.

AT&T has you pretty well locked into their contract, so long as you are paying off the initial discounted price on the phone with your inflated monthly payments. The Early Termination Fee is set at $325, pro-rated at $10 a month. Meaning if your phone is stolen, broken or you just want to leave before 2 years is up, you are on the hook for much more money than is justified by the initial subsidized price of your iPhone.

ATT also tried to eliminate it only significant competitor for GSM service when it tried to buy T-Mobile. ATT smartphone users willing to pay the ETF or to wait until the 24 month contract expires, can easily move their phone service to T-Mobile. T-Mobile's 3G is not compatible with ATT iPhones, but the customer can get MOST of the benefits of their iPhone if they do data-intensive activities via WiFi and rely upon the slower EDGE connection for simple data. This provides a small competitive pressure on ATT to treat its iPhone customers fairly, though this is clearly not enough.

In addition, there are a few Mobile Virtual Network Operators (MVNOs) who lease access rights from ATT (and the other networks). They resell access to customers at discounted prices. Some of these companies also seriously throttle the speed of your data.

There are two logics at work setting prices on smartphone data plans. The first is the actual cost of developing, expanding, maintaining and improving the service. The second is the relative monopolistic position a carrier (or phone) enjoys to minimize competitive pressures. Consumers have to advocate for strong anti-trust, pro-competition policies. Unfortunately, telecom companies are among the largest campaign contributors-- and biggest beneficiaries of government intervention in the word of business. Cell phone customers? Not so much.

on February 13,2012 | 10:40AM
entrkn wrote:
Isn't it past time to break-up AT&T and split the cell phone division back to Cingular?..
on February 13,2012 | 11:35AM
hawnpunch wrote:
Buyers beware! Ever since the iPhone 4s came out and AT&T picked up more customers phone reception has gone downhill! Now I need to go to the outside of my house to make and receive calls. When I made a complaint to customer service they said I should buy a signal booster. My response...why should I buy a booster when my reception was perfectly fine and your network cannot handle the added customers!!! Switching to Verizon!
on February 13,2012 | 03:22PM
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