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Posted at 07:57 AM ET, 08/01/2011

AT&T to throttle heaviest wireless users, latest shift from unlimited data


In this July 13, 2011 photo, one of the pages of "Today's Deals," appears on the screen of an iPhone, in New York. (Richard Drew - AP)
AT&T said that beginning in October it will throttle wireless service for the heaviest data users on unlimited plans, saying its networks have become too congested from video and music streaming via smartphones and tablets.

The move is the latest blow for wireless consumers, who are increasingly being charged by how much data they consume over their wireless devices as providers grow more mindful of apps that can clog networks and run up their monthly bills.

Beginning Oct. 1, AT&T said the top five percent of data consumers on its unlimited data plan will see traffic slow to a crawl. These are long-time subscribers who were able to keep unlimited plans even after June, 2010, when AT&T stopped offering them.

The company announced the changes on its Web site last Friday and described the affected users as “a very small minority of smartphone customers” who use 12 times more data than the average smartphone customers by streaming large amounts of video and music, playing online games, and using remote web camera apps over the wireless network.

AT&T said it would warn customers and provide a grace period before it begins to throttle traffic. Normal speeds will be restored at the start of the next billing cycle.

Except for Sprint Nextel, all major national carriers now cap data at various tiers or throttle service to heavy users. In this case, users don’t face data caps, but they aren’t given true unlimited service either.

In June, 2010, AT&T stopped offering all-you-can-eat unlimited plans to new subscribers. Verizon Wireless made a similar shift last June, and T-Mobile throttles services for unlimited data users who hit five-gigabyte caps.

Network engineers note that wireless networks face real capacity constraints, particularly in big cities, where users are concentrated and some wireless service providers have been slow to react to the demands of smartphone users.

Web companies such as Netflix have argued against data caps — particularly on wireline networks — saying limits prevent new companies like theirs from competing with cable and other television services. Consumer groups such as Consumers Union and Free Press say they worry that phone giants AT&T and Verizon could use data caps on wireline and wireless networks to promote their own television services over competing video over the Internet offerings such as Hulu, Amazon and Netflix.

And increasingly, users are using their devices for activities they would normally do on their home computers.

Currently, 63 percent of all Web traffic is generated by computers, but that number will decline to 46 percent by 2015, according to Cisco, the Internet network equipment maker.

“Speeds are improving, WiFi is getting faster and devices are proliferating,” Cisco vice president of policy Mary L. Brown said in a recent interview.

By 2015, the number of mobile Internet users around the globe will increase 56-fold, to 788 million users, Cisco said.

AT&T has suggested users turn to WiFi networks more often to stream videos and music. It also said that its merger with T-Mobile would help in handling traffic headaches.

“Nothing short of completing the T-Mobile merger will provide additional spectrum capacity to address these near term challenges,” AT&T said.

That point is debatable, according to some lawmakers and consumer groups. They say AT&T could have expanded capacity on its networks well before it was caught by surprise by the data explosion caused by Apple’s iPhone over the past four years. AT&T’s network was notorious for dropped calls and sluggish service for iPhone users.

“I am not convinced that AT&T has effectively managed or used its available spectrum to improve service for its customers,” said Senator Al Franken (D-Minn.) in a letter to FCC Chairman Julius Genachowski last month. He urged the FCC and Justice Department to reject the merger. “AT&T owns more spectrum than any other company, yet AT&T has been plagued with delays in rolling out infrastructure to support spectrum it has been allocated.”

Related:

For telecoms, success lies in mobile Web

Faster cell phones, more confusing bills

AT&T, T-Mobile and Obama

As smartphones proliferate, some use wireless as main way to get to Web

By  |  07:57 AM ET, 08/01/2011

 
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