AT&T to throttle data speeds for heaviest wireless users

Correction: An earlier version of this article incorrectly said that Sprint Nextel is the only major national carrier that caps data or imposes speed limits on heavy users. It is the only major national carrier that does neither. This version has been corrected.

August 1, 2011

AT&T’s announcement that it would slow down the speed of wireless service for its heaviest data users on unlimited plans has left some of its loyal customers irate and confused.

AT&T said Friday that it would throttle speeds of the top 5 percent of data consumers on its unlimited data plans beginning Oct. 1. These big data users are mostly long-time subscribers who were able to keep unlimited plans after June 2010, when AT&T stopped offering them to new customers.

The problem is AT&T won’t say who exactly these customers are and how much data consumption would trigger the slowdown.

The move is the latest blow for wireless consumers, who are increasingly being charged for each byte they use as providers struggle with the strain of video and music streaming apps that are clogging their networks.

Several commenters on Twitter and consumer blogs said that they thought the company had offered them a bait-and-switch by promising they could keep their plans. “Another reason to hate AT&T,” commented one user. “I should throttle my AT&T bill,” grumbled another.

AT&T isn’t the only provider that has sought to limit so-called data hogs.

T-Mobile throttles services for unlimited data-users who hit five-gigabyte caps, and Verizon Wireless in June stopped offering unlimited data plans. Except for Sprint Nextel, all the major post-paid national carriers now cap data or impose speed limits on heavy users.

But until last week AT&T had differentiated itself from the pack by claiming to offer unlimited service to an elite group of long-time customers.

Scott Ehrlich, a Web producer from Los Angeles who works on video projects, said that he’s been an AT&T customer for 20 years and keeps an old number to hold on to the legacy unlimited data plan. “It’s a psychological thing,” he said when asked if he’s worried about exceeding AT&T’s cap with his iPhone. “I use my devices freely because I know it’s unlimited.”

AT&T described the affected users as “a very small minority of smartphone customers” who use 12 times more data than the average smartphone customers. But the company did not specify how much data that is.

“No one knows the effect of data usage on networks, what triggers the throttling or even why, what the costs are to the network or even how it is determined that rationing schemes are to be imposed on consumers,” Harold Feld, legal director for public interest group Public Knowledge, said in a statement. “It is all one big black box.”

A recent Consumer Reports survey found that the average smartphone user on AT&T’s network uses 360 megabytes per month. Using AT&T’s formula, users who exceed 4 gigabytes per month would be affected by the cap.

A user would have to watch just over an hour of streaming video a day to consume that much data, according to AT&T’s network data calculator.

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

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

Mobile Web use has been on the rise as users increasingly use their smartphones for activities traditionally kept to the their home computers. But the new data policies by AT&T and others may slow that boom.

“Lots of consumers are paying a car payment for their mobile phones,” said Carl Howe, director of consumer research at Yankee Group. “And I have to believe that at some point more consumers are going to say, ‘You know? I want the car.’ ”

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