AT&T Shifts Gears; Explains Its Throttling Policy

The New York Times’ Bruce Chen presents a sublime quote this morning portraying a consumer’s reaction to having the flow of data slowed on his mobile device.

“It’s like taking a Ferrari into a dealer, and you get it back, and it only goes 45 miles per hour, and you say, ‘What the heck, dude?’” according to Matt Spaccarelli, who took AT&T to small claims court in California –- and won $850 -– after it slowed down his download of “The Office” recently. “And they say, ‘You’re going 100 miles per hour, and it’s too dangerous for you, but if you pay us more, we’ll let you go fast again.’ ”

The Times’ hed on the story isn’t too shabby either: “Revising The Limits On The Unlimited.” Basically, AT&T formally announced yesterday that it has “pulled the plug on its all-you-can-eat plan for smartphone customers, telling subscribers they will see much slower speeds if they exceed a new monthly usage cap,” Greg Bensinger writes in the Wall Street Journal.



"Our unlimited plan customers have told us they want more clarity around how the program works and what they can expect," AT&T says in a statement on Facebook. Predictably, it has elicited a lot of negative comments. But one reaction tries to put it into perspective: “I'm loving how bent out of shape people are getting over this,” writes Bruce Smith. “The service has not changed, they simply announced how the process works.”

Here’s the clearer picture. AT&T will slow the transmission speed for customers with "unlimited" data plans when they reach 3 gigabytes of data usage within a billing cycle, writesUSA Today’s Roger Yu. Customers who use the 4G data network LTE will experience a slowdown at 5 GB of data usage. “Previously, AT&T slowed transmission only for those in the top 5% of heavy data users in an area for the month,” Yu reports.

When throttled, users could still do e-mail and Web browsing, but they would find streaming of video and audio difficult, if not impossible, Current Analysis telecom analyst Deepa Karthikeyan tells Yu. "There was general discontent among [unlimited data] customers,” Karthikeyan says. “If you called customer service reps, they were pushing you to tiered plans," Karthikeyan says.

Described as a 39-year-old “student” in the Times and USA Today stories and as a dump truck driver in the Wall Street Journal, Spaccarelli tells Bensinger “The Office” slowed down by a third once AT&T’s throttling took effect, making it unviewable.

"Either it's unlimited or it isn't, and a throttled plan is not unlimited no matter what you call it," he says, venturing dangerously close to metaphysics as he bathes in his 15 MB of fame. AT&T is appealing the decision in Ventura County Superior Court.

Verizon also cuts off the top 5% of data users, but don’t call it “throttling.” It’s “network optimization,” thank you very much.

“Once you are no longer connected to a congested site, your speed will return to normal,” Verizon spokeswoman Brenda Raney tells the Times’ Chen. “This could mean a matter of seconds or hours, depending on your location and time of day.” 

Sprint Nextel, on the other hand, has been “aggressively marketing” its unlimited data plan. “Why would anyone want to limit the iPhone?” it asks in this ad. Sprint joined Verizon and AT&T in offering the iPhone late last year. No. 4 carrier T-Mobile, which “says it wants its throttled customers to consider moving to a plan with higher limits,” as Jeff Gelles blogs on, remains at an iOS disadvantage. Gelles also gamely tries to sort out AT&T’s “(sort of)” explanation of its wireless data throttling.

“The average cell phone customer aged 24 - 35 consumed 578 MB of data per month during the third quarter of 2011, a 118% increase over usage during the same period in 2010, according to Nielsen,” writes SmartMoney’s Kelli B. Grant. “Nokia Siemens Networks estimates that by 2020, the average user could be going through a full gigabyte of data daily.”

SmartMoney’s Grant offers several workarounds for avoiding throttling, including using WiFi connections whenever possible for downloading byte-sucking apps and streaming re-runs of “Star Trek.” Both Android and iOS devices automatically connect to WiFi –- if you’ve plugged in the password.

The Wall Street Journal’s Greg Bensinger and Willa Plank put together an FAQ on “How To Avoid Being Throttled,” including downloading some apps that track data usage (My Data Manager) or also compress it (Onavo). Just remember to pull them down on a WiFi network to avoid being caught downstream without a paddle.

And if you don’t think that’s big news you probably think those $10-a-month emergency voice-only plans advertised in AARP pubs are all a person really needs. But mobile is the new Wild West of advertising. Indeed, Mark Walsh’s “IAB Debuts 5 Mobile Ad Units” in Tuesday’s Online Media Daily occupies the No. 1 slot in “Recent Most Read Stories” in the box to your right below.

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