UPDATED: Sprint says mobile hotspot plan always capped but usage wasn't tracked

Sprint Nextel (NYSE:S) says its monthly 5 GB cap on mobile hotspot and tethering services is not new, but customer data usage is being tracked and enforced for the first time.

"Customers with the mobile hotspot and phone-as-a-modem add-on plan have always had a 5 GB limit. The issue was Sprint did not have the capability to enforce that, meaning we weren't tracking it," said Sprint spokewoman Kristin Wallace.

Now that Sprint has implemented usage-tracking technology, "we do know when customers get to that limit," she added.

Though Wallace said customers on the add-on plan should have known of the 5 GB cap they signed up for, she acknowledged that those who regularly used more than 5 GB in a month were probably aware that they were going over the 5 GB cap without being charged any overage fees. "Now we're going to be charging if you go over," said Wallace.

The issue arose after Sprint sent out emails to alert users of its mobile hotspot and phone-as-a-modem add-on service that they are now being capped at 5 GB per month followed by $0.05 per-megabyte overage charges. The cap applies to EV-DO, WiMAX and Sprint's upcoming LTE services, said Wallace.

"Starting in June 2012, and effective on your next bill, your phone or tablet's on-network Mobile Hotspot data allowance will be limited to 5 GB," said the customer email, which noted that customers' invoices in May or June included a message about the timing of this change.

A Techdirt writer, who said he is a Sprint subscriber, was apparently the first to report on the email. "Sprint has unilaterally changed our deal from one where I was paying for unlimited data via the phone as a modem--to one where it's capped at a stupidly low 5 GB," he wrote.

However, Wallace contends the company did not have any customers on an unlimited phone-as-a-modem plan, as the plan has long been capped at 5 GB.

At least, that was true until last month, when Sprint announced it was shuttering the $30/5 GB plan. That announcement, disclosed on Sprint's community blog, noted that grandfathered users would still have access to the original $30/5 GB plan. New users, however, must sign up for either a 2 GB plan that costs $20, a price point that might introduce entry-level users to data-only mobile hotspots and phone-as-a-modem tethering, or a new $50/6 GB plan.

In conjunction with that announcement, the operator implemented data-usage monitoring and alerting when a user has consumed 75, 90 and 100 percent of a hotspot plan's data bucket. At 100 percent of usage, the operator will give users the option to suspend on-network hotspot usage or pay the overage charge of $0.05 per megabyte to continue exceeding the monthly data allowance.

Over the past eight months, Sprint has made numerous changes to its mobile broadband price plans. In October, Sprint notified customers that starting in November it would no longer offer mobile broadband plans with unlimited access to Clearwire's mobile WiMAX network, eliminating one aspect of Sprint's market differentiation.

Prior to the change, Sprint offered three different rate plans for mobile broadband devices: 3 GB of EV-DO data with unlimited WiMAX for $45 per month; 5 GB of EV-DO data and unlimited WiMAX for $60 per month; and 10 GB of EV-DO data and unlimited WiMAX for $90 per month. After the change, EV-DO and WiMAX data were placed under the same data cap, with a $0.05 per MB overage charge. Mobile Hotspot add-on service for smartphones was limited to 5 GB of combined EV-DO/WiMAX data. 

In November, Sprint unveiled new mobile broadband rate plans for mobile broadband devices including tablets, dedicated mobile hotspots, USB modems, netbooks and notebooks, charging $50 per month for 6 GB of combined EV-DO and mobile WiMAX data and $80 per month for 12 GB of combined EV-DO and mobile WiMAX.

At that time, Sprint also announced a 3 GB/$35 per month plan for tablets and mobile hotspots and a 1 GB/$20 per month plan for tablets. The new rate plans replaced all of Sprint's previous mobile broadband plans at the time.

Earlier this week, the carrier began selling the Sierra Wireless Tri-Fi, a mobile broadband hotspot that allows users to access 3G, WiMAX or even its fledgling LTE coverage.

Sprint still offers unlimited data for untethered smartphone usage.

Read more:
- see this Techdirt post
- see this Sprint webpage
- see this AGBeat article
- see this Electronista article

Related articles:
Report: Carriers to replace buckets of minutes with unlimited calling
Sprint's $20 tethering plan aimed at new users
Sierra Tri-Fi hotspot available via Sprint
Sprint chides Verizon, AT&T over unlimited data plans
T-Mobile isn't jumping on the shared-data plan bandwagon
Sprint undercuts AT&T, Verizon with cheaper mobile broadband plans
Sprint drops unlimited WiMAX data for mobile broadband plans

This article was updated on June 7, 2012, to reflect new information after Sprint answered FierceBroadbandWireless' inquiries regarding the spectrum cap email that the operator sent out to customers.

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