AT&T revises throttling policy after user uproar

AT&T Mobility (NYSE:T) pivoted on its throttling policy and will now slow the speeds of unlimited data users who travel over specific data thresholds. AT&T had previously throttled the 5 percent of its customers who used the most data in a specific location, but that method generated an outcry among users who weren't prepared to have their speeds reduced--and, in some cases, users who had only consumed 2 GB of data.

AT&T said its action was spurred by a 20,000 percent jump in wireless data traffic during the past five years. The carrier said its smartphone user based has grown from 7 million in 2006 to 39.4 million in 2011.

The issue boils down to AT&T's attempts to reduce the amount of data traveling over its network. The carrier several years ago offered unlimited data service, but the popularity of iPhones and other smartphones began to strain its network. AT&T in June 2010 introduced tiered data pricing as a way to dissuade users from gobbling up large amounts of network capacity, but the carrier allowed those on its unlimited plans to keep those plans. According to the New York Times, AT&T still has 17 million subscribers to its legacy unlimited plans.

In July 2011, AT&T said it would begin throttling the speeds of unlimited data subscribers who were among the top 5 percent of its heaviest data users. The carrier noted that it was still providing unlimited service, just at slower speeds. However, the carrier's move created confusion among users, and sparked a number of online protests. The protests caught fire when users discovered they were being throttled after only 2 GB of data usage in a month--a lower threshold than the carrier's tiered, unthrottled plans.

"Our unlimited plan customers have told us they want more clarity around how the program works and what they can expect," AT&T said in a statement, according to The New York Times.

Specifically, AT&T said it will now throttle HSPA users after 3 GB of usage and LTE users after 5 GB of usage, and subscribers' speeds will remain slowed throughout the rest of their monthly billing cycle. The carrier will alert subscribers of the change with a text message the first time it slows their speeds, but it won't send another alert if it happens again.

In moving from a percentage-based throttling scenario to one tied to a specific usage limit, AT&T essentially moved from aligning with Verizon Wireless (NYSE:VZ) to aligning with T-Mobile USA. Verizon throttles the speeds of its top 5 percent of users. Meanwhile, T-Mobile throttles the speeds of users who travel over specific data allotments.

Sprint Nextel (NYSE:S), for its part, continues to promise unlimited data service without throttling.

For more:
- see this AT&T statement
- see this New York Times article
- see this CNET article

For more:
Data throttling debate heats up following new study results
Data throttling: Annoying but effective
Allot: 48% of operators throttle data in unlimited plans
Virgin Mobile will throttle heavy data users
Verizon begins limiting bandwidth of heavy 3G smartphone data users
AT&T will throttle heaviest unlimited smartphone data users starting Oct. 1