AT&T to make throttling policy the same for LTE, HSPA+ subs with unlimited plans

AT&T Mobility (NYSE: T) plans to make its data throttling policy more uniform next year for customers on legacy unlimited data plans, regardless of what kind of smartphone they are using, according to an Ars Technica report.

Currently, customers who have 3G or HSPA+ phones as well as legacy unlimited data plans are throttled for the remainder of their billing period after they exceed 3 GB of data in a month, but only "at times and in areas that are experiencing network congestion." However, while LTE customers with grandfathered unlimited plans do not see their speeds throttled until they reach 5 GB of data usage in a month, their speeds are slowed down for the remainder of their billing cycle at all times--regardless of whether the network is congested.

That discrepancy is what is going to change next year, according to AT&T. "Once technologically available, we expect to adopt the same model for customers with 4G LTE smartphones on unlimited plans sometime in 2015," AT&T told Ars Technica. The company did not say when exactly the change would go into effect.

There are not that many AT&T customers with unlimited data plans anymore. In total, at the end of the third quarter, around 82 percent of AT&T's postpaid smartphone subscribers were on usage-based data plans (either tiered data or Mobile Share shared data plans). That's up from 72 percent in the year-ago period.  

According to data provided by AT&T with its third-quarter earnings, the carrier had 55.8 million postpaid smartphone subscribers at the end of the third quarter, up from 50.6 million a year earlier. AT&T also said that 67 percent of its postpaid smartphone customers had an LTE-capable device, up from 42 percent in the third quarter of 2013.

While LTE smartphone penetration is clearly rising at AT&T, the number of customers with unlimited data plans is also clearly falling--though AT&T has not publicly disclosed exactly how many LTE customers are on unlimited data plans. Like other carriers, AT&T has been steadily pushing customers to usage-based data plans to rake in more revenue off of higher data usage.

In October, the Federal Trade Commission filed a lawsuit against AT&T, alleging that the carrier misled as many as 3.5 million customers with legacy unlimited data plans by throttling their data speeds and changing the terms of their plans. The heart of the complaint is that AT&T failed to adequately disclose its throttling policy. AT&T said the lawsuit does not have any merit.

Due to pressure from the FCC, Verizon Wireless (NYSE: VZ) this fall abandoned plans to throttle the data speeds of customers who are on legacy unlimited data plans who crossed into 5 percent of data users on Verizon's LTE network when they are on high-traffic cell sites. Verizon executives have stressed that such throttling would have only lasted for extremely brief period of time. Nonetheless, the company dropped the proposed policy change. Verizon still has that policy in effect for its 3G CDMA network.

Mike Haberman, Verizon's vice president of network support, told reporters in a roundtable discussion at Verizon's device testing lab yesterday that the carrier abandoned the LTE policy change because it did not think it was absolutely necessary. "There were just users who were way above everybody else, and it wasn't fair that they were getting more of a cell site than others," he said.

"We didn't need to do it, so we're not doing it," he added. "Our cells aren't congested very often."

On T-Mobile US' (NYSE:TMUS) Simple Choice plans, once a customer has used all of the LTE data included in their plan, their data speeds are automatically slowed to 2G speeds for the remainder of their billing cycle. The exception is T-Mobile's $80 per month unlimited plan.

On Sprint's postpaid service, the carrier notes that for its Unlimited, My Way or My All-in plans that "other plans may receive prioritized bandwidth availability" and that "streaming video speeds may be limited to 1 Mbps." Even for Sprint's (NYSE: S) new $60 unlimited plan, the carrier notes that "other plans may receive prioritized bandwidth availability. To improve data experience for the majority of users, throughput may be limited, varied or reduced on the network."

For more:
- see this Ars Technica article

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