Rumor Mill: Apple code limits iPhone data speeds on Verizon, AT&T and Sprint

Apple (NASDAQ:AAPL) has inserted code into its iOS operating system that limits the maximum data speeds iPhone and iPad customers can achieve on the networks of Verizon Wireless (NYSE:VZ), AT&T Mobility (NYSE:T) and Sprint Nextel (NYSE:S), according to an iOS developer. It does not appear that the code is affecting iPhones that work on T-Mobile US (NYSE:TMUS), which just started offering the iPhone in April.

The report, from iOS developer Joseph Brown, operator of the website iTweakiOS, said that the code limits the iPhone 5 on AT&T to much slower speeds than the device is capable of producing. However, Brown's post about the data throttling is no longer available online.

Brown told FierceWireless he removed the post after receiving a large number of negative comments and warnings from those in the iOS jailbreaking community that he might face potential legal action from Apple and the carriers. However, he said he stands behind his claims.

According to AppleInsider, Brown wrote that he discovered code that indicates that AT&T's iPhone 5 was limited to HSDPA "Category 10," which tops out at a theoretical peak speeds of 14.4 Mbps. AT&T's HSPA+ network is capable of reaching theoretical speeds of 21 Mbps and its LTE network is capable of reaching speeds even beyond that. According to CNET, Brown wrote that he found code that limited speeds on Verizon's LTE network and Sprint's EV-DO network. He also suggested that the carriers may have asked Apple to insert the code.

"From previous statements released by AT&T and many tech orginizations [sic], iPhones are very complex devices with a very complex OS," Brown wrote in his report. "The OS eats much more data, even when in idle mode, than most phones on the market. So by carrier request, Apple limits devices to 'even out' the network, even if it means Galaxy users out perform Apple devices by such large scales."

Wireless carriers have pushed data speeds, specifically for LTE, as key differentiators. That being the case, it is unclear why carriers would push Apple to limit speeds. If customers use bandwidth, and more data, carriers get more revenue if customers are on usage-based plans. 

"We do not throttle," Verizon spokeswoman Brenda Raney told CNET. She declined to comment on the code. "For that, you would have to call Apple," she said.

AT&T spokesman Mark Siegel told FierceWireless, "You will need to speak with Apple directly about its software." He declined to comment further. An Apple spokeswoman did not respond to a request for comment.

"Sprint does not throttle data speeds on any postpaid device, including iPhone," Sprint spokeswoman Michelle Leff Mermelstein told FierceWireless.

Since September 2011 Verizon has used what it calls a "network optimization" plan designed to limit the bandwidth for the operator's top five percent of 3G smartphone users who are on a grandfathered unlimited data plan. Verizon notes that network optimization is the not the same thing as data throttling since customers' data speeds are reduced only when they are connected to a congested cell site. "Once you are no longer connected to a congested site, your speed will return to normal. This could mean a matter of seconds or hours, depending on your location and time of day," the company said on its network optimization FAQ page.

LTE customers are not affected by the program. Verizon has said one-third of its postpaid customers are on its LTE-only Share Everything plans.

In March 2012 AT&T tweaked its throttling approach for customers with unlimited data plan. It throttles unlimited HSPA users after 3 GB of usage and LTE users after 5 GB of usage, with subscribers' speeds remaining slowed throughout the rest of their monthly billing cycle. AT&T says it throttles some 5 percent of its smartphone customer base after they become guilty of excessive data usage. AT&T said that as of the end of 2012 more than two-third of all of its smartphone subscribers were on usage-based data plans.

While Sprint says it does not throttle users' speeds while they are on the Sprint network, it reserves the right to do so if off-network usage in a month exceeds 300 MB for smartphone plans. For T-Mobile's 500 MB and 2.5 GB Simple Choice plans, speeds are throttled after customers reach those limits.

Rumors have circulated in recent months regarding Apple's alleged insistence that an operator's LTE network must pass Apple's own independent performance testing before the vendor will enable LTE functionality for iPhone 5 handsets operating on that network. A handful of carriers have accused Apple of creating carrier haves and have-nots via such restrictions.

On that list are Tajikistan's leading operator, Babilon-Mobile, and Switzerland's Swisscom, which both have alleged in past months that Apple would not support LTE in iPhone 5 devices used on their networks. Norway's Telenor also joined the list, with CEO Berit Svendsen telling in March that Apple's iPhone 5 will not operate on the operator's 1800 MHz LTE network in the northern district of Tromso, even though the device supports LTE on the same band in the UK and Germany.

For more:
- see this CNET article
- see this AppleInsider post
- see this TMoNews article

Related Articles:
AT&T pays $935 to settle iPhone throttling judgment
Virgin Mobile to begin smartphone data throttling in March
Verizon begins limiting bandwidth of heavy 3G smartphone data users
Apple's LTE restrictions on the iPhone targeted in EU probe
Apple's LTE policy creating carrier haves, have-nots 
Apple still restricting iPhone 5 to approved LTE networks 
Apple: No LTE-enabled iPhone 5 for carriers till we say so

Article updated June 6 at 2:05 p.m. ET with comments from AT&T and Sprint.