1
AT&T's plan to thwart big data users
Shoppers pass an AT&T phone store at the Mall of America in Bloomington, Minn. The company will soon start thwarting users who take too much data each month.
To view this content, Javascript must be enabled and Adobe Flash Player must be installed.
Jeremy Hobson: If you're one of the 17 million people who use AT&T for your mobile phone service, there will be no more unlimited data for you -- even if that's what you signed up for. AT&T says it will slow down the connection speeds of people who use more than 3 gigabytes of data -- like email, web browsing and apps -- within a month.
Marketplace Tech Report host John Moe joins us now with the details. Hi John.
John Moe: Good morning.
Hobson: So, why is AT&T doing this?
Moe: Well, the company line is that they want to slow down the people who are consuming a lot of data -- the datahogs, as they're commonly referred to -- but doing this thing called "throttling," which is to slow down the data after a certain point to ease up work on the network.
The other argument is they're trying to move people out of this unlimited, all-you-can-eat plan, and into a tiered plan where they can make a little bit more money off those same people.
Hobson: Why don't they just add more capacity?
Moe: They tried, but the broadcast spectrum is a tricky thing, and they tried to do that with the acquisition of T-Mobile, and obviously, that didn't work out.
Hobson: Are the other phone companies going to do the same thing as AT&T's doing?
Moe: T-Mobile already is, and they've made no secret about that. There's been some speculation -- some independent testing -- that Verizon slows down unlimited customers after they reach a certain data point, while not slowing down customers who use just as much data on a tiered plan.
But you can see, if you turn on the TV lately, Sprint is running a bunch of ads saying: unlimited means unlimited; come over here to Big Yellow; it's all going to be fine. But one wonders how long even Sprint can keep that up.
Hobson: All right, well I guess the big question, John: Is this going to actually cause any AT&T customers to leave?
Moe: I think it could cause a lot of confusion and frustration if you don't know why it's slowing down. You can just say: Well, this network isn't any good, I'm going to leave and go somewhere else. And so, it might cause a lot of people to leave, but it might cause people to run into the same problem if they go somewhere else.
In the meantime, I think a lot of people are just going to say: Eh, I'll just use wi-fi instead to do what I need to do.
Hobson: John Moe, host of Marketplace Tech Report, thanks so much.
Moe: Thanks Jeremy.
Telecom companies and Internet companies keep offering new services which outstrip all available bandwidth requiring expensive build-outs of new networks while never bringing in enough income to pay for themselves. But this is a new one, penalize those who respond to your offerings...
An AT&T executive at a industry meeting last year pointed out that SMS/texting was 40X more profitable but video was 1/1000 as profitable. What does that tell you?
