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.

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.

About the author

John Moe is the host of Marketplace Tech Report, where he provides an insightful overview of the latest tech news.

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