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AT&T sets new limit on ‘unlimited’ data plans

Mitchell Hartman Mar 2, 2012

Kai Ryssdal: The second-biggest wireless carrier in the country, AT&T, told us that even though we keep using that word — “unlimited” doesn’t really mean what we think it means. To get you up to speed, if I might, AT&T originally offered pretty nice unlimited data plans to sign up new subscribers back when iPhones were the new new thing. Then, when huge data loads started clogging up the cellular network — long ’bout 2010 or so — they stopped. So the company’s been trying to push subscribers into plans where they pay more if they download more and meanwhile throttle the heaviest users who stick with unlimited.

Marketplace’s Mitchell Hartman explains.

Mitchell Hartman: AT&T stopped offering new customers $30-a-month unlimited data in 2010. They “grandfathered” in all the people who already had the plan — about one-in-five AT&T subscribers.

Now, those people can still download all the video and music and web pages they want, without paying more. But, AT&T is going to deliver it way slower, once you grab more than three gigabytes a month using the cell network.

That works out to about 10 hours of streaming high-def movies, let’s say, Harry Potter’s first four years at Hogwarts.

Carl Howe: The throttling is not a subtle thing.

Throttling is when the data stream is slowed to a trickle, says Carl Howe, technology analyst at the Yankee Group.

Howe: A download of a song that might have taken you 20 seconds, then turns into three or four minutes.

An AT&T spokesman told me today that only 5 percent of all AT&T subscribers ever hit that three gigabyte threshold. He said it’s just a few of the heaviest users who slow down data traffic for everyone else.

And AT&T wants them to pay more when they use the cell network more, says Standard & Poor’s equity analyst Todd Rosenbluth.

Todd Rosenblut: What AT&T would like to do is get existing customers that are on an unlimited plan to migrate to more of a tiered data package, where they’re paying for more of the data quality or the data services that they’re going to use.

AT&T customers who don’t want to get throttled can surf the web on Wi-Fi. Or, switch to one of the carriers that still offer unlimited data plans.

I’m Mitchell Hartman for Marketplace.

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