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AT&T's All You Can Eat Plan: Chew Slowly

AT&T's All You Can Eat Plan: Chew Slowly

AT&T's "honoring" of users' existing unlimited plans apparently has its limits. The company is slowing down the top 5 percent so drastically that it might as well cut them off altogether, according to some disgruntled customers. If AT&T continues to shave off the top 5 percent in this manner, it's likely that most, if not all, will eventually choose a different plan -- or a different carrier.

By Rob Spiegel
02/13/12 12:21 PM PT

If you have an AT&T unlimited data plan, and if you're in the top 5 percent when it comes to data use, you may have noticed your download rate has slowed to a crawl.

When AT&T introduced its tiered data plan in 2010, the company emphasized it would honor the millions of customers who had previously signed up for unlimited data plans. However, AT&T has begun slowing down the download performance of the heaviest users among its unlimited data population.

AT&T is warning heavy data users in the unlimited data plan when they are about to enter the top 5 percent in data consumption, suggesting they switch to a tiered plan to avoid experiencing slower speeds. Of course, that means a data cap would be imposed.

After receiving those warnings, users have reported experiencing drastic download performance slowdowns -- equivalent to dial-up speed. At the end of the billing month, performance returns to normal, where it stays unless the user again ventures into the top 5 percent.

They Were Warned

While many users have expressed surprise and outrage, AT&T did announce its intention to throttle speeds of its heaviest data users last summer. AT&T said it would implement the reduced speed beginning in October.

It said it would warn users prior to slowing them down, noting that the heaviest data usage was typically a result of daily streaming of video and music. Online gaming is another data hog. AT&T suggested that users could engage in those download activities more efficiently at home or at the office.

The company reiterated its position on Monday, emphasizing that it was not limiting the amount of data a user could consume -- just slowing down its transfer speeds.

"As we said last summer, smartphone customers with unlimited data plans may experience reduced speeds once their usage puts them in the top 5 percent of our heaviest data users," Seth Bloom, spokesperson for AT&T, told the E-Commerce Times. "We will continue to send reminders and communicate with these customers ahead of time as their usage approaches the top 5 percent."

Most of AT&T's customers will not be impacted, he emphasized.

Make a Few Angry, a Lot Happy

While the policy clearly frustrates the top users among its customers, AT&T expects the move to deliver benefits for the other 95 percent.

"AT&T will upset some power-users in the short-term, but throttling their usage will benefit mass-market users and power-users in the long-term because it will help to unclog their crowded 3G or 4G networks and to maintain an improved quality-of-service," Neil Mawston, director of global wireless practice at Strategy Analytics, told the E-Commerce Times.

AT&T may lose some power-users to rival operators like Sprint, Verizon Wireless or T-Mobile, but that may not necessarily be a bad thing.

"Power-users can consume huge amounts of data, clog up networks and squeeze profit margins," said Mawston, "Seeing some high-usage, low-profit power-users drift to rival operators could help at times to make AT&T a tiny bit more profitable."

Of course, if AT&T continues to throttle the speeds of the top 5 percent of customers in its unlimited plan and the heaviest users go elsewhere, then at some point, the top 5 percent may consist of moderate data users and eventually, even light data users. It appears AT&T's goal is to gradually push all of its unlimited plan users either into a tiered plan or out the door.


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