ATandT to Throttle Speed for Users of Unlimited Plan

AT&T said customers in the top 5 percent of users in the unlimited data plan would result in reduced download speeds.

Wireless carrier AT&T announced that starting Oct. 1, smartphone customers with unlimited data plans will experience reduced speeds once their usage in a billing cycle reaches the level that puts them among the top 5 percent of heaviest data users, a move that brings the company closer in line with its competitors' selection of data consumption plans. The company noted these customers can still use unlimited data and their speeds will be restored with the start of the next billing cycle, and before those customers are affected, AT&T will provide multiple notices, including a grace period.

Regarding the top 5 percent of data download users, the company noted these customers on average use 12 times more data than the average of all other smartphone data customers, and noted this step will not apply to the company's 15 million smartphone customers on a tiered data plan or the "vast majority" of smartphone customers who still have unlimited data plans.

"Like other wireless companies, we're taking steps to manage exploding demand for mobile data. Many experts agree the country is facing a serious wireless spectrum crunch," a company press release stated. "We're responding on many levels, including investing billions in our wireless network this year and working to acquire additional network capacity. We're also taking additional, more immediate measures to help address network congestion."

The release said what typically puts someone in the top 5 percent is streaming very large amounts of video and music daily over the wireless network, not WiFi. Streaming video apps, remote Web camera apps, sending large data files (like video) and some online gaming are examples of applications that can use data quickly. Using WiFi doesn't create wireless network congestion or count toward wireless data usage, the company said. AT&T smartphone customers have unlimited access to their entire WiFi network, with more than 26,000 hotspots, at no additional cost, and can also use WiFi at home and in the office.

"The bottom line is our customers have options. They can choose to stay on their unlimited plans and use unlimited amounts of data, but may experience reduced speeds at some point if they are an extraordinarily heavy data user," the company release said. "If speed is more important, they may wish to switch to a tiered usage plan, where customers can pay for more data if they need it and will not see reduced speeds."

Company officials said that even as they pursue this additional measure, it will not solve their spectrum shortage and network capacity issues. Nothing short of completing the proposed $39 billion deal for rival T-Mobile will provide additional spectrum capacity to address these near-term challenges.

While T-Mobile may eventually become the property of AT&T as the two companies plan a controversial merger, T-Mobile announced in April it aims to stay competitive with AT&T with its $80 Even More unlimited calling, texting and data plan on its 4G network. The plan is contingent on a two-year contract and features "no overage charges," according to T-Mobile. However, customers who exceed 2GB of usage per billing period, the company explained in the statement, "will still have access to unlimited data at reduced speeds until their new billing cycle."