AT&T Clarifies Data Limitations on "Unlimited" Data Plans

Several months ago, AT&T notified customers that it would begin throttling network speeds for users who exceeded a certain threshold, with the definitive throttle point defined as an imprecise "the top 5% of mobile data users." The company has issued a statement clarifying this policy after irate customers with unlimited data plans demanded to know what the cap was and how the company determined who should and shouldn't be throttled.

The magic number is 3GB, which conveniently happens to be the maximum amount of tiered bandwidth AT&T will sell you. "Our unlimited plan customers have told us they want more clarity around how the program works and what they can expect," AT&T said. "For context, less than 5% of smartphone customers use more than 3GB per month."

So why would AT&T want unlimited  users to move to tiered pricing when its maximum tier is also set at 3GB? Simple -- the amount of money the company makes on customers who exceed that 3GB limit. The fine print reads: "If 3GB is exceeded, an additional 1 GB is automatically provided at a rate of $10 for each additional 1 GB." Anyone using above 3GB on an unlimited plan is a customer who isn't paying enough for the privilege (from AT&T's perspective).

The Internet, according to AT&T

AT&T makes a great deal of noise about maintaining the network's quality of service and the need to crack down on heavy users who, it's implied, are spoiling things for the rest of us. There are two major reasons to doubt such claims. First, AT&T's bandwidth throttle is based solely on a person's usage, not their location or the overall demand for bandwidth at any given time. In reality, this is never the case. At 5PM in a downtown metropolitan area, cellular bandwidth will be at an absolute premium -- a graveyard shift worker in one of the office buildings at 3 AM has no way to saturate the available spectrum, even if they had a dozen phones.

Second, there's the company's pricing. AT&T currently only offers two data plans -- $20 a month buys you 300MB, while $30 buys you 3GB. There's no way that works out to a fair market price in either case; either the 3GB is ludicrously discounted or the 300MB is ridiculously inflated. The point of the lower plan is to scare users into opting for the higher -- especially when you read this gem in the "DataPlus 300MB" fine print:
300MB of data is for use in the U.S. If 300MB is exceeded, an additional 300MB is automatically provided at a rate of $20 for each additional 300MB.
So bits of data are just $10 per GB if you buy 3GB in advance, but $67 per GB if you buy a 300MB plan -- and this somehow reflects the reality of a competitive situation, or maps in some reasonable fashion to issues like spectrum usage and bandwidth availability. The goal here is to push 3GB+ users with unlimited plans over to tiered options where they'll pay at least $40 for that use. If this was truly about keeping the network balanced, AT&T would implement a throttling solution that didn't choke users by as much as 95% once they exceeded the 3GB threshold. It would also offer data plans that created more reasonable tiers of service. As things stand now, AT&T has a major selling point -- if you exceed 300MB a month on the $20 plan, you'll actually end up paying $40 -- $10 more then you'll pay with that nice, roomy 3GB option.

Thus far, Sprint is the only company that continues to offer an unlimited data plan that's actually unlimited. We applaud AT&T's decision to tell folks when they're approaching the 3GB barrier, but it doesn't excuse the company's terrible behavior on virtually every other front.