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Thursday, March 01, 2012, 03:26 pm PT (06:26 pm ET)

AT&T sets threshold for 'unlimited' data plan throttling

A new policy to be applied to AT&T unlimited 3G and 4G data plans puts a cap on the amount of bandwidth users are allowed before being throttled, effectively bringing and end to truly 'unlimited' data use on the company's network.

In an attempt to handle the increasing number of data users on its network, AT&T announced on Thursday that unlimited 3G and 4G LTE subscribers will see a download speed decrease when their usage exceeds 3GB and 5GB, respectively, reports The Wall Street Journal.

The new system is similar to the company's previous "top five percent" plan in that customers approaching the new 3GB per month cap will receive a text message warning that their data speeds will be throttled for the remainder of the billing cycle. Once the period ends, speeds will return to normal, however if the limit is exceeded for a second time, users will not get repeat warning text before throttling is initiated.

Company spokesman Mark Siegel said the new limits were enacted to alleviate confusion over when unlimited data users could expect a slowdown, but declined to give specific details as to how much speeds would be affected.

The Dallas-based telecom giant has created a website to explain the new policy and to answer questions regarding the new changes.

AT&T was the first partner telecom to carry Apple's iPhone, and offered $30 unlimited data plans when the device rolled out in 2007. As the handset's popularity grew, so did the number of data users as the carrier required iPhone buyers to also subscribe to a data plan, a practice that continues today. In June, 2010, the company moved away from all-you-can-eat data subscriptions for a tiered model, which itself saw price bump in January.

Currently, AT&T is facing a near-overload of data consumption as the network's limited amount of wireless spectrum is being filled by a growing number of smartphone users, a large portion of which are iPhone customers.

In the last quarter of 2011 alone, the nation's second-largest mobile carrier activated a record 7.6 million iPhones which accounted for 80 percent of the company's smartphone activations during the period.

To deal with demand, AT&T said that it would reduce the connection speed of the top 5 percent of unlimited data users starting Oct. 1, 2011, though customers began to complain that the company was enforcing stricter limitations in January. Some users were reportedly throttled after using only 2GB of data, which is well below the 3GB allotted to subscribers of identically-priced tiered data plans.

AT&T throttle policy

AT&T attempts to cope with a wireless spectrum shortage by throttling heavy users. | Source: AT&T


In addition to the new bandwidth caps, AT&T is also sending notices imploring those customers who are still using 2G devices to upgrade to a 3G model, despite the apparent lack of spectrum.

"We're simply urging them to upgrade to a new device if they want to," Siegel said.

The letter sent to 2G handset owners warned that a user's "current, older-model 2G phone might not be able to make or receive calls" and a degradation of wireless service in certain areas may be experienced.

According to Siegel, the move is meant to allow for a portion of the existing 2G network to be converted to newer technologies, though the representative fell short of specifying whether the new spectrum would be the iPhone 4S-compatible HSPA+ or 4G LTE.

AT&T's policy announcement comes just days after an iPhone user successfully sued the carrier in a California small claims court, claiming that its implementation of bandwidth throttling was unfair to subscribers. It is unclear whether the new conditions are a result of that suit.