AT&T’s ‘Unlimited Data’ Smartphone Limit

If you are among the 17 million people who signed up for AT&T’s (NYSE:T) unlimited data plan before the company dropped it as a subscriber option in 2010, you might assume you’d have a pretty wide berth for watching videos and downloading and sending large files on your smartphone.

But the reality is different.

The popularity of smartphones in general, and Apple‘s (NASDAQ:AAPL) iPhone in particular, has congested carriers’ networks, including those of AT&T, Verizon (NYSE:VZ), Sprint (NYSE:S), and T-Mobile. But each carrier has a different way of dealing with the congestion. AT&T “throttles back” the data speeds—though not the amount of data—of unlimited-plan subscribers in areas where the network is most congested that month, a recent Associated Press story points out.

Which means that in locations where the network isn’t overburdened, subscribers with tiered, limited data plans of, say, 3 gigabytes of data per month can be using data-heavy services without delay, while unlimited-plan subscribers (slightly less than half of AT&T’s subscriber base) may see their loading speeds drop by as much as 99% for the remainder of that month’s billing period.

“It basically makes my phone useless,” said unlimited-plan subscriber and Orange County, Calif., property manager Mike Trang, who had come to rely on his iPhone for its GPS capability. His phone was throttled recently after 2.3 gigabytes of usage.

Verizon slows down subscribers’ data speeds by the minimum amount necessary only when the cell tower their phone is connected to is congested at that moment. T-Mobile USA starts throttling at 5 gigabytes. Sprint hasn’t yet turned to throttling to manage its network.

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