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Comcast Proves It Doesn’t Need a 250GB Usage Cap; Net Neutrality Violation Alleged

Comcast Monday announced it was exempting its new Xbox streaming video service from the company’s long standing 250GB monthly usage cap, claiming since the network doesn’t exist on the public Internet, there is no reason to cap its usage.

Net Neutrality advocates immediately denounced the cable operator for violating Net Neutrality, giving favorable treatment to its own video service while leaving Netflix, Amazon, and others under its usage cap regime.

Public Knowledge president Gigi Sohn:

“The Xbox 360 provides a number of video services to compete for customer dollars, yet only one service is not counted against the data cap—the one provided by Comcast.” Sohn said. “This is nothing less than a wake-up call to the Commission to show it is serious about protecting the Open Internet.”

Stop the Cap! believes Comcast also inadvertently undercut its prime argument for the company’s 250GB usage cap — that it assures “heavy users” don’t negatively impact the online experience of other customers:

We work hard to manage our network resources effectively and fairly to ensure a high-quality online experience for all of our customers. But XFINITY Internet service runs on a shared network, so every user’s experience is potentially affected by his or her neighbors’ Internet usage.

Our number one priority is to ensure that every customer has a superior Internet service experience. Consistent with that goal, the threshold is intended to protect the online experience of the vast majority of our customers whose Internet speeds could be degraded because one or more of their neighbors engages in consistent high-volume Internet downloads and uploads.

The threshold also addresses potential problems that can be caused by the exceedingly small percentage of subscribers who may engage in very high-volume data consumption (over 250 GB in a calendar month). By applying a very high threshold on monthly consumption, we can help preserve a good online experience for everyone.

Comcast argues around the exemption of the Xbox service by reclassifying it as somehow separate from the public Internet.  The company then tries to claim the Xbox app functions more like an extra set top box, not as a data service.  But, in fact, it –is– a data service delivered over the same cable lines as Comcast’s broadband service, subject to the same “last-mile congestion problem” Comcast dubiously uses as the primary justification for placing limits on customers.

Cable providers who limit broadband use routinely use the “shared network experience” excuse as a justification for usage control measures.  Since cable broadband delivers a fixed amount of bandwidth into individual neighborhoods which everyone shares, a single user or small group of users can theoretically create congestion-related slowdowns during peak usage times.  Cable operators have successfully addressed this problem with upgrades to DOCSIS 3 technology, which supports a considerably larger pipeline unlikely to be congested by a few “heavy users.”

Comcast’s argument the Xbox service doesn’t deserve to be capped because it is delivered over Comcast’s own internal network misses the point.  That content reaches customers over the same infrastructure Comcast uses to reach every customer.  If too many customers access the service at the same time, it is subject to precisely the same congestion-related slowdowns as their broadband service.  Data is data — only the cable company decides whether to treat it equally with its other services or give it special, privileged attention.

Even if Comcast argues the Xbox streaming service exists on its own segregated, exclusive “data channel,” that represents part of a broader data pipeline that could have been dedicated to general Internet use.  The fact that special pipeline is available exclusively for Comcast’s chosen favorites, while keeping usage limits on immediate competitors, is discriminatory.

Comcast customers who have lived under an inflexible 250GB usage limit since 2008 should be wondering why the company can suddenly open unlimited access to some services while refusing to adjust its own usage limits on general broadband service.

Stop the Cap! believes Comcast has forfeit its own justification for usage caps and network management techniques that can slow customer Internet speeds.  We have no problem with the company offering unlimited access to the Xbox streaming service. But the company must treat general Internet access with equal generosity, removing the unjustified and arbitrary usage cap it imposed on customers in 2008.  After all, if the company can find vast, unlimited resources for a service it launched only this year, it should be able to find equal resources for a service it has sold customers (at a remarkable profit) for more than a decade.

Anything less makes us believe Comcast’s usage caps are more about giving some services an unfair advantage — violating the very Net Neutrality guidelines Comcast claimed it would voluntarily honor.

Stop the Cap! strongly believes usage caps are increasingly less about good network management and more about controlling and monetizing the online experience, seeking marketplace advantages and new revenue streams from consumers who already pay some of the world’s highest prices for broadband service.  As we’ve argued since 2008, Internet Overcharging through usage caps and usage based billing is also an end run around Net Neutrality.  The evidence is now apparent for all to see.

[Thanks to our readers Scott and Yannio for sharing developments.]

AT&T’s ‘Data Tsunami’: Upselling Customers for Higher Profits During Spectrum ‘Crisis’

Phillip Dampier March 26, 2012 AT&T, Broadband "Shortage", Data Caps, Editorial & Site News, Online Video, Public Policy & Gov't, Video, Wireless Broadband Comments Off on AT&T’s ‘Data Tsunami’: Upselling Customers for Higher Profits During Spectrum ‘Crisis’

Phillip "The Mayans Never Met AT&T" Dampier

AT&T has used the specter of a nationwide wireless bandwidth crisis to pressure Washington to adopt its agenda for additional mobile spectrum.  But talk of a looming “data tsunami” has done nothing to stop AT&T from heavily marketing their most data-hungry devices — smartphones and tablets to customers.

In fact, the “broadband shortage business” has become enormously profitable for the former Ma Bell.

Switch to a Smartphone

Wireless carriers like AT&T aggressively market smartphones because they drive the highest average monthly revenue earned from customers.  So far, the marketing push has been an unparalleled success.  PricewaterhouseCoopers reported smartphones accounted for 48% of all wireless phone sales in 2011, up from 30% in 2010.  More than half of customers upgrading their old phones chose smartphones to replace them — an enormous increase over just 36% of upgrades in 2010.  Because smartphones are designed for an online experience, most companies mandate customers subscribe to a data plan, often adding $30 or more per phone, per month to a wireless phone bill.

AT&T’s 4th quarter results told the story, and it was all smiles.  AT&T celebrated customer enthusiasm for smartphones and the data they consume with no worries about “data tsunamis” or “bandwidth crises”:

  • In 2011, AT&T’s growth engines — wireless, wireline data and managed services — represented 76 percent of total revenues and grew 7.5 percent versus 2010, led in the fourth quarter by:
    • 10.0 percent growth in wireless revenues
    • 19.4 percent growth in wireless data revenues, up $956 million versus the year-earlier quarter
  • 9.4 million smartphone sales, best-ever quarter and 50 percent more than previous quarterly record and nearly double 3Q11 sales; 82 percent of postpaid sales were smartphones
  • Best-ever quarter for Android and Apple smartphones, including 7.6 million iPhone activations

Double-Digit Growth for Wireless Revenues. Total wireless revenues, which include equipment sales, were up 10.0 percent year over year to $16.7 billion. Wireless service revenues increased 4.0 percent, to $14.3 billion, in the fourth quarter.

Wireless Data Revenues Increase 19.4 Percent. Wireless data revenues — driven by Internet access, access to applications, messaging and related services — increased by $956 million, or 19.4 percent, from the year-earlier quarter to $5.9 billion. AT&T’s postpaid wireless subscribers on monthly data plans increased by 16.4 percent over the past year. The number of subscribers on tiered data plans also continues to increase. About 22 million, or 56 percent, of all smartphone subscribers are on tiered data plans, and about 70 percent have chosen the higher-tier plans.

Wireless Margins Reflect Record Sales. Fourth-quarter wireless margins reflect record-setting smartphone sales and customer upgrade levels. This was offset in part by improved operating efficiencies and further revenue gains from the company’s growing base of high-quality smartphone subscribers.

Forcing Customers to Upgrade… Or Else

AT&T's 2G Exit Strategy Started in 2009 (Courtesy: Blackberry News)

Back in 2009, AT&T decided it was inventory clearance time, released a memo entitled “2G Exit Strategy,” and slashed prices on 2G “feature” or “messaging phones” to attract customers looking for a bargain.  A few years later, the company is now sending letters to some of them strongly recommending they upgrade to a new, potentially more expensive phone.  If they don’t, AT&T writes, “your current, older-model 2G phone might not be able to make or receive calls and you may experience degradation of your wireless service in certain areas.”

AT&T hopes many customers will adopt smartphones, because the plans that accompany them are far more expensive than the 2G “messaging” plans they replace. AT&T wants to repurpose 1900MHz 2G spectrum for other services, but sometimes customers are left holding the bag if they don’t want the designated replacement phone(s) AT&T is willing to provide.

In Grand Valley, Col. last fall, AT&T created lines outside its stores as customers were compelled to upgrade phones and service plans to continue reliable AT&T service:

AT&T isn’t actually discontinuing the 2G network — it is moving 2G service to less-favorable spectrum it owns in order to make room for improved 3G coverage.  That might work fine in areas less expansive and rugged than western Colorado, but in the Grand Valley, it means many customers will find they no longer have data service at all.

The ongoing tower upgrades have also disrupted cell service generally, and when customers arrive at AT&T’s stores to complain, the employees on hand attempt to upsell them more expensive phones to “fix” the problem.

“There is significant pressure on carriers to migrate to the most efficient networks while needing to address the issue of spectrum scarcity,” explains PricewaterhouseCoopers’ Dan Hays. “We are beginning to see carriers shut off legacy networks and force customers to migrate to new technologies.”

Internet Overcharging for Profit Without Raising Company Costs

Courtesy: Broadbast Engineering

AT&T has no worries about data tsunamis and "exafloods" when app makers or consumers are willing to pay more.

With customers seeking to get the most out of expensive wireless data plans, data usage naturally goes up. But so do prices, meaning the “data tsunami” carriers warn about is not bad for their bottom line at all.

In 2011, consumer research group Validas found average data consumption was up 34.7% for all users, from 448.8MB in January to 604.8MB by December.  AT&T responded with a price increase and an allowance boost that will benefit only a tiny minority of customers.  The most popular data plans now cost $5 a month more: $30 for 3 gigabytes, up from $25 for 2GB and $50 for 5GB, up from $45 for 4GB.  But Validas found only 5% of wireless customers use more than 2GB of data per month, with only 2.7% using more than 3GB.

That translates into higher AT&T bills for the 97% of customers who don’t come close to using even 2GB a month.  Although the price hike delivers no tangible benefit to the overwhelming majority of customers, it does deliver an extra $5 a month from their bank account to AT&T’s.

The “Anyone Pays But Us” Model for “Heavy Traffic”

With online video “clogging” the wireless airwaves, companies like AT&T should be interested in offloading as much video to wired or Wi-Fi service. But late last month, the company suggested a way customers could bypass its stringent data caps by allowing content companies to pay for the wireless traffic their customers generate.

“A feature that we’re hoping to have out sometime next year is the equivalent of 800 numbers that would say, if you take this app, this app will come without any network usage,” said John Donovan, who oversees AT&T’s network and technology. “What they’re saying is, why don’t we go create new revenue streams that don’t exist today and find a way to split them … “It’d be like freight included.”

Only wasn’t the railroad already overburdened with traffic, threatened with a nationwide slowdown?  If one is willing to flash enough money, it’s remarkable how quickly the tidal wave of wireless congestion and despair can be pushed back out to sea.  Just don’t tell Washington lawmakers.  This is a crisis of epic proportions after all.

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/Bloomberg Carriers Facing Data Tsunami 3-21-12.mp4[/flv]

Derek Kerton, principal analyst at Kerton Group, talks about increased demand for data and the impact on wireless carriers. Kerton compares it to today’s gasoline prices. Demand=higher prices.  Wall Street folks like Kerton thinks more spectrum isn’t the total answer.  Smaller cell sites and more Wi-Fi might be.  Otherwise, prepare for bill shock.  (4 minutes)

Data Mining Your Customer Service Experience; Some Customers Better Than Others

Phillip Dampier March 20, 2012 Broadband Speed, Consumer News, Wireless Broadband 1 Comment

Not all mobile customers are treated equally.

That is the conclusion of a new piece in MIT’s Technology Review, which found wireless companies carefully data mine their customers in an effort to keep their best (and most profitable) customers happy, while leaving those who pay substantially less or enjoy an unlimited data plan on hold.

The concept of “big data” — the practice of collecting and analyzing customer usage, payments, and services, has become part of today’s sophisticated data analysis used by wireless companies to target their highest level of service to their best customers.

In practice this means big spenders might cut ahead of others in customer service call queues, be given priority on wireless carriers’ networks, and be pampered with discounts, service credits, and other special offers when service goes awry.

Carriers merge data about network problems—such as how many dropped calls a consumer experienced—with unstructured data such as the transcripts of complaints to customer-service representatives, deciphered by voice-recognition software and searched for angry keywords.

For customers enrolled in expensive “tiered” data plans, the carriers are vigilant to respond with refunds or discounts on re-enrollments; they tend not to be so generous to customers with resource-guzzling unlimited data plans.

The article did not name any specific carriers, but says selective customer-service treatment is “common industry practice in the United States.”

In Europe, disparate treatment goes even further.  When congestion starts slowing down a provider’s data network, some will boot customers with unlimited data plans onto inferior networks which treat the interlopers as second-class citizens, subject to reduced priority and even throttled speeds in some instances.

It is all designed to maximize profits by keeping the most profitable customers happy, even if lesser customers make due with less.

Data mining opens the door to even bigger profits in the days ahead, especially with contextual and location-based advertising that leverages your location with retailers who believe you can be enticed to stop in their stores in return for a discount offer or coupon sent to your smartphone.

“We’re at the beginning of an era in big-data analytics,” says Antonio Rodriguez, a venture capitalist who works at Matrix Partners in Cambridge, Massachusetts. “If you think about the treasure trove of data they have—it’s question of how they tow the privacy line between what they have access to and what they do with it.”

CNN Turns Over Tech Reporting to Wireless Lobby for ‘Sky is Falling’ Scare Stories

Phillip Dampier February 27, 2012 AT&T, Broadband "Shortage", Competition, Data Caps, Editorial & Site News, Public Policy & Gov't, T-Mobile, Video, Wireless Broadband Comments Off on CNN Turns Over Tech Reporting to Wireless Lobby for ‘Sky is Falling’ Scare Stories

CNN's Scare Stories on Wireless

As part of our ongoing coverage of the telecommunications industry, I talk with a variety of reporters in both Canada and the United States.  We have educated local newspapers, national wire services, local TV news, and even big national consumer magazines about the problems consumers have with the North American telecommunications industry.  Whether you are a wireless customer facing eroding usage caps and increasing prices, or a wired broadband customer now being slapped with Internet Overcharging schemes that monetize your usage, the truth about why your bill has gone up isn’t too hard to find, if you bother to look.

Unfortunately, CNN-Money just published a “week-long” series on the wireless mobile phone market that might as well have been written by the CTIA, the nation’s cell phone lobby.

The Spectrum Crunch” was supposed to be a sober and objective report about the state of congestion on America’s cell phone networks. Instead, the reporter decided industry press releases and lobbyist talking points were good enough to form the premise that America is deep in a cell phone crisis.

Sorry America, Your Airwaves Are Full

Part one of CNN’s special report is a laundry list of disaster predictions, explaining away rate increases and usage caps, and an industry-skewed view that the answer to the “crisis” is to give wireless carriers all the frequencies they want.

The spectrum crunch is not an inherently American problem, but its effects are magnified here, since the United States has an enormous population of connected users. This country serves more than twice as many customers per megahertz of spectrum as the next nearest spectrum-constrained nations, Japan and Mexico.

When spectrum runs short, service degrades sharply: calls get dropped and data speeds slow down.

That’s a nightmare scenario for the wireless carriers. To stave it off, they’re turning over rocks and searching the couch cushions for excess spectrum.

They have tried to limit customers’ data usage by putting caps in place, throttling speeds and raising prices. Carriers such as Verizon, AT&T, Sprint, T-Mobile, MetroPCS and Leap have been spending billions to make more efficient use of the spectrum they do hold and billions more to get their hands on new spectrum. And they have tried to merge with one another to consolidate resources.

The FCC has also been working to free up more spectrum for wireless operators. Congress reached a tentative deal last week, approving voluntary auctions that would let TV broadcasters’ spectrum licenses be repurposed for wireless broadband use.

[…] The bad news is that none of the fixes are quick, and all are expensive. For the situation to improve, carriers — and, therefore, their customers — will have to pay more.

The United States also covers more ground, with lots of wide open spaces where frequencies can be used and re-used without interference problems.  As AT&T keeps illustrating, how you run your business has a lot to do with the quality of your service, spectrum crisis or not.  AT&T customers in heavily-populated urban markets cope with dropped calls and slow data not because the company has run out of frequencies, but because AT&T has failed to appropriately invest in its own network.  AT&T’s problems are generally not shared by customers of other carriers.  Even T-Mobile, which has the least spectrum of all major carriers, does not share AT&T’s capacity issues.

CNN reporter David Goldman suggests mergers and consolidation have been a solution for ‘wireless shortages’ of the past.  But are mergers about consolidating resources or leveraging profits?

The spectrum war’s winners and losers

AT&T’s failed $39 billion bid for T-Mobile was largely aimed at getting its rival’s spectrum. The Department of Justice and the Federal Communications Commission killed the deal, saying it would be too damaging to wireless competition.

That put the entire industry on notice: The carriers will have to solve their problems without any blockbuster takeovers.

The regulators’ main concern was that the deal would take the ranks of national carriers down from four to three. That’s why experts now expect the big players to focus instead on acquiring smaller, low-cost carriers like MetroPCS and Leap Wireless. Their spectrum could relieve capacity issues in large metro areas, which are the places most crippled by the crunch.

Industry analysts also think that Sprint and T-Mobile could gain approval to merge, though that’s a bit like two drowning victims clinging together. Sprint is losing piles of money every quarter, while T-Mobile is hemorrhaging customers with contracts.

Another possibility is that several carriers could partner in a spectrum-sharing joint venture.

But the most likely scenario is that the carriers continue fighting each other to snap up the last remaining large swaths of high-quality spectrum.

Stephenson

The claim that AT&T sought the purchase of T-Mobile USA for spectrum acquisition falls apart when you examine the record.  For instance, during AT&T CEO Randall Stephenson’s presentation at the merger announcement, shareholders were told the buyout would deliver cost synergies and savings, would stabilize earnings from a more predictable mobile market (with T-Mobile’s ‘market disruptive’ pricing out of the way), and would allow the company to secure additional frequencies.  However, as Stop the Cap! reported back in August, documents released by the FCC showed AT&T unprepared to specify what T-Mobile spectrum it expected to acquire, much less how the company intended to use it.

The “problem” AT&T sought to solve, in the eyes of both the Justice Department and the FCC, was pesky competition from T-Mobile and the reduced profits AT&T endured as T-Mobile forced competitors to deliver better service at lower prices.

Even Goldman admits T-Mobile had the smallest inventory of wireless spectrum among the major carriers — scant reason for AT&T to court a merger for spectrum purposes.

The spectrum winners continue to be AT&T and Verizon, who have the largest inventory of favorable frequencies, and both continue to warehouse spectrum they are not using for anything.

Your Cell Phone Bill is Going Up

Has your mobile phone bill jumped this past year?

Get used to it.

Demand for wireless data services is soaring, forcing carriers to invest massively to keep up. They have two main options: Upgrade their network technology or acquire more wireless spectrum to give them more bandwidth.

“Massively” is in the eye of the beholder.  Verizon outspent AT&T on network upgrades and continues to enjoy enormous returns on that investment.  Most major cell companies spend billions on network improvements, but also earn tens of billions from their customers.  Yet in the midst of the “spectrum crisis,” AT&T CEO Randall Stephenson told investors revenue was up — way up:

“We’ll expand wireless and consolidated margins. We’ll achieve mid-single-digit EPS growth or better. Cash generation continues to look very strong again next year. And given the operational momentum we have in the business, all of this appears very achievable and probably at the conservative end of our expectations.”

AT&T’s chief financial officer John J. Stephens put a spotlight on it:

In 2011, 76% of our revenues came from wireless and wireline data and managed services. That’s up from 68% or more than $10 billion from just 2 years ago. And revenues from these areas grew about $7 billion last year or more than 7% for 2011. We’re confident this mix shift will continue. In fact, in 2012 we expect consolidated revenues to continue to grow, thanks to strength in these growth drivers with little expected lift from the economy.

[…] We also continue to bring more subscribers onto our network with tiered data plans, more than 22 million at the end of the quarter, with most choosing the higher-priced plan. As more of our base moves to tiered plans and as data use increases, we expect our compelling [average revenue per subscriber] growth story to continue.

That’s a story AT&T has avoided sharing with customers, because more than a few might take exception that the past year’s rate increases have more to do with the company’s “compelling growth story” than a spectrum shortage.

CNN could have reported this themselves, had they bothered to look beyond the press releases and talking points from the wireless industry. The reporter even conflated recent increases in early termination fees as part of the “spectrum shortage.”

Readers have to glean the real story by reading between the lines.  Here is an example:

As Suraj Shetty, Cisco’s marketing chief, puts it: “Data caps are curbing the top 1% of users, but not the top 20%.”

For carriers, finding the sweet spot is a delicate balancing act. Heavy data consumption is costly for them. On the flip side, smartphone users, who are typically required to buy pricey monthly data plans, are their most lucrative customers.

The ideal customer is someone with a smartphone they use sparingly.

That reality could eventually be reflected in your monthly bill. All four of the major carriers declined to comment about their future pricing strategies, but analysts expect them to start experimenting with new “pay for what you consume” approaches.

The real agenda is finding customers who buy the most service and use it the least.  Usage caps and throttles don’t even work, if one believes Mr. Shetty.  Curbing one percent of your heaviest users does little to curtail congestion when the top 20% remain within plan limits and create an even greater strain on the network.

It’s another hallmark of Internet Overcharging — monetizing broadband usage while using “congestion” as an excuse.  If a customer uses 10GB on an unlimited usage plan or 10GB on a limited use plan, the impact on the network is precisely the same.  Only the profit-taking is different.

There Are Solutions

Only in the last part of the series does CNN’s reporter discover there are some practical solutions to the spectrum crunch.  They include:

  • Splitting cell phone traffic to reduce tower load.  Adding additional towers is one solution, but not all have to be huge, unsightly monstrosities.  In parts of Canada and Europe, new “micro-cells” on top of traditional power poles or buildings can reduce tower load, especially in urban areas.  These units, which can fit in the palm of your hand, are especially good at serving fixed location users, such as those sitting at home, work, or in a shopping center.  They don’t create eyesores, are relatively inexpensive, and are effective.
  • Allocation of spectrum.  The FCC is working on making additional wireless spectrum available.  Some carriers are cooperating to alleviate capacity issues, share towers, and collaborate on new tower planning.
  • Consider Wi-Fi.  AT&T found offloading traffic to Wi-Fi and even home-based “femtocells” — mini in-home cell towers have effectively reduced demand on their wireless 3G/4G networks.  There is still room to expand.

[flv width=”576″ height=”344″]http://www.phillipdampier.com/video/CNN Solutions to the spectrum crunch 2-2012.flv[/flv]

Alcatel-Lucent has a solution to the capacity crunch — a microcell cube that can be attached to a building or phone pole.  (3 minutes)

AT&T’s 2GB Speed Trap: “I’m Almost Scared to Use the Phone,” Says Frustrated Customer

An increasing number of wireless data users are getting some tough love courtesy of AT&T.

“Your data use this month places you in the top 5% of users,” the text message reads. “Use Wi-Fi to avoid reduced speeds.”  Our regular reader Earl hopes we’ll keep spreading the word.

AT&T’s speed throttle has now moved beyond the pages of tech blogs and into USA Today, where the newspaper explores the trials and tribulations of wireless data management policies at the nation’s largest wireless companies.

Mike Trang, along with at least 200,000 other AT&T customers, has been caught in AT&T’s wireless speed trap.  The result can be speeds punitively reduced to dial-up for the remainder of a billing cycle, leaving customers on AT&T’s “unlimited use” plan waiting up to two minutes for a single web page to load.

While AT&T tells the newspaper it only throttles the speeds of unlimited customers who use an average of 2GB or more per month to ease congestion (if that), the company’s “congestion problems” seem to disappear when customers switch to a usage-billing plan that charges fees based on different usage allowances:

Trang’s iPhone was throttled just two weeks into his billing cycle, after he’d consumed 2.3 gigabytes of data. He pays $30 per month for “unlimited” data. Meanwhile, Dallas-based AT&T now sells a limited, or “tiered,” plan that provides 3 gigabytes of data for the same price.

Users report that if they call the company to ask or complain about the throttling, AT&T customer support representatives suggest they switch to the limited plan.

“They’re coaxing you toward the tiered plan,” said Gregory Tallman in Hopatcong, N.J. He hasn’t had his iPhone 4S throttled yet, but he’s gotten text-messages from AT&T, warning that he’s approaching the limit. This came after he had used just 1.5 gigabytes of data in that billing cycle.

Many customers who have received the text message warning about their usage now think twice about everything they do with their phone, which may be part of what AT&T intended for its remaining customers grandfathered on a now-discontinued unlimited use plan.

John Cozen, a Web and mobile applications designer in San Diego, told USA Today he’s now “almost scared to use the phone.”

Cozen’s complaints to AT&T have been ignored and now he’s shopping for a new carrier.

AT&T’s warning-and-throttle system is the strictest among America’s largest wireless carriers. When customers exceed AT&T’s arbitrary declaration of being among the “top 5% of users,” their speeds are subject to severe slowdowns until their next bill is issued. This leaves customers who may have needed their phone at the beginning of the month for a business trip or vacation suddenly throttled for weeks because of what AT&T calls “congestion,” even if nobody else is using the cell tower.  Even worse, customers not yet deemed to be offending AT&Ts usage manners, or who pay per gigabyte, can overload a cell tower and create the very congestion AT&T claims it hopes to manage.  But only “unlimited use” customers get “time out” in the usage penalty corner.

Among other carriers:

  • Verizon Wireless also uses a network management system that can throttle speeds for exceptionally heavy users, but their speed throttle is engaged only when individual cell towers are overloaded with traffic, and the speed reduction level will vary with the amount of traffic on that tower.  When congestion eases, speeds return to normal for everyone;
  • T-Mobile throttles customers after a maximum of 5GB of usage per month, unless other arrangements are made with the company;
  • Sprint Nextel does not have usage limits or a throttle on smartphone data plans at this time.

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