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.

A “disruptive market force” in France’s mobile phone market has turned an expectation of fat, easy, and fast profits on its head as companies scramble to slash prices to meet the challenge of a new player in town.

That “disruptor” is Free Mobile, owned by French broadband service provider Iliad.  In December, Iliad’s Xavier Niel delivered an early warning shot to other cell phone providers in France:

“Start cutting your prices! We are coming. Go away this weekend, rethink your marketing strategy and that way you might have a chance to continue existing.”

Evidently they were not listening, or did not believe Niel.

In January, Free Mobile arrived with prices shocking to a French market used to paying much more.

For $26.50, Free Mobile delivers a plan with unlimited calling, messaging, 3GB of mobile data and free international calls to 40 countries in North America and Europe.

The nearest comparable plan, Orange France’s “Sosh,” charges more than $66 for a similar range of features.  That’s more than double the price.

“Up until now you have been cash cows,” Niel said during a press conference introducing the service. “Now you can either call your current operator and ask for the same price or join us.”

The French people are doing both. Panicking operators that have lived happily on fat profit margins made possible by a generally uncompetitive marketplace were shocked out of their complacency and have begun lowering their own prices as customers threaten to leave for Free Mobile.

La Poste Mobile for example, which has about 550,000 customers, announced three new plans that start at prices comparable to Free Mobile, but include a subsidized phone — something Free Mobile does not offer.  Instead, Free Mobile splits any upfront equipment costs into installments which run the length of the contract, up to 24 months.

Other companies are turning to their marketing departments to solve the problem, resulting in some wild marketing claims that play fast and loose with the facts. Curious about Clientverge? Learn all about them here. French consumer group UFC-Que Choisir has heavily criticized a handful of providers that claim to provide unlimited calling and texting but then limit call time to 200 hours per month in the fine print.

Free Mobile’s offer has resonated across France and at least 1,000,000 people signed up in January, overwhelming the country’s number portability system allowing customers to change providers and keep their current phone number.  The overwhelming majority of Free Mobile’s customers come from other carriers.  Sixteen per cent switched from Bouygues Telecom, 22 per cent from SFR and 30 per cent from Orange France, with most of the rest switching from resellers who lease airtime from the three largest providers in France.

Financial analysts opine that if Free Mobile is here to stay, it will have a major impact on the French mobile marketplace, first on resellers that offer service delivered over other companies’ networks.  French unions fear their workers will pay the price as providers protect investments and management perks.

CGT, SUD and the CFE-CGC suggest wage and job cuts for workers will come as companies look for savings to offset their profit losses.  One report predicted as many as 10,000 job cuts in the mobile industry in the future.

Ironically, while Iliad, a French broadband provider, has challenged the French mobile market and has brought price savings to consumers, American cable companies capitulated on competition, selling their wireless spectrum to the country’s largest wireless company, Verizon Wireless.  Additionally, American cable and phone companies have agreed to market their products together in bundle offers, potentially eliminating any serious competition between them.

AT&T 3G MicroCell

AT&T has lost another customer.

PC World‘s Tony Bradley noticed reception on AT&T’s network in suburban Houston has been losing bars in more places than it has maintained over the last few years.

“[…] for reasons unknown to me the AT&T network in my area has been getting steadily worse. There have been a couple of weak spots in the same location for years. Rather than improving and eliminating those weak spots, the weak spots became dead zones…and then proliferated.

I don’t live in the boonies. I live in suburban Houston in a community that is very near a major highway, and yet there are four or five areas with literally no service. I could almost understand if the signal decreased, or if it switched from 3G to the older Edge network in places, but in 2012 in an affluent suburb near a highway there is no excuse for a company like AT&T to have any area where my phone literally displays “No Service”.

Even with the growing dead zone epidemic, I was still reluctant to switch. I maintained that the grass is always greener, and that I was better off to stick with the devil I know. That is, until I moved.

I only moved four miles, and I am still in the same community I was in before. However, in my new house the AT&T signal is too flaky and unreliable. I have to walk to special places in my house to get a workable signal, and even then I am told constantly that I am “breaking up” by the person on the other end of the line. I often miss calls because there is no signal and my phone doesn’t even ring. I don’t realize I even had a call until I receive the voicemail.”

AT&T’s response to these kinds of reception problems is to suggest customers purchase one of their 3G MicroCell units, which delivers a wireless signal inside your home or business connected through your broadband account.  But Bradley took exception that AT&T would charge him $200 (negotiated down to $100) and a monthly service fee just to mitigate the company’s own reception problems.  AT&T has since lost Bradley as a long-lasting customer — he took his business to Verizon Wireless, which offers better reception in his neighborhood.

The columnist cannot understand why AT&T would treat a long-term customer so poorly.

“AT&T could have kept me happy, but chose to let me leave instead,” Bradley writes.  “So, let me get this straight. AT&T isn’t capable of delivering the service I am already paying for, and the proposed solution is that I spend $200 (or $100 after a lengthy and heated debate), plus additional money every month for the privilege of routing my calls over the broadband Internet service I am also paying for? That was really the last straw for me with AT&T.”

Comcast’s controversial deal with Verizon Wireless to cross-promote cable and wireless service has come to fruition in Washington and Oregon with a new introductory offer pitching Comcast’s Xfinity cable with Verizon Wireless service that includes a $300 customer rebate.

The first appearance of the new joint marketing effort started this week in metro Seattle and Portland, and includes nearby communities.  Comcast employees are now staffing at least eight Verizon Wireless stores in Seattle, primarily to pitch the company’s cable service.

The most aggressive offer includes a Visa prepaid card rebate of up to $300 for new customers who agree to bundle Comcast’s phone, Internet, and television service with a new Verizon Wireless smartphone or tablet plan, assuming the two companies can find enough new customers who do not already subscribe to cable or mobile service.

Traditional telephone companies like CenturyLink and Frontier Communications, which provide service in the region, appear to be most at risk from the bundled service promotions.  CenturyLink provides landline telephone service and DSL bundled with satellite television.  Frontier does the same and also offers a limited part of the region FiOS fiber to the home service it acquired from Verizon Communications.

Should customers sign on to the bundled offer from Verizon and Comcast, there would be little reason to do business with either CenturyLink or Frontier.

Consumer advocates like Public Knowledge, along with smaller cell phone companies, satellite provider DirecTV, and other consumer groups have co-signed a letter to the Federal Communications Commission raising questions about the parameters of the cross promotion deal, which the companies and groups say “could be a significant realignment of the competitive landscape in these industries.”

Broadband everywhere, except where it isn't.

Comcast is willing to install cable service for a neighborhood in Ashburnham, if six families agree to split the estimated $94,000 installation fee.

Paying more than $10,000 each just to get cable television from the nation’s largest cable operator is not a top priority for those living on Old Pierce Road and Rindge State Road, but getting reliable Internet access is.  Comcast officials have refused all requests to extend cable service to the families, because there are simply too few of them in the company’s eyes to justify the expense.

Families were surprised to find neither Comcast or Verizon interested in serving the neighborhood, because state broadband maps show coverage in Ashburnham from both the dominant cable and phone company.  Comcast suggested the families sign up for satellite Internet service or use a wireless provider instead.  But families complain paying Verizon Wireless or AT&T for mobile broadband is expensive and has resulted in rationed Internet use because of very low data caps.  Even worse, when the weather turns bad, the wireless Internet service effectively turns off.

The affected families want better answers.

“I’m not afraid to spend $400 to get out of a [wireless] contract if I can have Internet when it’s cloudy out,” James LeBlanc of Rindge State Road told the Sentinel & Enterprise. “But I don’t have $10,000 just sitting in my pocket.”

Wireless broadband for rural Massachusetts is simply not a serious solution for most because of the low usage allowances that accompany the service.

“It’s difficult when it’s raining out, and we can’t get online, and I have to tell my kids, sorry, you can’t do your homework tonight,” his wife, Wendy LeBlanc told the newspaper. “My oldest goes to Overlook (Middle School) and I’m going to have to send in notes for any assignments that require Internet research to be done at school.”

“It’s a hardship for our family,” said Brian Belliveau, of Old Pierce Road. “We don’t have enough Internet service. We get into situations where we use all of our data within the first two weeks of the month and have to go without it the rest of the month. Our kids are in school with kids who have service all the time, and they don’t understand why we don’t. It’s hard to explain.”

Comcast’s attitude so far has been ‘tough luck — it’s a money thing.’  Company officials simply won’t front the construction and installation costs because it would take too long to recoup that investment.  That leaves the families with few alternatives.

Although Ashburnham, a community of 6,000 in north-central Massachusetts, is considered “rural,” it is not nearly rural enough to qualify for federal broadband funding.  Besides, according to broadband mapping data supplied by area cable and phone companies, Ashburnham is already “well-served” with broadband.  But don’t tell that to families without Internet access.

Local officials were stunned the multi-billion dollar company wouldn’t assume upfront expenses in return for goodwill and devoted, long-term paying customers.

“I may be sort of old-fashioned, but a company sometimes has to do what is in the best interest of its customers to gain their loyalty,” Selectman Gregory Fagan said. “I’m offended when you say the company can’t afford it. Our schools are giving our children Internet assignments. There’s been discussion of giving tablets to all kindergartners. It’s not like in the ’80s when these things were a luxury. They are must-haves now.”