AT&T data throttling and the great customer ripoff

Not too long ago AT&T began sending iPhone customers text messages notifying them they were using what the carrier considered too much data. These customers were owners of unlimited data plans, normally a plan that would be safe from hitting a cap.

AT&T told the customers if they remained in the top 5 percent of data users in their particular area they would throttle speeds for the rest of that billing period. True to its word, customers started seeing bandwidth drop to the point of being largely unusable.

Dwight Silverman of the Houston Chronicle has a good overview of what AT&T is doing, along with how the other carriers are handling similar situations. It's not good no matter how you look at it.

Last year AT&T moved most customers to a tiered data plan with a paid data cap. Once the monthly cap is exceeded, overage fees apply for any data used over the cap. Customers with an existing unlimited plan were grandfathered in, and it's clear AT&T didn't like that one bit. The throttling is a direct result of the carrier's trying to force unlimited customers onto a "more reasonable" tiered monthly plan.

As if the throttling wasn't chicken enough, AT&T refuses to tell the customers how much data they are allowed before getting lousy dial-up speeds imposed. According to AT&T they are throttling the top 5 percent of data users in a given area. That definition is meaningless to the customers affected, as it's up to AT&T to determine when a given user enters the top 5 percent club. One day you're not in the top 5, the next you are. I've heard from quite a few who have been throttled, and the magic data number seems to be around 2.1 GB of data usage when the dreaded throttling kicks in.

It seems to me this constitutes a drastic change in the terms of contract the customers have with AT&T. How much more can a contract change than from unlimited to a random cap that triggers throttling? According to those I've spoken with the throttling is so severe it renders the iPhone virtually unusable for most things due to the horribly slow speeds. If that's not a change of contract terms I don't know what is.

I'm not a lawyer but I would think these throttled customers could cancel their service with AT&T without an early termination fee. The problem is if they did, what could they then do? It's not like they can just take the iPhone to any other carrier. Both Verizon and Sprint networks are CDMA networks so AT&T iPhones won't work. Sadly, the only real alternative to eliminate the worry of throttling is to cave in to AT&T and switch to a capped plan. At least they'd know how much data they get before having to worry. According to those who have complained to the carrier they've basically been told to lump it.

What AT&T is doing is particularly offensive if you put it in perspective. Imagine you rent a car that comes with unlimited mileage. You drive it for a few days and then suddenly it will only do a top speed of 30 mph no matter what you do. When you contact the rental agency they tell you that you have already driven enough miles to be in the top 5 percent of rental customers in your area, so they have throttled the car's top speed. You're stuck the rest of the month puttering along, for the same cost as other customers speeding on the freeway. When you complain you're given the option of giving the car back and going somewhere else. Not a great position to find yourself in, yet that's exactly what AT&T customers are facing.

This situation makes me happy with my Verizon iPhone plan with a 4 GB cap plus 2 GB of additional hotspot data. That's costing me $40 monthly, which is turning into a real bargain compared to the AT&T $30 "unlimited" plan.

Have you been throttled by AT&T? Let us hear from you in the comments. At what data level did the throttling kick in, how slow it is, etc.

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