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AT&T Ends Unlimited iPhone and iPad Data Plans

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AT&T will halt new signups for unlimited cellular data plans for the iPhone and 3G iPad starting 7 June 2010. Instead, the firm is offering two cheaper data plans that have usage limits, but also feature the cheapest overage fees in the United States.

AT&T also said its long-delayed tethering option will launch on the iPhone when iPhone OS 4 - now called iOS 4 - becomes available on 21 June 2010, paired with the more expensive of the two new data plans.

This news was clearly timed to break before Apple's announcement of the iPhone 4 and iOS 4 at Apple's Worldwide Developers Conference (WWDC). It also means that AT&T didn't want to be committed to offering unlimited service for the new iPhone 4.

This announcement would seem to increase the likelihood that Apple plans to announce a deal with Verizon Wireless, though that didn't happen at WWDC. For the last three years, Apple has seemingly required AT&T to offer unlimited plans in exchange for exclusivity for the iPhone and a technical standards limitation that made the 3G iPad an AT&T-only option for cellular data service. The fact that AT&T is changing the deal now would seem to indicate that Apple would prefer to deal with multiple U.S. carriers for future iPhone and iPad models rather than insist on unlimited data plans.


Unlimited No More -- The biggest news in AT&T's announcement is that unlimited data plans will no longer be available to new subscribers. Existing iPhone and 3G iPad subscribers can continue to use unlimited plans until they cancel or change their service plan.

The promise of unlimited data kick-started the iPhone revolution, but also created a host of problems for AT&T; its cellular network quickly bogged down, especially in heavy-adoption areas like New York City and San Francisco. AT&T is investing billions to handle the load, but the problems are clearly still weighing on the firm, which recently launched a pilot project in Manhattan's Times Square to test offloading data to a massive Wi-Fi hotzone.

AT&T launched the original 2G iPhone with a $20-per-month unlimited EDGE (2.5G) and text-messaging plan. For the iPhone 3G's launch in 2008, AT&T raised the fee to $30 per month, and started charging for even a basic text message plan.

The iPad was introduced in January 2010 with the promise that AT&T would offer an unlimited plan of the same ilk - in other words, not a "fair-use" plan, as some European carriers provide, with strict or hidden caps. AT&T offered two plans: $14.99 per month for 250 MB of data, and $29.99 per month for unlimited data.

As of 7 June 2010, AT&T will provide new iPhone customers with two choices: a 200 MB per month DataPlus plan for $15, and a 2 GB per month DataPro plan for $25. AT&T will warn you through text messages and email as you get close to the limits each month.

The 3G iPad, meanwhile, will have its $29.99 unlimited plan replaced with a $25 2 GB offering similar to DataPro. The 250 MB plan for $14.99 will remain available.

If you change your plan on an iPhone or other smartphone to the DataPlus or DataPro offering, or you currently have an auto-renewing unlimited plan on a 3G iPad and halt the renewal or switch to 250 MB, AT&T has confirmed that you will never be able to restart unlimited service. If you're exceeding 2 GB of 3G data usage regularly, you should make a point of keeping the old unlimited plan active.

AT&T claims that 65 percent of smartphone customers - note that the firm didn't say iPhone users - consume less than 200 MB of data each month on average. It also says 98 percent of smartphone subscribers use less than 2 GB on average each month.

Those are weasel words, but good ones. It's well documented that iPhone users consume higher quantities of cellular data. The "on average" qualifier means AT&T customers could go way over usage limits in many months, but still average out much lower. AT&T obviously can't release iPhone usage or histograms of monthly usage because that would show too clearly that these plans aren't as advantageous as the firm would like to pretend, hurting iPhone users and, likely, Android users, who probably consume similar amounts of data. (A company spokesperson confirmed for us that AT&T doesn't break out specific smartphone usage patterns.)

Still, users who regularly stay within 200 MB will see their monthly data bills halved, while heavy users who can stay within 2 GB will save $5 per month. As Glenn found out in February 2010, he was averaging only a bit more than 200 MB per month for the second half of 2009, with the usage trend decreasing. In researching this article, he found his use has dropped further in the last few months. AT&T now offers a simple historical graph of usage. Log in to your AT&T account, click Usage & Recent Activity, then click View Past Data Usage to view these charts. (Also, see "Can You Get By with 250 MB of Data Per Month?," 2 February 2010.)


As another aid to keeping 3G data use down, all of AT&T's plans include unlimited access to its U.S. Wi-Fi hotspot network of 21,000 locations. It's worth pointing out, however, that over 19,000 of those locations are McDonald's and Starbucks outlets, both of which offer free service. (McDonald's is completely free. Starbucks gives you two hours a day after registering a Starbucks Card. See "Find Free and Inexpensive Wi-Fi," 25 March 2010.)


Overage and Underage -- Overage fees on the new plans are structured differently from previous 3G pricing from AT&T or other carriers. In the past, carriers have charged exorbitant amounts, metering by the megabyte, when a set level was exceeded.

Overage rates used to range as high as 20 cents per MB ($200 per GB!), but carriers have been dropping those rates over time. The range is now 5 to 10 cents per MB. (T-Mobile uniquely offers a 5 GB plan that has no overage charges, but usage is throttled to slow speeds after 5 GB is exceeded in a given month.)

AT&T says it will notify smartphone users by text message and email (if the firm has yours on file) when you reach 65, 90, and 100 percent of your monthly data plan's usage. Live data usage is also available from the AT&T myWireless iPhone app, by calling *DATA# from an iPhone, or by checking your account on AT&T Web site. (3G iPad users will receive similar alerts on the iPad and via email, although at slightly different remaining usage percentages.)

After you cross the usage cap on a smartphone in a given 30-day billing period, AT&T will automatically add more data to your account. AT&T is no longer metering by the megabyte, but charging by large data units. DataPlus 200 MB subscribers will see a $15 charge for each 200 MB unit added, while DataPro users will pay $10 for 1 GB - that's one penny per MB. AT&T told us that you can keep using data in 1 GB intervals at that price; there's no cap on how many you can add.

Given that AT&T includes 5 GB of usage for $60 for its laptop 3G plans, $25 for 2 GB plus $30 for 3 GB more is a slight discount.

Unfortunately, AT&T isn't treating unused data like unused voice minutes. If you don't use all your allotted data during the 30-day billing cycle, unused portions expire and don't roll over into the next cycle. That's silly, since AT&T rolls its minutes over with great aplomb. Perhaps another carrier will up the ante by rolling over unused data as a way of competing.

The iPad retains its separate prepaid pricing structure that excludes automatic overage charges. You can purchase and automatically renew either 250 MB or 2 GB of data, or change between them or cancel at any time without a penalty. If you exceed the allotted data within any 30-day period, you can purchase a new 30-day plan for either 250 MB or 2 GB - the clock restarts when you recharge.

(Note that the iPad plan is sold in increments of 2 GB for $25, more or less, compared to the smartphone DataPro plan which includes 2 GB for $25 and then adds $10 for each additional 1 GB purchased within a 30-day billing cycle.)

It's worth noting that iPhone plans in most of the world have never offered unlimited data. For example, Rogers in Canada offers a variety of data plans from 500 MB to 5 GB per month, and Orange in the UK says their "unlimited mobile Internet" offering has a "fair usage policy" that actually limits users to 750 MB per month.

Many non-U.S. iPad data plans have higher usage limits than iPhone plans - ranging from 1 GB to 10 GB per month - but when a limit is hit, the carrier throttles service to 64 Kbps for the remainder of the billing period. (See "International iPad Ship Dates and Prices Announced," 10 May 2010.)

The Vodafone unlimited plan in Australia is now the only one we're aware of in the world that includes unthrottled, unmetered service; it costs Au$49.95 (US$42) per month.


Tether Me -- Amid the sad news of the end of unlimited service and the good news of lower prices for most users, the happy fact that AT&T will start allowing iPhone tethering was nearly lost. Tethering enables a mobile phone to act as a broadband modem, sharing its 3G data connection over Bluetooth or USB to a device (usually a computer) that has the proper driver support. The iPad lacks such support, but Mac OS X, Windows, and many Unix/Linux flavors include it.

Apple added tethering as an option a year ago with iPhone OS 3.0, but AT&T never created a plan with which to use the service. Some international carriers sold iPhone tethering service, and most U.S. carriers allow tethering on other mobile phones for an extra fee.

AT&T will now charge just $20 per month to enable tethering, but the $25-per-month DataPro plan is required. Most U.S. carriers charge $30 per month to add tethering to a data plan. Data usage is counted against the 2 GB limit, so users will have to be cautious about such data-hungry activities as video streaming and software downloads.

Tethering is distinct from mobile hotspot service, with which a smartphone can share its 3G data connection via Wi-Fi to nearby devices. This feature appears in Android 2.2, the Sprint HD Evo 4G phone due out in a few months, and Verizon's versions of the Palm Pre Plus and Pixi Plus phones. Verizon eliminated a mobile hotspot fee for its Palm phones recently, possibly to boost sales. It still charges for tethering on other phones.

AT&T says the new tethering feature will be available for the iPhone once Apple releases iOS 4 on 21 June 2010, which leads us to suspect some changes to the feature from last year's release. The wording of the AT&T announcement implies - though doesn't state outright - that existing iPhone 3G data plan subscribers must switch to DataPro, and lose unlimited service, to add tethering. This seems likely.

Luckily, AT&T does state unambiguously that you can switch back and forth between the new data plans as necessary. It seems likely that you'll be able to toggle the tethering plan on and off each billing cycle, as you can with the iPad data plans, but AT&T hasn't stated that clearly as far as we've seen, although TUAW's article on the topic claims that tethering doesn't require a contract.

As a result, it looks like the new data plans will provide what many of us have wanted: an inexpensive capped data plan for normal usage, but the capability to switch up to a plan with a larger amount of data for anticipated higher usage, and to couple that with a tethering plan. For instance, we might switch to the DataPro plan and turn on tethering for a month when we're planning to attend Macworld Expo, and then switch back to the DataPlus plan the next month.


The Net Effect -- The removal of unlimited offerings will likely have the greatest impact on 3G iPad users. The iPad can consume vastly more data than the iPhone, with apps like Netflix for streaming, and the iPad Camera Connection Kit for transferring full-resolution photos and videos, which can then be uploaded. A 2 GB limit for 3G usage will constrain some users in what tasks they can accomplish.

For iPhone users, however, the limits may not be so severe. On a 2 GB plan, a user would mostly need to avoid downloading apps, podcasts, and media - Apple already limits such downloads to 20 MB each, but those can add up - until a Wi-Fi network is available.

In practical terms, AT&T may have just reduced the usage on its network - or at least slowed future growth - while making some users happier by slashing their monthly data fees in half. For heavy users, it means potentially more fees paid to AT&T, but such people will either pay the fees or adjust their behavior.

The real impact of AT&T's move might be seen later this year. Clearly, AT&T has held its ground on providing unlimited service due to some agreement with Apple. Whatever that agreement was, it would now seem to be off the table, which makes it more likely we'll see some sort of a deal with Verizon Wireless in the future.

 

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Comments about AT&T Ends Unlimited iPhone and iPad Data Plans
(Comments are closed.)

Eric Ullman  2010-06-02 14:03
Great article, guys. Thanks for the useful analysis.

Frankly, I'm ready to pay AT&T's early termination fee to get off their network. I had two conference calls back-to-back yesterday while driving major highways in the SF Bay Area, and I was dropped three times. I look forward to hearing what's up Steve & Co.'s sleeve.
Adam Engst  An apple icon for a TidBITS Staffer 2010-06-02 14:55
Ah, no wonder they just raised the early termination fee too... I believe the term is "coming AND going!"
John Baxter  An apple icon for a Friend of TidBITS 2010-06-02 14:10
I don't think we'll hear "Verizon iPhone" at WWDC coupled with anything meaning "soon". It would be remarkable if Apple has managed to keep FCC certication work on the new hardware required for that totally silent.

Maybe for the holidays if the FCC rushes...more likely 2011.

For me: Verizon doesn't matter. I left Verizon for rotten coverage where I need it, and have excellent AT&T coverage. It's possible that Verizon's coverage has improved. Their map suggests it has; on the other hand the map looks the same as it did when I left.
Glenn Fleishman  2010-06-02 15:06
The FCC allows confidential applications up until a certain point. That's why we haven't seen any public FCC docs about the 4th model of iPhone.

Also, I expect that a Verizon phone is 3+ months away, if it's coming, and that the WWDC announcement is setting a timeline.
attcustomer  2010-06-02 14:39
AT&T claims that 65 percent of smartphone customers - note that the firm didn't say iPhone users - consume less than 200 MB of data each month on average. It also says 98 percent of smartphone subscribers use less than 2 GB on average each month.

So AT&T is saying their infrastructure is so poor that they can't handle 65% of their users only using 200 MB per month ? Who gave them a license to run a stone age cellular network ?
Dave Speers  2010-06-02 15:56
Ah, come ON! This is ridiculous! My wife and I have had iphones for a couple of years and just checked usage, 100MB per month each. We are thrilled to get data we need for half the price. And if we want to access 5GB per month we can pay $55 per month, ($5 less than broadband plan for Verizon, Sprint or ATT), and get even more $10 per gb. (much cheaper than overage fees). And now we can tether an wifi ipad much cheaper than a $60 broadband plan under CONTRACT. We pay as we need, rather than having 2 silly choices 250MB of 5GB. This increases flexibility without binding me to a contract for two years and etfs. I too left Verizon because of its crappy service here and find ATT works great! Tired of all the complaining
Glenn Fleishman  2010-06-02 15:56
Two things:

First, this is all smartphone users. We know iPhone users use more data on average than, say, BlackBerry users. So AT&T is purposely obscuring the percentages here. Likely many more iPhone users use more than 200 MB of data; ditto, more use more than 2 GB, too.

Second, AT&T's primary problems appear to be in specific cities. A recent report on testing I read from a private firm showed that AT&T was delivering great performance on 3G everywhere, with a few exceptions. Those exceptions (pretty much NYC and SF) are what's getting the attention, along with dropped calls which is a network management problem more than a capacity issue.
You and your wife use far less data than most iPhone users, as is clear from AT&T's own numbers, and if you're expecting to be able to run a wifi iPad from a tetherable iPhone, prepare to be disappointed.

There's all kinds of legitimate bad news in these changes, like the bait and switch with the 3G iPad, the apparent loss of the iPad's friendly contract reset terms, the line drawn at 40% of Sprint and Verizon's data ration, and the sheer bloody nerve to charge $20/month for tethering from the same quantity of data you've already bought.

AT&T's coverage in Seattle has never given me much reason to complain, but I'd join the pitchfork brigade now. iPhone/iPad service just got worse to a much greater extent than it got cheaper.
Dave Speers  2010-06-03 19:53
No, we do not use far less data. ATT's own numbers state that 65% of the folk should be able use the $15 per month data plan. That 98% would get along with 2Gb plan. Those are the numbers. I do not see why we should not be able to tether an ipad, but we shall see.

I was shopping around for a way to tether a wifi ipad. I looked at Verizon, Android, Palm, and with the exception of Palm, which provides a nice OS with crappy hardware, but free mobile hotspot, verizon charges $25 to tether the data you've already bought. I believe Sprint does the same. A MIFI is $60 a month, on contract for 24 months, unless I want to pay $300 for the router. (which then turns out to be $12.50 per month for two years and that makes each month's use $72.50 for 5gb). With the iphone tethering plan, I get 5 gb for $75 a month. (Data is $10 per Gb over 2Gb). If I used 6gb I would pay $85 on ATT, on Verizon, $122.50. Even if I used an android phone, 6g, on verizon would be $105 instead of $85.
GREAT COMMENT! I agree, at least now those of us that use less data have options, and do not have to pay as much. Those that use more can pay more!
I'm annoyed at this announcement, but as a matter of principle, not practice. My iPhone usage is well under 2 GB/month, so I'll stand to save a few bucks. (I'm not yet an iPad user, so can't comment there. I'm hoping that we see a multi-device/family data plan sometime soon, but I'm not holding my breath.)

Now, if they decide to do away with their unlimited texting plan, then we've got issues, since one of my children sends enough messages every month to plug the hole in the gulf.
Jeff Bernstein  2010-06-02 18:17
Any news on family plan rates? We have 3 iPhones. I use about 250MB a month, and the other phones use less than 100MB each. Right now I have an unlimited family plan.

Also, what happens when my current contract runs out? Will I lose the unlimited plan?
Glenn Fleishman  2010-06-02 18:33
As far as we know, no family plans for data. I don't believe any carrier offers that, only for voice calling.

If you continue to renew your service after the contract is over, my understanding is that counts as continuing your unlimited service. I believe you only lose it if you cancel service (in or out of a contract period), or if you change to a DataPlus or DataPro plan.
James Katt  2010-06-02 23:08
Comparing AT&T's new rates versus verizon's rates:

For individual plans in the united states:

VERIZON:
Unlimited Talk = $70 a month
Unlimited Text = $20 a month
25 MB Data = $10 a month <--- STUPID. Almost all users will exceed this.
5 GB Data = $30 a month
Tethering = $30 a month
Data over 5 GB = $0.05 per MB = $50 per GB.

AT&T:
Unlimited Talk = $70 a month
Unlimited Text = $20 a month
200 MB Data = $15 a month <--- covers 68% of iPhone users.
2 GB Data = $25 a month <--- covers 98% of iPhone users.
3 GB Data = $35 a month
Tethering = $20 a month
Data over 3 GB = $0.05 per MB = $50 per GB.

AT&T's rates are better compared to Verizon's rates for most. AT&T's Tethering rate is less than Verizon's.

For the 98% of users who use less than 2 GB a month, AT&T is $5 a month cheaper than Verizon, saving $60 a year. With tethering, AT&T is $15 a month cheaper than Verizon, saving $180 a year.

Ideally, AT&T should also have a 5 GB per month like Verizon.
Glenn Fleishman  2010-06-02 23:03
"covers 68% of iPhone users": AT&T said "smartphone" users, not iPhone. I clarified with the company, as noted in the article, that it doesn't break out usage by smartphone model. iPhone users consume more data than other smartphone users. (Even though I consume very little on my iPhone!)

For AT&T, you note: "Data over 3 GB = $0.05 per MB = $50 per GB."

AT&T will charge $10 per 1 GB above 2 GB on the DataPro plan, not 5 cents a MB. The company's press release is a little unclear, but in interviews with TUAW.com and others, it's been clarified that you buy units of 1 GB for $10 each. (If the company was misstating that to several sites, I hope we'll see further clarification.)
I am eagerly waiting to find out if tethering can be toggled on and off. I don't travel enough to pay for it all the time, so if it can't be toggled, it doesn't exist for me.
Adam Engst  An apple icon for a TidBITS Staffer 2010-06-03 06:04
I've just updated the article about that. Although we don't have confirmation from AT&T, TUAW says it doesn't need a contract and should be able to be toggled on and off.
Brian Leslie  2010-06-03 06:41
Can I change my family shared voice plan without losing my current unlimited data plan?
Adam Engst  An apple icon for a TidBITS Staffer 2010-06-03 07:34
Honestly, that's the sort of thing I'd be uncomfortable answering even if I thought I knew, since you're getting into really nit-picky details that could even relate to your particular account.

I strongly recommend calling AT&T and asking the support person.
I checked my iPhone data usage and found only one month when I went over 200mb.

But a look at the bill details showed that a whopping 97mb of that total came one morning at 2:00am--when I was sound asleep! A look at other bills showed similar large transfers in the middle of the night. 

An internet search shows some conversation about this phenomenon, but no one knows what's going on. Those that contacted AT&T got stonewalled.

This doesn't bode well for folks choosing the new $15 plan, who may get socked with what amounts to a double charge for this mysterious nocturnal data. 
Adam Engst  An apple icon for a TidBITS Staffer 2010-06-03 07:32
Desperately trying to avoid nocturnal transmission jokes... :-)
Ash Ranpura  2010-06-03 08:16
Bill, could your "nocturnal transmission" problem, as Adam so maturely puts it (!), be due to email? That's the only thing I can think of that automatically downloads overnight. Are you somehow automatically downloading big attachments?
Glenn Fleishman  2010-06-03 08:27
Something could be syncing, but I can't think of any background capable software (i.e., from Apple) that would choose the middle of the night to sync. Email, contacts, and calendars would be the likely culprits, but iPhone OS automatically downloads only portions of large attachments with email.
Barry Burriesci  2010-06-03 09:22
I'm curious as to what month that was. When I looked at my Data Usage Trend chart for my iPhone the usage was below 100MB every month except March 2010 which spiked at 300MB. Looking at the details I had one 70MB, several 20MB transfers and the rest between 400KB and 10MB. I can't recall any excessive use of my iPhone in March. I noticed that the chart Glen provided in the article also had a spike in March 2010. Did something happen that month to all iPhones? Just curious.
Glenn Fleishman  2010-06-03 09:52
I've got this figured out after checking my bill. AT&T charges out the data at the end of the day each day Pacific time. I see a total for each day cashed out at 11.47 pm or 11.54 pm or whatever.

So this is the sum total of the downloads during the day. AT&T used to detail each download session (you could have hundreds of entries per day) and now summarizes.

So the day that you had 97 MB--did you do a bunch of 3G application updates or music purchases (all under the 20 MB limit)?
Michael Croft  2010-06-07 18:51
So, if we can go back and forth at will, why wouldn't I, upon reaching 90% of my 200MB plan, jump up to 2GB, then down? I'd rather bet 1800MB more for $10 than 200MB.
Glenn Fleishman  2010-06-07 19:20
At will - for the next month! Not within a given month. Which is ridiculous. AT&T should automatically bump 200 MB users to 2 GB (for $10), then charge $10/1 GB after that. It's nonsense to pretend scarcity when you charge $15 for 200 MB on the limited plan but $10 for 1 GB on the high-use plan.
Ed Sawyer  2010-06-08 07:27
$20/month just for tethering is insane and retarded. Just makes one want to join the jailbreak crowd and tether for free (as it should be).
Paul Brians  2010-06-08 09:49
I just logged on to ATT's site and couldn't find the page for changing a data rate plan, but with diligent searching I turned this up:

Question:

How can I change my data plan?

Answer:

Customers can not change a data rate plan online at this time. To change a data plan, please call Customer Service at 1-800-331-0500 (customers with former AT&T Wireless devices call 1-800-888-7600)

I called the first number, got a 2-minute wait and a courteous worker who helped me change to the 200 MB plan (my max use has been 60 MB a month because most of the data I receive on my iPhone is audio).

I also lowered my call plan rate by another $10 by signing up for the Senior Nation $29.99 plan. Judging by recent discussions on TidBits, I'd bet quite a few of us qualify for this over-65 rate. Anytime minutes: 200; Night/weekend minutes: 500.

So I've knocked $25 off my monthly bill. And they backdated the change to last month and are giving me a rebate.

And I had just renewed my ATT plan.
Glenn Fleishman  2010-06-08 10:44
This information doesn't seem to be correct. I was able to log into my account and see a display at which I could change my data plan.

1. Go to att.com and log into your wireless account.

2. In the Quick Links section (which appears to the right of my voice plan info on my account), click Manage Features.

3. Scroll down, and under Web, Text & More, I see all the currently available data and messaging plans for my account, and can select and change them.
Paul Brians  2010-06-11 08:25
Looks like ATT restored to their site the ability to change data plans shortly after I visited it early Tuesday morning.

But here's one reason you might want to talk with ATT by phone. My wife called the 800 number yesterday to change to the new $15/mo data plan. While she had the service representative on the line she asked if they had a cheaper call plan as well. The woman she was speaking with said $39.99 was their cheapest plan, but transferred her to a supervisor who quickly offered her a $29.99 rate.

This is the same as the Senior Nation rate I got, but my wife is not yet 65 and did not mention the senior rate. So ATT is evidently open to dickering. Even better than the deal I got, she gets to keep her hundreds of rollover minutes.

The key may be that she doesn't use her phone very much. Although she had been thinking about switching to a pre-paid cheap phone, she never mentioned that fact. But ATT's got to be aware of the competition.
Adam Engst  An apple icon for a TidBITS Staffer 2010-06-16 09:30
Just a quick note here if you're on an AT&T family plan. If you don't use a lot of minutes, there's a 550 minute plan that's not widely advertised that's $10 per month less than the 700 minute plan. I think this is relatively new; we signed up for the lowest minute plan when we started the family plan in July 2009. Combining that with dropping down to the $15 DataPlus plan (200 MB) for each line and we're saving $40 per month on a bill that was about $150 each month after all the taxes and fees were added in.

So, if you're switching to an iPhone 4 and have to make a visit to an AT&T store anyway, it might be worth asking about the cheaper family plan.