AT&T has a lot of strange ideas about mobile data. The company is trying to fend off competition, while simultaneously squeezing grandfathered unlimited data users and extracting profit from new corners of the industry in ways that may violate notions of network neutrality.
Mobile Share Value Adds Rollover Data -- Let’s start with the good. About 50 million AT&T mobile customers who have its Mobile Share Value plan will automatically have unused data from one month added to the available pool for the next month. This Rollover Data feature doesn’t require activation. Data will start rolling over on account cycles starting 25 January 2015. About 70 million customers don’t qualify, including legacy Mobile Share customers and prepaid subscribers.
AT&T charges overages on its Mobile Share Value plans at rates of $20 per 300 MB for its 300 MB plan, $20 per 500 MB for its 1 GB plan, and $15 per 1 GB on its 3 GB and higher plans. Plans are available from 300 MB to 100 GB, and costs are based on data plus devices. A 1 GB plan costs $25 per month plus $25 per unsubsidized smartphone or $40 per phone under a two-year contract (including unlimited voice time and texts). A 10 GB plan with two phones would run $100 plus $15 per phone, for a total of $130 per month before tax.
Unused data rolled over from a previous month expires at the end of the current month, unlike the way that rollover calling minutes used to work (and sometimes still do) with limited calling plans, where rollover minutes persisted for a year. For those who go over their limit occasionally, Rollover Data could save non-trivial amounts of money.
Imagine you have a 10 GB plan and use 5 GB in November, 12 GB in December, and 3 GB in January. Your unused 5 GB from November would roll over to December, removing the $30 overage fee, but no data would roll over from December to January. The 7 GB unused from January would roll over to February, however, making 17 GB available without risk of overage fees.
You can see how paying occasional overage fees could dramatically increase overall cost, encouraging users on older plans to migrate to a Mobile Share Value plan with Rollover Data, despite the limitation of a single month’s data rolling over.
A similar T-Mobile upgrade announced in December 2014 rolls unused data over for up to a year. T-Mobile doesn’t charge overage fees; rather, after your contracted allotment is up, it throttles your data rate to 64 Kbps or 128 Kbps for the remainder of the month. More on throttling below.
My family upgraded as we had no legacy grandfathered data offerings, and AT&T’s Mobile Share Value plan increased our data cap from 3 GB to 10 GB for $10 less per month. Since we rarely approach the limit of our plan, we might consider dropping our data cap to 6 GB, which, due to the vagaries of per-phone pricing, would reduce our monthly cost by $15 per month.
Hard Throttle Back, Carriers -- On a less pleasant front, AT&T is defending its throttling of grandfathered unlimited data plans and expanding its program to allow companies to pay AT&T directly to avoid tapping into your monthly data pool. T-Mobile was recently dinged by the FCC for not disclosing its throttling rates and terms as well.
For those who may not recall, when Apple introduced the iPhone in 2007, the initial data plans on AT&T (and later on Verizon Wireless) were unlimited, which became problematic for the carriers when iPhone sales went through the roof and their network expansions didn’t proceed as quickly as anticipated.
In 2010, AT&T killed unlimited data plans for new customers, and other carriers soon followed. (AT&T has a hilarious “pity us” site about this.) However, those who kept their original plans and transitioned phones were allowed under contract to keep unlimited data. The carriers have tried various incentives to get people to give up on these plans and shift to tiered plans with limits and overage fees.
In 2012, AT&T decided that it should put the screws on unlimited-plan users, and began throttling what it called its “top 5 percent of users,” which could mean people who exceeded just a couple of gigabytes a month. More recently, AT&T established a policy of throttling data speeds after 3 GB of data usage on 3G or “4G” (really 3G+) networks and after 5 GB of data usage on 4G LTE phones, regardless of what network style is in use.
In October 2014, the FTC called foul on this, suing AT&T and noting that throttling is “deceptive” and “unfair,” two tests the FTC uses to bring cases. This is similar to a 2007 case in which Verizon settled with New York State after an investigation into the company throttling a mobile data plan advertised as “unlimited.” Verizon also pulled back on plans to throttle 4G LTE customers.
Note that lawsuit came from the Federal Trade Commission, which handles consumer issues, not the Federal Communications Commission, which deals with regulation and compliance for telecommunications and related industries. The FTC said it worked closely with the FCC. In a filing to have the FTC suit dismissed, AT&T said on 8 January 2015 that the FCC is separately considering fining it over the same issue, and that the FTC lacks the authority to proceed.
T-Mobile got into hot water over throttling last year as well. It said in August 2014 that it wouldn’t throttle its unlimited data customers, despite a leaked memo that said it was going to squeeze customers who violated terms and services — including “heavy” data users, a term that remained undefined. T-Mobile has the option to throttle all of its customers already, and was forced by the FTC in November 2014 to clarify those limits — subscribers are knocked down to 64 Kbps or 128 Kbps speeds, depending on their plan. However, it hasn’t yet had to backtrack on its unlimited plan.
Meanwhile, AT&T has begun selling “subsidized” services to a few businesses, now numbering 10. These companies can provide data to AT&T customers that doesn’t count against monthly data usage totals. The companies in question are quite small, and don’t include any major consumer, business, or media brands. The program could be construed as violating net neutrality in a loose sense, by providing a channel for some companies that isn’t available to others except for a fee, rather than, say, a higher-speed path for those who pay.
Monitoring the Situation -- The trouble with how AT&T and other carriers approach this situation is that they are trying to mitigate what might be very reasonable problems by changing terms of service and redefining English words. These legal tactics damage their reputation, and encourage consumers to switch services.
You might recall that AT&T wanted to buy T-Mobile in 2011, and fierce opposition from the FCC and the Department of Justice quashed the deal. The government’s argument was that such a merger would reduce America to two major networks (AT&T/T-Mobile and Verizon) and one medium-sized one (Sprint). T-Mobile’s behavior following the deal’s cancellation proved the point: we would all be paying more for less if T-Mobile had been acquired.
The Rollover Data plan from AT&T is more of what we should see: carrots, not sticks based on throttling. If AT&T wants its grandfathered unlimited users to give up the plan, the company should offer them something comparable and eat the cost up front. Give them all 100 GB-per-month plans and a free iPhone — something that compensates for the loss, provides AT&T with more predictable network usage, and eliminates this relentless stream of petty and negative behavior.