AT&T to Cut Data Speeds for Top Heavy Users

AT&T Inc. (NYSE: T) said it will reduce the data browsing speeds for the top five percent of its heaviest users on unlimited wireless data plans from October 1, in response to the explosive data usage growth and network congestion.

This pulled the carpet on those who use unusually large amounts of data through streaming large video and music daily, remote-webcam apps, send large files over the wireless web, or enjoy some online games daily over the wireless network, not Wi-Fi.

"These customers on average use 12 times more data than the average of all other smartphone data customers," AT&T said in a statement. AT&T would start metering once a user hits a certain threshold in each billing cycle that puts them at the top 5 percent of data usage.

But the limiting of data speeds will not affect the vast majority of customers who are either on tiered plans or moderate data users on the unlimited plan, AT&T stressed.

"There will be no changes for the vast majority of customers. It's not how much time you spend using your device, it's what you do with it. You can send or receive thousands of emails, surf thousands of Web pages and watch hours of streaming video every month and not be in the top 5 percent of data users," AT&T said.

AT&T said it will warn users when they are approaching the top layer, and anyone subject to the speed limits will experience them until the next billing cycle starts.

"These customers can still use unlimited data and their speeds will be restored with the start of the next billing cycle," AT&T said in a statement. "Before you are affected, we will provide multiple notices, including a grace period. This change is designed to create a better service experience for all."

But this will not solve AT&T's spectrum shortage and network capacity issues even as it pursues the additional measure. Nothing short of completing the T-Mobile merger will provide additional spectrum capacity to address these near-term challenges, the company said.

Last year, AT&T stopped signing up new customers for unlimited plans. AT&T follows T-Mobile USA, which was one of the first carriers to employ restriction in data speeds.

Now, Sprint has become the sole major US wireless carrier that still offers unlimited data plan, with Verizon having changed to tiers and T-Mobile now throttling when users go over their "Unlimited" plan's 200MB or 2, 5, or 10GB limits.