New AT&T wireless plans limit data usage

Posted June 2, 2010 at 5:53 a.m.

ct-biz-att-data-web.jpgAn AT&T kiosk at a mall in Peabody, Mass. AT&T Inc. will stop letting new customers sign up for its unlimited Internet data plan for smart phones and iPads. (AP Photo/Lisa Poole, file)

Associated Press | In time for the widely expected launch of a
new iPhone model, carrier AT&T Inc. is pulling in the reins on data usage by its customers with smart phones and iPads.

The sole U.S. carrier of the iPhone is introducing two new data plans, starting June 7, with limits on data consumption. They’ll replace the $30 per month plan with unlimited usage that it has required for all smart phones, including the iPhone.

With the change AT&T is adopting a carrot-and-stick approach to assuage the data congestion on its network, which has been a source of complaints, especially in cities such as New York and San Francisco that are thick with iPhone users. The new plans will take effect just as Apple is expected to unveil the next generation of its iPhone at an event Monday in San Francisco.

Subscribers who use little data or learn to limit their consumption will pay slightly less every month than they do now, while heavy users will be dinged with extra consumption fees.

One new plan will cost $25 per month and offer 2 gigabytes of data per month, which AT&T says will be enough for 98 percent of its smart phone customers. Additional gigabytes will cost $10 each.

A second plan will cost $15 per month for 200 megabytes of data, which AT&T says is enough for 65 percent of its smart phone customers. If they go over, they’ll pay another $15 for 200 megabytes.

With that plan and voice service, a smart phone could cost as little as $55 per month before taxes and add-on fees, down from $70 per month. Ralph de la Vega, the head of AT&T’s consumer business, said that means smart phones can become accessible to more people.

“Customers are getting a good deal, and if they can understand their usage, they can save some money,” de la Vega said in an interview.

Current AT&T subscribers will be allowed to keep the unlimited plan, even if they renew their contracts. But all new subscribers will have to choose one of the two new plans.

Figuring out which one to choose may not be easy, given that many people have only a hazy notion of the size of a gigabyte and how many they use now. A gigabyte is enough for hundreds of e-mails and Web pages, but it’s quickly eaten up by Internet video and videoconferencing.

De la Vega said AT&T is doing its part to educate consumers, by letting them track their usage online. The iPhone contains a data usage tracking tool. The carrier will also text-message subscribers to let them know they’re getting close their limits.

Data usage over Wi-Fi, including AT&T’s public Wi-Fi hot spots, will not count toward the limits.

The new $25-per-month plan will replace the current $30 plan with unlimited usage that is available for the iPad, the tablet computer Apple Inc. released just a few months ago, though iPad owners can keep the old plan as long as they keep paying $30 per month, AT&T said.

Paradoxically, the data caps arrive at time when carriers have started to lift the limits on other forms of wireless use, by selling plans with unlimited calling and unlimited text messaging. That’s not a big gamble, because not many people have the time to talk phone for eight hours a day or spend every waking minute sending text messages. But smart phones can draw a lot of data, depending one where and how they’re used. With the new plans, de la Vega hopes to see high-consumption applications like Internet video being steered toward hot spots, where they don’t clog up AT&T’s cellular network.

Consumers have rebelled against the idea of data usage caps on home broadband, at least when the limits are set low enough to make online video consumption expensive. Time Warner Cable Inc. was forced to back away from trials of data caps last year after consumer protests and threats of legislative action.

In the wireless world, where data capacity is more constrained, usage caps are more common. Most wireless carriers, for instance, limit data cards for laptops to 5 gigabytes per month.

But with intense competition for smart phone users, phone companies have been reluctant to impose similar limits on those devices, although Sprint Nextel Corp. reserves the right to slow down or disconnect users who exceed 5 gigabytes per month. It remains to be seen whether AT&T’s rivals will join it in imposing caps or use their own “unlimited” plans as a marketing advantage.



  1. Dave June 2, 2010 at 7:18 a.m.

    Apple has to break away from AT&T. They both knew what they were getting into. Build the network to support demand! They claim they have fixed their network better. I drive 20 minutes from Oakbrook to Woodride. In that span I will drop my calls 2 or 3 times.
    The second someone else supports the Apple line (hopefully Verizon), I will be the first in line to switch.

  2. MrGlitch June 2, 2010 at 7:33 a.m.

    @Dave: get a droid. You won’t miss your iphone.

  3. KLA June 2, 2010 at 7:48 a.m.

    Hopefully this will be the push for Apple to break this AT&T exclusive agreement. AT&T has the absolutely worst plans of any wireless carrier in the U.S. The iPhone has to be the single reason more customers have not dropped them.

  4. Mike June 2, 2010 at 8:35 a.m.

    I’ve had AT&T for years, without an IPHONE, I have Blackberry, with almost no problems whatsoever…

  5. Don't be fooled June 2, 2010 at 8:46 a.m.

    Don’t use this as an argument for switching away from AT&T. It really doesn’t matter what cellular carrier you use – they will all scale back their data plans and it doesn’t matter what phone or mobile OS you use. Getting an iPhone on the Verizon network won’t be the panacea everyone thinks it will be, especially if a large number of people migrate to Verizon.
    I’ve had service from AT&T, Verizon and Sprint/Nextel over the years – and they all have their challenges on coverage areas, data speed and dropped calls.
    Nothing’s perfect and it never will be in these days of “squeeze every last cent out of each and every one of our customers”.
    Find a phone you like, a carrier that has the best coverage in the areas you’re going to be in the majority of the time, and understand their plans. Make a decision and live with it.
    This truly is a case of not being able to fight “city hall”. No matter how many customers switch away from one carrier, there will still be others that migrate to that carrier. It’s all a racket – whatever one company does that proves to be profitable, the others will do in short order.
    A perfect example is the airline industry. The cell carriers are getting to be more and more like them every day.

  6. Stunned June 2, 2010 at 8:53 a.m.

    I don’t believe it. AT&T does something approaching intelligent for once. Tiered data plans? Clipping the worst of the data hogs, and making them pay for jamming up the networks? Giving smaller users a realistic plan? What happened, did the suits in the corporate offices swallow smart pills?
    This is the first consumer friendly act I’ve ever seen from this outfit. I’m waiting for the other shoe to drop, because this makes far too much sense to come from (mini) AT&T.

  7. MarineMom1125 June 2, 2010 at 9:48 a.m.

    I would love to have an IPHONE..however, due to the poor reception that AT&T has in our area I am not able to get one. I have Verizon…never have a problem with dropped calls no matter where I travel.

  8. Frank Watson June 2, 2010 at 10:21 a.m.


  9. bisco4business June 2, 2010 at 4:55 pm

    This is total bs from at&t. So 98% of the users won’t be effected by this? According to at&t 2% of the users are screwing everything up. That is a bunch of bs! Anyone who believes this is a good move is an idiot(Don’t be fooled). If you go over the 2 gig limit its an extra 10 dollars per gig. Right there your paying 35 dollars. The 200mb plan is even a bigger joke. Whats the point in even owning an iphone then with only 200mb. Sounds to me like at&t wanted it all and they couldn’t handle it. You watch these plans will eventually be overturned and back to unlimited. Most users will not tolerate this and will look for the right provider. Especially users who like to stream music or video. Don’t forget updates count as usage. You can pretty much say your limit will be compromised in less than a day. At&t users need to call the home office and let them know your dissatisfaction.

  10. BertoE June 5, 2010 at 11:48 pm

    Who cares? If the unlimited will be grandfathered for current ATT IPHONE users then what difference does it make to anyone who already has it… just sucks for the new guys..

  11. Nick June 7, 2010 at 11:17 a.m.

    Everyone should protest at&t even more than they do now.
    I stream music and video a lot, because well that’s the main reason for paying for a phone thats a pc.
    If people just put lipstick on for at&t nothing will change.

  12. Dexer June 12, 2010 at 3:54 a.m.

    what is everyone complaining about? 2GB a month! that’s a massive allowance of data for a PHONE, regardless of what you are using it for. The UK get a cap of 500-750 MB per month and that suffices the most hardcore of users