Another One Bites The Dust – AT&T Revises Its Unlimited Data Plans

You can kiss your AT&T wireless unlimited data plan goodbye. I’ve always enjoyed my AT&T service, and at one point last summer, I was using over 4GB of data a month, mostly to stream MLB.TV to my iPhone.

AT&T came into the month of March roaring like a lion, springing new guidelines on subscribers who had previously been able to use a limitless amount of the network’s wireless spectrum with little or no consequences.

The Nuts and Bolts

AT&T’s new “limited” unlimited data plan policy goes like this:

  • If you subscribe to 3G service, you’ll receive a text message once your monthly data consumption nears 3GB; if you use AT&T’s LTE platform, you’ll get that text message as you approach 5GBs of data usage.
  • Once you go over that limit, you’ll still be able to use your phone to talk, text, upload and download videos, pictures, and songs, as well as access various applications.
  • However, your data speed will be drastically slower until the start of your next billing cycle.

AT&T estimates these new data usage guidelines will only affect the heaviest five percent of smartphone customers. It definitely could affect me (and would this summer), but I’ll be more careful with my usage not to go over the 3GB. Still, it’s a bit annoying to be promised unlimited data and then have the rug pulled out from under you.

The Reason Behind The Change

AT&T had previously phased out its unlimited data plans for new customers nearly two years ago, but allowed customers – mainly iPhone users who bought the device between 2007 and 2010 – to remain grandfathered in to the unlimited tier. A year later, Verizon also dropped its unlimited plans,

leaving Sprint as the only major U.S. wireless carrier to offer unlimited data to new smartphone customers.

Why are so many wireless companies dropping these data plans? The reason can be summed up in two words: wireless spectrum. Although wireless spectrum is an intangible resource – it’s definition is the infrastructure over which wireless communications of all kinds flow – it is, much like AT&T’s revised unlimited data plan, is quite limited. The Federal Communications Commission says America’s current spectrum surplus could evaporate into thin air as early as next year.

Unlimited talk, text, and data plans have played an enormous role in the consumption of wireless spectrum in the United States. Innovation Space, an AT&T blog, reported last month that data traffic on its network has exploded over the last five years to nearly 20,000 percent of its pre-iPhone levels. While AT&T’s newly-clarified “unlimited” plan won’t stop smartphone subscribers from draining more of the wireless spectrum, the company hopes that by slowing down data speeds for the heaviest users, it will become less desirable to do so.

Wireless Spectrum And Your Bottom Line

A 2010 study by J.D. Power and Associates found the average American spends $78 a month for their wireless service – that’s per person, not per family or household. That number could climb even higher if our country’s wireless carriers can’t figure out a way to reign in our rabid appetite for data usage.

How? The reason is twofold:

1. Simple supply and demand: the less wireless spectrum available, the more valuable it becomes.

2. Fewer wireless carriers: as large providers buy up smaller ones in search of more wireless spectrum for their networks, the number of competitors will drop. You don’t need to be a student of Adam Smith to know that a lack of competition on the open market leads to higher prices for all.

And what will you get for a higher price on even the most basic data plan? Even less than you’re getting now. Two additional side effects of a wireless spectrum crunch would be slower data speeds and a less-stable network, leading to more dropped calls and failed data transmissions.

Reader, what does your current wireless data plan look like? Do you – or have you – subscribed to unlimited data plans? What do you think about providers’ attempts to pull back on your data usage?

5 Responses to Another One Bites The Dust – AT&T Revises Its Unlimited Data Plans

  1. Michelle says:

    Ours is $30 a month each for 5GB, I think. Whatever the second highest internet plan is, that’s what we have. I think $30 is ridiculously high though.

  2. I have a truly unlimited plan that is never throttled with T-Mobile because I’m grandfathered in, but I never use it. I think the max I use is 2GB a month.

    With that being said, you can reduce your data usage significantly by using Wi-Fi when available and should really never hit 5GB anyway

    • Daniel says:

      @Kevin @ Thousandaire.com, if my work had wifi, I’d never have to worry. My peaks were in the days when I wasn’t always on wifi when I was home, so great tip.

  3. I’m paying $30 a month for unlimited data with AT&T. Since I got my first iPhone back in 2007, I didn’t think I’d have to worry about limits. Oh, and my wireless bill is already an absurd $125 a month. I’d better start paying attention to these kinds of changes.

  4. frugalportland says:

    Sprint doesn’t do that!

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