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Revising the Limits for the Unlimited

A customer at an Apple store at Southpark Mall in Charlotte, N.C., examines the new Apple iPhone during the first day of sales for the device, Friday, June 29, 2007. (AP Photo/Jason E. Miczek).
Jason E. Miczek
A customer at an Apple store at Southpark Mall in Charlotte, N.C., examines the new Apple iPhone during the first day of sales for the device, Friday, June 29, 2007. (AP Photo/Jason E. Miczek).

Sometimes, all-you-can-eat does not mean all you can eat.

Smartphone users who try to get the most out of their devices are learning exactly what that means, even while paying for plans that promise unlimited consumption.

Some of the nation’s largest wireless phone companies are getting around those plans by slowing down a smartphone’s Internet transfer speeds for heavy users. The practice serves as a backdoor limit of data by making some downloads impossible.

The wireless companies say they are trying to find a fair way to manage the swelling demand for mobile data, but consumers are feeling cheated and suspect some carriers are trying to lure them into higher-cost data plans.

“It’s like taking a Ferrari into a dealer, and you get it back, and it only goes 45 miles per hour, and you say, ‘What the heck, dude?’ ” said Matt Spaccarelli, who recently found his phone slowed. “And they say, ‘You’re going 100 miles per hour, and it’s too dangerous for you, but if you pay us more, we’ll let you go fast again.’ ”

AT&T on Thursday clarified the limits of its unlimited data plan. It published a Web page describing what kind of data use might lead to customers’ data connections being slowed — or throttled, as the practice is known.

Previously, AT&T said customers with unlimited data plans who were in the top 5 percent of data users in a given area could be subject to throttling, but it did not give any specific limits. Now the company says that customers with smartphones on unlimited plans for its third-generation network are in the top 5 percent if they download three gigabytes of data in a month.

Three gigabytes are enough to stream more than 1,500 minutes of video or receive 150,000 e-mails, according to AT&T.

AT&T also said customers with newer 4G smartphones who used more than 5 GB of data in a month would be in the top 5 percent of its heaviest data users and would be subject to slower speeds.

Verizon Wireless and T-Mobile said they had not changed their policies in reaction to AT&T’s.

Those three carriers all have some form of a throttling policy, which, they say, helps clear congestion of cellular networks as millions of customers switch from traditional cellphones to data-guzzling smartphones.

But to some customers, AT&T’s throttling seems to be a move to push them to pay more.

Mr. Spaccarelli, 39, a student from Simi Valley, Calif., was streaming an episode of “The Office” to his iPhone late last year when he received a text message from AT&T. “Your data usage is among the top 5 percent of users,” the message said. “Data speeds for the rest of your current bill cycle may be reduced.”

The playback became so slow that the show was unwatchable, Mr. Spaccarelli said, so he shut off the phone and went to bed.

For several days afterward, the data speeds on Mr. Spaccarelli’s iPhone were so slow that checking e-mail, Web browsing and using apps that required an Internet connection were impossible. Unhappy, he sued AT&T in small-claims court in Simi Valley, where he argued that AT&T could not sell him an unlimited data plan while significantly limiting its speeds.

A judge ruled in his favor last Friday, and he won $850. AT&T has said it will appeal the judge’s ruling.

Parul Desai, policy counsel for telecommunications at Consumers Union, an advocacy group, said carriers had not shown evidence for how and when their networks needed to be throttled.

“Is this an issue of where you’re trying to squeeze consumers into limited data plans?” she said. “Are you just trying to move people over to higher-priced plans?”

AT&T, the nation’s No. 2 carrier after Verizon, appears to be getting the most heat. The company disclosed its throttling policy in July, but only recently have some customers begun receiving notices that their connections were being slowed.

AT&T stopped offering unlimited data plans to new subscribers in 2010. But those who already owned a smartphone with an unlimited data plan were allowed to continue.

AT&T’s policy states that customers whose phones are throttled will have reduced speeds until the next billing cycle.

Adam Varsano, 49, who lives in New York, said he was informed his phone was being throttled one day into his new billing cycle.

AT&T’s throttling also kicks in for the heaviest unlimited data users who are in areas with congested cell sites, said Mark Siegel, an AT&T spokesman. But those customers are throttled until the next billing cycle, regardless of the state of the network for the remaining time period.

AT&T is cautious when discussing the topic of throttling. The company declined multiple requests for an interview with an executive, but provided a prepared statement. “AT&T, like other wireless companies, must take steps to manage the exploding demand for mobile data as fairly and as effectively as possible,” the company said.

The company also took the opportunity to push its agenda in Washington. “To meet that demand, we need wireless spectrum, a very scarce resource,” it said. “We have been doing everything we can to get more spectrum through federal government auctions and other means.”

Verizon, which calls its throttling method “network optimization,” said it throttled the top 5 percent of data users on an unlimited data plan only when the network in their area was overloaded.

“Once you are no longer connected to a congested site, your speed will return to normal,” said Brenda Raney, a Verizon spokeswoman. “This could mean a matter of seconds or hours, depending on your location and time of day.”

Sprint Nextel, the nation’s No. 3 carrier, does not throttle its unlimited data customers — a benefit the company is aggressively marketing in its effort to lure customers away from rivals.

Not everybody is convinced that throttling certain customers is the best solution for network traffic. John Aalbers, chief executive of Volubill, a London-based company that advises wireless companies on charging policies, said a problem with data throttling was that it upset customers.

“The connotation is that you’re being punitive and you’re punishing the user when what you really want them to do is have them use more and more of your service,” Mr. Aalbers said.

He said that carriers could create separate types of data plans for customers with specific types of usage patterns.

For instance, carriers could charge people who watch a lot of Netflix videos on their smartphones a little extra — streaming video is one of the most taxing activities on a wireless network.

In exchange the carriers could give those customers priority in gaining access to the higher network speeds so they would get a consistently good connection when watching videos. That way, customers on normal data plans would still be able to enjoy fast Internet speeds, stream the occasional video or play a game and not be throttled either.

David Isenberg, who worked at AT&T Labs Research for 12 years before leaving to start an independent telecom consulting firm, said that carriers could reduce network speeds based on the states of their networks, not specific customer usage.

He said carriers could measure their networks in real time to know when there was congestion and when throttling was necessary. “That would be a slightly less stupid way of managing their capacity,” he said.

While defining unlimited is difficult, AT&T does know how to define one thing clearly.

The company’s terms-of-service agreement, to which every wireless customer must agree to use its products, forbids people from filing class-action lawsuits against it, so disgruntled customers have to fight the carrier one by one. To help them, Mr. Spaccarelli created a Web site, taporc.com, containing the documentation he presented to the judge.

“I don’t want people to think this dude just got lucky,” he said.

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