Jeff Gelles: What are 'data caps' saying?

CHRIS WARE
CHRIS WARE
Posted: February 23, 2012

Here's a prediction: If you haven't yet encountered the concept of wireless or broadband "data caps," you will eventually. And if you love your smartphone, your computer, and all the great new things you can do with them, you won't be pleased by the acquaintance.

On the broadband side, monthly caps have been quietly imposed by many of the major carriers, though at levels likely to bite more in the future than right away. In the Philadelphia region, Comcast has capped monthly usage at 250 gigabytes since 2009, while Verizon still offers unlimited data to both DSL and FiOS subscribers.

But the big furor of the moment - and perhaps a window onto the future - comes from caps imposed on "unlimited-data" customers by AT&T Mobility, the nation's second-largest wireless carrier. When they hit the cap, customers have complained, they find their data speeds suddenly reduced to a crawl for the rest of their monthly billing cycle.

Similar "data throttling" affects customers of T-Mobile and Verizon Wireless, though Verizon rejects the term and says its "network optimization" is more limited, affecting customers "only in specific locations during times of peak demand," according to spokesman Sheldon Jones.

How can you cap "unlimited" data customers, and how many are affected? AT&T, in particular, isn't answering many questions, though all three carriers link throttling to their need to manage network demands.

Spokeswoman Brandy Bell-Truskey offers a statement saying that "this policy only affects smartphone customers with an unlimited data plan if their data usage falls within the top 5 percent of all data users nationwide," and that it also is based on local conditions "such as spectrum, network capacity, and overall local data usage."

"Even if a smartphone customer with an unlimited data plan falls within the top 5 percent of data users nationwide," the statement adds, "it does not necessarily mean that their data speeds will be reduced. For example, in the most recent month, approximately one-half of 1 percent of our total smartphone customer base was affected by this policy."

Of course, for a carrier that introduced the first iPhone and that counts more than 100 million subscribers, that could mean the policy affects 250,000 to 300,000 customers each month.

It's reasonable to suspect that the iPhone, the powerful and data-hungry device that essentially created the smartphone niche, is a key player in this marketplace drama. But that may be something of a red herring.

It's true that the iPhone, along with other smartphones that followed, have put increasing demands on wireless networks. The carriers discovered that - voila! - if you give people powerful computers to carry around in their pockets or purses, those people will use them.

AT&T blamed network demand when it quit selling unlimited-data plans to new customers in 2010 - an easy argument for a company facing frequent complaints about its service quality. So did Verizon, when it dropped its own unlimited-data plan for iPhones last year. Today, only Sprint offers truly unlimited wireless-data plans.

The advocacy group Public Knowledge has voiced skepticism about wireless carriers' data caps - both the official tiers and the "soft caps" that AT&T and Verizon have now imposed on their unlimited-data customers.

"You can almost back into them inadvertently," says Michael Weinberg, a Public Knowledge staff attorney. "If you download a single movie, you may be hitting your cap for a month."

Public Knowledge has asked the Federal Communications Commission to look into the carriers' caps, which Weinberg calls "a total black box" as well as a ham-handed tool for addressing network congestion.

A report this week by Validas.com, a company that analyzes wireless customers' monthly bills, offers a window into the patterns of the customers subject to throttling. Validas' data don't lend much support to the notion that those high-end users are huge data hogs. Even more revealing: There is little evidence that Verizon's or AT&T's "unlimited-data" customers - in both cases, about 40 percent of the sample - stand out for the volume of data they consume.

In fact, Validas found that Verizon's unlimited-data customers used virtually the same amount of data as customers on metered plans. And while AT&T's unlimited-data customers used about 25 percent more data, on average, they still averaged less than 4 gigabytes of data per month.

It's clear that something other than network demand is driving the data throttling. And that something is also fairly obvious:

The desire to push customers off unlimited-data plans as quickly as possible, so that the carriers can cash in on the inevitable and continued growth in data use.


Contact columnist Jeff Gelles at 215-854-2776 or jgelles@phillynews.com.

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