AT&T Axes Unlimited-Data Plan


Struggling to keep up with the pace of smart-phone adoption in the United States, AT&T announced that it will eliminate its unlimited-data plans for the devices and replace them with a two-tiered system. It's a major change that affects users of iPads and iPhones, as well as all other smart phones on the AT&T network. Coming so soon after Apple's 3G iPad went on sale with a $30 unlimited plan, and amid the general opinion that limited is worse than unlimited, customers are reacting to the news with confusion. As one colleague e-mailed me yesterday: "This kind of sucks, right?"

That’s exactly right—it kind of sucks. It's a one-step-forward, two-steps-back situation. What's good is that many AT&T customers will see their monthly bills go down by $5 or even $15. Those who use their smart phones sparingly can pay just $15 for 200 megabytes of data. The bigger plan costs $25 for two gigabytes—a level that 98 percent of customers do not reach, AT&T says. As for those remaining 2 percent, the ones who download more than two gigabytes of data each month? Well, maybe they should be paying more to use more of the wireless network.

The downside is that this is America. We like unlimited. There's a reason these plans are often described as "all you can eat." Introducing worry and hasty mental arithmetic to everyday smart-phone use—"It’s late in the month; do I have enough quota left to listen to some Pandora, or will that put me over my limit?"—feels antithetical to the promise of these amazing devices. Ads for the iPhone sell you on a device that lets you do everything—record and share video of baby's first steps, satellite-track your exact path through a national park, get personalized music from Pandora while road-tripping. Everything-everything. Not everything-until-you-reach-an-arbitrary-number-of-megabytes-set-by-a-wireless-carrier-that-built-a-network-of-inadequate-capacity.

Part of the confusion right now is consumers' skepticism that AT&T would actually do something in their interest. Massive telecommunications corporations aren't in the habit of charging people less. These are the guys who nickel-and-dime you for simple text messages. If you're confused or upset and e-mail AT&T CEO Randall Stephenson, as one customer says he did twice in a two-week period, you may get a cease-and-desist threat from his lawyers. (Those looking to test the limits of this policy can find Stephenson's contact information here.) 

How will this affect you? AT&T has a useful tool for estimating monthly data use here. And if you're an AT&T customer, there is a way to see your actual monthly data usage: log in to your account, click on "Bill & Payments," then "Billing Reports," and then choose "Data Usage Reports" from a drop-down menu. You’ll get a chart like mine:

I'm a pretty heavy iPhone user, and yet for most months, I actually come in under 200 megabytes. That's because most of my data goes through the Wi-Fi networks at NEWSWEEK and at home, which are faster and more reliable than 3G. This gets to the heart of why AT&T’s switch is bittersweet for consumers. Can the company's 3G network support all that we want to do with our smart phones and tablet devices? Not really. And the new two-tiered system will let many customers pay less to better reflect their lower use of a strained network. But shouldn't wireless carriers be moving closer to offering us everything, not taking steps in the opposite direction? That's an idea that should have unlimited agreement.