Customers Howl Over AT&T Data-Use Curbs
By ANTON TROIANOVSKI And GREG BENSINGER
Joe Philipson had such a bad customer-service experience with Sprint about six years ago that he distributed flyers bashing the wireless carrier and started a blog called "I Hate Sprint."On Friday, the 27-year-old freelance photographer in Rochester, N.Y., was considering becoming a Sprint Nextel Corp. customer again.
"I might have to go make a deal with the devil," he said.
The reason: AT&T Inc.'s new policy limiting high-speed wireless data usage for its 17 million customers who still subscribe to unlimited data plans. The change has drawn a furious response from some AT&T customers who say the carrier is changing the rules for some of its most loyal customers.
It could also be a boost for Sprint, the nation's third-largest carrier, which is trying to compete with larger rivals AT&T and Verizon Wireless by being the only national carrier still selling an unlimited data plan. Sprint struggled for years with a reputation for poor service, but has won much better reviews recently, evidenced by a sharp drop in the percentage of customers leaving the carrier each quarter.
Mr. Philipson's comments echoed those of many disgruntled consumers who criticized AT&T on Facebook and Twitter on Friday. Some, however, were more conciliatory, arguing that customers in the smartphone age should no longer expect to be able to get as much wireless data as they want without paying for it.
Some commentators saw AT&T's new policy as more generous than its previous policy, under which it slowed Internet use for the top 5% of unlimited data users in individual markets. That vague limit sometimes resulted in users seeing their Web-surfing slowed after they had only used around 2 gigabytes of data.
"We're hearing from customers that they appreciate the clarity that only those who use 3GB or more of data—less than 5% of smartphone customers—are impacted," AT&T spokesman Brad Burns said.
Three gigabytes is well more than typical smartphone users consume – enough to stream about 10 hours of high-definition video or about 100 hours of music. AT&T says the limit will only affect a small percentage of its unlimited-plan subscribers. Technology analysts, however, expect mobile data use to continue growing quickly, meaning the cap could eventually start to feel more restrictive.
AT&T says it needs to limit the data use of its most voracious customers, because the popularity of data-guzzling smartphones is straining the No. 2 U.S. carrier's network. In January, AT&T Chief Executive Randall Stephenson suggested that the government's successful effort to block AT&T from buying smaller rival T-Mobile USA, a $39 billion deal that AT&T said would have helped it address its network congestion, would hurt consumers.
"In a capacity-constrained environment, usage-based data plans, increased pricing, managing the speeds of the highest volume users—these are all logical and necessary steps to manage utilization," Mr. Stephenson said in a January conference call with analysts.
Jordan Hackworth, who switched to AT&T from Sprint in 2010 to get the iPhone and an unlimited data plan that costs him $30 a month, learned those unlimited days were coming to an end via text message on Thursday evening.
"Your data usage has reached 3GB this month," the message from AT&T said. "Using more than 3GB in future billing cycles will result in reduced speeds."
The 24-year-old school computer technician in Salem, Ore., streams music from Pandora and Spotify on his drive to work and uploads photos to Facebook and Instagram. Mr. Hackworth now says he, too, wants to switch back.
"I pay for unlimited usage, and I'm not getting it," Mr. Hackworth said. "Why would I stay with a carrier that doesn't respect that?"
Mr. Hackworth's data usage hit 4.7 gigabytes in December and stayed above 3 gigabytes the last two months. To be able to use that much data at full speeds now, Mr. Hackworth will need to move from his unlimited plan to a 5-gigabyte plan that costs at least an extra $20 a month.