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Computerized Investing > Second Quarter 2012

When “Unlimited” Really Isn’t

PRINT | | | | COMMENTS (3) | A A   Reset

by Wayne A. Thorp, CFA

Growing up in rural America, where many still consider a verbal agreement and a handshake to be as binding as a written contract, I expect some truth in advertising. In 2010, when Apple released the original iPad, I took the plunge and signed up for an unlimited data contract with AT&T. Having been a long-time AT&T Wireless customer, I had grown numb to their spotty service and less-than-helpful customer service. But I also subscribe to the idiom, “better the devil you know than the devil you don’t.” As it turns out, AT&T stopped offering unlimited plans only a week or two after I got mine, so I was feeling rather fortunate.

A few months back, there were rumblings in the media that AT&T was starting to “throttle” the speeds of those who were among the top 5% of data users. Throttling effectively slows down the data transfer rate of a device; it is a practice used by cable companies and cell phone providers in an effort to regulate network traffic and ease congestion. The practice isn’t new, as Internet service providers (ISPs) sometimes throttle speeds to reduce bandwidth usage.

The reaction to AT&T’s throttling was more pointed, however, as people are paying for “unlimited” data, or at least so they thought. AT&T, however, has changed the definition of unlimited to mean any amount of data under 3G a month. If you are an unlimited-use customer and go over that limit, your services will slow down.

As much as I use my iPad, I have never gone over 2G of data usage a month, let alone 3G, so the chances of getting throttled at this time are pretty small. However, at what point will AT&T decide to lower that threshold to 2G? Perhaps I am naive, but I expect to get what I pay for.

Recent surveys run in the weekly CI Email showed that 56% of our readers use a smartphone, and 29% of readers who have a voice or data plan use AT&T. Currently, Sprint Nextel is the only major provider that still sells an unlimited data plan. If you are an AT&T user, would you switch to Sprint if your usage were throttled? This may be a boon for Sprint, so I don’t expect them to do away with their unlimited data plan anytime soon. I will be keeping an eye on the connection speed of my iPad, especially since my two-year commitment is about to end.

Reader Reaction

In last issue’s Editor’s Outlook, I explained my viewpoint on the long-running Windows versus Mac saga. It generated several responses from readers, including some avid Mac fans. I want to thank those who took the time to comment, and I welcome comments from readers on the articles we publish or your thoughts on article topics. We are here to serve you, the reader, so help us help you!


Discussion

Robert from CO posted over 2 years ago:

Welcome to the "new" USA; a third world country with no equal...

If the American public would start voting with their wallets there would be change.

If you are unhappy with AT&T, or any of a long and growing list of American GREED


Robert from CO posted over 2 years ago:

continued from previous:

companies, stop doing buisness with them, and stop whinning.

As long as the U.S. population more closely resemble sheep than intellect, the race to the bottom will continue.

Regards,

Bob Bowker


Wayne Gulden from OH posted 3 months ago:

AT&T doesn't throttle just unlimited plans. I had 6mb DSL and noticed it dropped to a very consistent 2mb just a month before AT&T started marketing u-verse in our town.

As Bob says, I voted with my wallet.


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