Mythbuster: Why unlimited data throttling may be pointless

Wireless carriersWell this is interesting: New research by Validas, a company that analyzes wireless phone bills, found that there is barely any difference in the data usage habits of the top 5 percent of tiered and unlimited wireless users. This comes after three of the four major US wireless carriers have begun to throttle speeds for those so-called “data hogs” on unlimited plans. What the findings potentially uncover is that the new policies are ostensibly less about the initial justifications for the limits — esoteric concerns over network bandwidth and wireless spectrum shortage, of which AT&T specifically referred to as an impetus for their policy shift — and more about moving legacy unlimited data plan holders to more modern, tiered contracts.

Validas, which according to their website, “cuts through the confusion that wireless bills and rate plans create to get consumers, businesses, and government agencies more from every dollar they spend on wireless services,” analyzed data extracted from a sample of over 55,000 2011 mobile phone bills. What they found was perhaps contrary to common sense: On Verizon Wireless, for example, the top 5 percent of unlimited data plan holders used an average 3.57 GB of network bandwidth, and a median of 2.60 GB per 30 day period. Tiered plan holders used on average 3.59 GB with a median of 2.58 GB, representing no appreciable difference. AT&T’s results skewed a bit more towards conventional wisdom, with the average top unlimited data subscriber using 3.97 GB vs. the tiered user’s 3.19 GB, a spread of about 25 percent. The difference, however, could involve AT&T’s faster 4G data network, in relation to Verizon’s slightly slower, but more widespread LTE service.

mythbuster why unlimited data throttling may be pointless 2011 consumptionOf the four major wireless carriers, unlimited data throttling policies differ in a few distinct and important ways. T-Mobile, according to a blog post on Validas’ website, “is very transparently throttling over 5GB of data used, which corresponds to a very small portion of users. Verizon Wireless and AT&T, on the other hand, are utilizing active throttling techniques aimed at the top 5 percent (in terms of the amount of data used) of unlimited customers.” The post goes on to indicate that Verizon will reduce speeds for its throttled users for as little time as possible and based on particular regional network loads, a metric that is constantly changing. AT&T is a bit more punitive in its data control, heavily throttling top unlimited users for the rest of their billing cycle. Conspicuously absent from the major carriers throttling unlimited data is Sprint. They offer a “truly unlimited” data plan that, barring some recent controversy, seems to be authentically unlimited.

What is clear from these statistics is that data throttling of unlimited customers is a preemptive tactic being employed by the largest wireless carriers at the very least to protect against future wireless spectrum needs. To that end, it is disingenuous for AT&T and Verizon to bill the changes disguised as an immediate threat to consumer data traffic. We need look no further than T-Mobile, the nation’s fourth largest carrier and one in dire need of wireless spectrum — its own policy could hardly even be considered throttling compared to Verizon, which currently has more spectrum than it surely knows what to do with. What’s more likely is that as carriers move to faster, and thus higher bandwidth 4G networks and beyond, unlimited data plan holders will begin to realize a significant advantage over tiered users, presenting a potential liability for carriers. Although 40 percent of Verizon Wireless smartphone users consumed less than 50 MB a month in 2011, those numbers are expected to change drastically as 4G networks become more prevalent; driving unlimited customers to tiered plans right now presents much less challenge to wireless carriers than when mobile users start to get used to truly unlimited bandwidth. If you keep track of how much data you normally use, let us know in the comments. 

Image Credit: Validas

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