AT&T gives heavy data users a not-so-subtle hint to ditch the unlimited plan

What could be worse than a surprise overage fee? For some people it's having their wireless carrier put the brakes on their data service.

In this edition of Ask Maggie, one reader wants to know whether it's worth keeping his AT&T unlimited data plan after AT&T has warned him that his service will be slowed down because he's in the top 5 percent of data users. Ask Maggie also offers advice on whether to buy the lower priced iPhone 4 or the newer iPhone 4S.

Is AT&T giving me a hint with its data throttling?

Dear Brian,
I think you've nailed this issue right on the head. AT&T's throttling program seems to target customers, who are just over the 2GB threshold. And its new higher priced data plans that offer 3GB of data for $30 looks like an attempt to get customers to switch from their unlimited data plans to the 3GB plan for the same price.

Whether you can live with the slower data rates is up to you. But clearly AT&T is trying to entice people who use a lot of data to get off the unlimited and onto a tiered plan where the service is never throttled.

The throttling policy that AT&T imposed last year has never been officially defined. I cannot find any written policy that spells out how AT&T determines who is in the top 5 percent. I have asked the company to provide such information. And each time, the company's spokesman, Mark Siegel, has directed me to the letters it sends the offending subscribers:

"As we note in the letter (to subscribers in the top 5 percent), the amount of data usage of our top 5 percent of heaviest users varies from month to month, based on the usage of others and the ever increasing demand for mobile broadband services."

But since the policy has been implemented, it seems like most people who complain about getting their service slowed are using more than 2GB of data per month. So it looks like 2GB might be the cut-off that puts users in the top 5 percent. As a result, subscribers who regularly use more than 2GB of data per month are more at risk for having their service slowed down.

So what's a 2GB+ data user to do? It seems that AT&T's new pricing plans are designed to encourage these heavier data-consuming subscribers to switch over to the 3GB plan. For users who only exceed the 2GB cut-off by a little bit, the 3GB will be plenty of bandwidth for the month. It's the same price as the unlimited plan, and they don't ever risk having the service slowed.

For customers who use more than 3GB of data per month, AT&T can charge them more for their usage. They may also be enticed to switch to the 3GB plan, because they are likely being throttled more often. And for some subscribers, they'd rather pay more for consistent service than not pay more but have their service slowed when they exceed some limit.

As for your second question, I'm not really sure why AT&T is taking this round-about way to get customers to switch to their tiered plans. The company could always end the unlimited data plan for customers when their contracts expire.

My guess is that AT&T is trying to avoid bad publicity. If it ends the unlimited plan for customers who have been "grandfathered in" to the plan, then it will be going back on a promise it made when it first introduced the tiered data plan. And in this competitive market, I'm sure AT&T doesn't want to risk ticking off a large number of its existing customers.

Remember there are plenty of subscribers who still have the unlimited data plan, pay their $30 a month, and don't even come close to exceeding the 2GB cap. For AT&T, these customers are like people who sign up for a gym membership right after the new year and stop showing up in February.

AT&T doesn't want to make the vast majority of its customers angry by telling them that they will have their unlimited plans revoked at the end of their current contract. Even though most of the users on that plan don't need it, it's security blanket for many of them. And if it's no longer available, these customers may decide to switch to a competitor. This is especially true given that the Apple iPhone is now offered on three of the four major wireless carriers.

Still, AT&T has to do something to curb usage on its network. And it is determined to make its heaviest users pay for that usage. So by slowing down their service, AT&T is likely hoping they will give up on the unlimited plan and go to a plan in which AT&T can force them to pay for what they use.

I've had a number of readers ask me if subscribers can cancel their service or sue AT&T for changing the terms of their service contract. I reached to Michael Aschenbrener, founder and a principal at Aschenbrener Law, a firm that specializes in consumer rights, to see if customers who are being throttled might be able to get out of their service contracts. And he said it's unlikely.

Aschenbrener said that AT&T's agreements allow it to change the terms and prices anytime it wishes. AT&T only allows users to end their contracts without an early termination fee when it increases charges or materially reduces the coverage area included in a plan. But the company is doing neither of these things when it throttles service. Of course, Aschenbrener questions whether AT&T's and other wireless operators service agreements are in fact a real contract, given that one party is allowed to change terms anytime it wants. But he said that's another issue.

Aschenbrener also points out that AT&T isn't really changing the terms of service anyway.

"AT&T's throttling plan honors the letter, if not the spirit, of the contract," he explained in an e-mail to me. "In other words, even with the throttling, users still get unlimited data. Also, for this reason, the throttling plan may not even constitute any kind of change to its contract, meaning users have no possibility of recourse."

But even if AT&T's contract said that it couldn't reduce the speed of the service--which it clearly does not--customers still can't sue AT&T because users are forced into arbitration with the carrier.

"The bottom line is that AT&T's policy is likely permissible, no matter how reprehensible some consumers may find it," he said. "And even if it is not permissible, there is little consumers can do about it."

Sadly, the only action that consumers can take if they are really unhappy with either being throttled or forced into a tiered offering is to quit AT&T's service and go to another provider.

I hope this helps, and good luck.

Should I get the iPhone 4 or splurge on the iPhone 4S?

Dear Maggie,
I really want an iPhone. I tried out the iPhone 4 that a friend has, and I really like it. I am a Verizon Wireless subscriber. I noticed that the iPhone 4 is selling for $99. My question to you is since the price for the iPhone 4 is so good would you recommend it over the iPhone 4S? I personally don't think Siri is worth the extra $100.

Dear Chris,
I don't think Siri alone is really worth the extra $100 either. But it's a nice bonus.

That said, I'd still recommend you buy the iPhone 4S over the iPhone 4 for a few reasons. I know the iPhone 4 and the iPhone 4S look exactly alike. And many of the features are the same, but there are two important features that are different.

First, the camera on the iPhone 4S is an improvement over the iPhone 4. In addition to having 3 more megapixels than the iPhone 4, the iPhone 4S camera also has a wider aperture, which makes the camera on the iPhone 4S much better. And many people who have compared the two cameras on the phones say that the iPhone 4S does better in low-light situations.

Some people may not think the megapixel difference is a not really big deal. (The iPhone 4 has a 5-megapixel camera compared to the iPhone 4S's 8 megapixel camera.) And it might not be to some people. But it can make a difference when you zoom into the photos. The iPhone 4S pictures are often less fuzzy than when taken with an iPhone 4.

The second big reason to get the iPhone 4S over the iPhone 4 has to do with the real guts of the phone: the processor. The iPhone 4S uses Apple's latest and fastest A5 dual core chipset, while the iPhone 4 uses the older A4 single core chipset. This difference in processing speed helps improve overall performance so Web pages load faster and apps work quicker.

While GSM customers, such as those on AT&T's network will also get access to faster HSPA+ technology on the iPhone 4S, Verizon and Sprint customers don't get this advantage. The CDMA version of the phone still uses the same EV-DO 3G radio technology found in the iPhone 4. But because the iPhone 4S has the A5 processor and the iPhone 4 does not, even Verizon customers may notice faster downloads and snappier performance from the iPhone 4S.

The other reason I would recommend paying the additional $100 for the iPhone 4S is that this is the latest generation of iPhone that is on the market. Apple will likely introduce yet another version in either June or in October of this year. If you were to buy the iPhone 4 now, when the new iPhone comes on the market, you'll be two generations behind.

This may not sound like a big deal, but remember that if you get this device under contract, you'll have it for two years. So as each new generation of product is introduced, you'll be a generation behind. There is a chance that as time goes on, Apple may introduce new features or software that support new apps that won't be supported on the iPhone 4.

So if there is anyway you can swing it, I always recommend buying the latest generation iPhone, even though the price of the older generation device is attractive.

I hope this advice was helpful. And good luck!

Ask Maggie is an advice column that answers readers' wireless and broadband questions. The column now appears twice a week on CNET offering readers a double dosage of Ask Maggie's advice. If you have a question, I'd love to hear from you. Please send me an e-mail at maggie dot reardon at cbs dot com. And please put "Ask Maggie" in the subject header. You can also follow me on Facebook on my Ask Maggie page.