‘Unlimited’ Data Plans: What You Really Get (and Do Not Get)

Joe Raedle/Getty Images

Joe Raedle/Getty Images

T-Mobile is making headlines with a very public warning that it will take unlimited data plans away from customers who abuse them. But the situation raises the question: what do you really get with an unlimited data plan? It’s not a new question. In fact, The Cheat Sheet reported last year that subscribing to an unlimited data plan is no guarantee of truly unlimited data.

At the time, Verizon had just announced that it would begin slowing down data speeds for the heaviest users on unlimited plans during peak usage times. Verizon encouraged customers concerned about throttling to switch to a usage-based plan, which wouldn’t be affected. When FCC chairman Tom Wheeler complained that the carrier was trying to push customers grandfathered in to its unlimited plans to switch, Verizon echoed the argument that AT&T, Sprint, and T-Mobile have made: that throttling policies are meant to improve the user experience for all subscribers, rather to encourage heavy data users to move to higher-priced plans.

In the time since, a ruling by the Federal Trade Commission concluded that unlimited data with throttling doesn’t count as unlimited. As Ina Fried reported for Re/Code, the FTC ruled that TracFone had to pay a $40 million fine for throttling customers who had paid for unlimited data, and in some cases cutting off their service. While the ruling applied only to TracFone, a number of other carriers still offer unlimited plans that they’ve been throttling. Jessica Rich, director of the FTC’s Bureau of Consumer Protection, said at the time, “The issue here is simple: When you promise consumers ‘unlimited,’ that means unlimited.”

On a later conference call with journalists, Rich clarified, “This case is about false advertising It’s not about throttling. We’re not challenging throttling in and of itself.” She added that as long as the carrier makes its policies clear to customers, carriers can engage in the practice. “If it’s clearly disclosed, if a company advertises unlimited, but very clearly discloses their practices with regard to throttling we would not challenge that action.”

A case of false advertising

T-Mobile, one of the two carriers that still offers unlimited plans to new customers, seems to have taken Rich’s warning about false advertising to heart by laying everything out on the table. Outspoken T-Mobile chief executive John Legere wrote a tweet and a blog post explaining that the carrier plans to “eliminate” customers who abuse the network’s unlimited plan. Legere’s beef isn’t with users who use large amounts of data on their phones, but with those who purposefully use workarounds to use more high-speed tethering than the fixed amount that even an unlimited data plan allots.

Tethering enables users to share a smartphone’s Internet connection with another device, and each plan includes a set amount of high-speed tethering — in the case of unlimited plans, 7GB — after which the tethering slows down. Legere explains that the abusers are “downloading apps that hide their tether usage, rooting their phones, writing code to mask their activity,” and otherwise “‘hacking’ the system” to use as much as 2 terabytes, or 2,000GB, of data in a month. Legere writes that the abusers “will probably try to distract everyone by waving their arms about throttling data.” But, he continues, “this is not the same issue.”

As Jon Brodkin points out at Ars Technica, T-Mobile already had policies in place to protect regular customers from being impacted by heavy data users. After the FCC’s net neutrality rules went into effect, according to Phil Goldstein at FierceWireless, some carriers changed their policies on throttling. But T-Mobile simply clarified its policies, stating that throttling occurs when unlimited data customers use more than 21GB in a billing cycle, at times and in locations when “there are competing customer demands for network resources.” At the time, the company maintained that its throttling policy adheres to net neutrality rules, and said that the update “isn’t a change in our policy,” but simply an update to its disclosures — seemingly to avoid the kind of false advertising of which the FTC takes a dim view.

“Unlimited” data that isn’t really unlimited

Regardless of the ethics of throttling, it’s hard to deny that “unlimited data” doesn’t really mean unlimited data. Brian X. Chen reports for The New York Times that many carriers have “added caveats and restrictions to their unlimited data plans, and most carriers have struggled to deliver on the concept.” AT&T, for instance, discontinued unlimited plans in 2010 but let customers with pre-existing plans continue to use them until 2012, when it announced that users’ speeds would be slowed after 5GB of data.

But T-Mobile’s policy is different, in that it says its unlimited data is meant for smartphones, and only a certain amount can be used for tethering. And in Chen’s estimation, T-Mobile’s practice of de-prioritizing the traffic of customers who have used more than 21GB of data — a practice aptly called network de-prioritiziation — is still “a limitation on an unlimited data plan.”

Short of those using inordinately large amounts of data by tethering or by other means, customers should be able to reasonably expect that they’re really getting what carriers are advertising. The levels at which carriers throttle your data aren’t that far out of reach for a heavy user, and regardless of whether you use enough data for your speed to be throttled, it’s still unsettling to learn that unlimited data still isn’t really unlimited.

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