Throttled iPhones help AT&T show how hard it is to drive smartphone customers away

Plan to shift from unlimited to "unlimited" data plan relies on manipulation, scapegoating of customers

Most people thought it wouldn't make that big a difference when Verizon and AT&T both admitted they would change their unlimited data plans to "unlimited" plans instead.

The shift should have been transparent from the point of view of customers, except when the bills came in.

Verizon and AT&T both swore the "unlimited" plans would not negatively affect their current customers with the exception of a few dangerously inconsiderate data hogs whose usage was so heavy it degraded the service, morale and morals of all the users around them, the two implied.

According to an Associated Press story this morning, though, the impact was much wider than either carrier predicted and the result highlighted two under-appreciated aspects of smartphonery:

First: So much of the experience of using a cell phone depends on the quality, speed and services available on the network to which it's connected that changing any significant aspect of that service has a disproportionate effect on the performance of the phone itself.

Second: Cell phone carriers only appear to be speaking the same language as their customers. Actually the carriers emulate lawyers, zealots and sociopaths by using the same words as their audience so as to sound reasonable, but using a secret second definition for each word so they can bend the truth as much as they want without being caught in an obvious lie.

Manipulating users to get them to switch from unlimited to "unlimited

When Verizon ended the unlimited data plan it launched to encourage customers to buy the iPhones it had just started selling, it set up a restrictive but relatively transparent data plan. "Unlimited" starts at 2GB per month for $30; use more than that and you pay more.

If you're a heavy data user, that plan would be more expensive than the unlimited plan, which is clear from the price list, Verizon's description of the change and even its excuses for having made the change.

AT&T tried to look more generous, but went with a plan that leaves customers in the dark about what level of usage constitutes data hoggery and whether, when and how they'll be published for "over" using the service they paid for.

The result was less like a clear contract than it was like "all you can eat" special at the kind of greasy spoon where your first two plates are clean and the fish is nicely wood-grilled. The third plate isn't so clean and the fish comes in bits that look like they came off other people's plates with a zip in the microwave on the way out of the kitchen. The fourth plate is paper (not clean) with a single fish stick (still frozen).

Rather than setting a hard data limit on the plan, it announced it would instead punish the gross data hogs within its customer base by throttling the bandwidth they can use each month, saving that bandwidth for nicer, more deserving customers that paid for service but didn't actually use it.

AT&T emphasized that bandwidth throttles and other punitive measures would affect only the very top tier of their data hogs – horrible, greedy people who grab so much bandwidth for themselves they leave hardly any for those around them, AT&T implied. No carrier would be so crass as to throttle customers using a reasonable amount of bandwidth for which they pay a reasonable price, whether the carrier was legally allowed to do so or not.

Didn't work out that way. Or, if it was that way at first, it's not any more.

For example: Mike Trang, a property manager in Orange County, Calif. Uses an AT&T iPhone 4 in ways so common nothing he did is remotely worthy of being covered as news.

"Mike Trang likes to use his iPhone 4 as a GPS device, helping him get around in his job. Now and then, his younger cousins get ahold of it, and play some YouTube videos and games," Mike Trang likes to use his iPhone 4 as a GPS device, helping him get around in his job. Now and then, his younger cousins get ahold of it, and play some YouTube videos and games." according to the AP story (via NPR.org).

Nothing about the way Trang uses his iPhone 4 is unusual or excessive, especially compared to corporate road warriors who spend a lot of time logged on to remote servers, up- and downloading large files and sending game moves to each other across the mobile net.

Grading on a curve: Good in college, bad in smartphone contracts

AT&T grades data hoggery on a curve, however.

Rather than setting specific levels of data use it considers to be excessive, AT&T grades on a curve.

The 5 percent of customers within a particular area with the highest data-usage numbers would get throttled.

That's fair in one sense; if you live in a place that has one cell tower to serve half a state, it makes sense to identify the heaviest users in that area as data hogs, even if the amount of data they use is relatively low.

If you live in a well developed area with a lot of cell phone towers and competition among carriers for new iPhone customers – like, say, Orange County, Calif. – it doesn't make as much sense to be judged compared to your neighbors.

What if everyone in the neighborhood is boring or tech-aversive enough that they're all using smart-ish phones, or never do more than a little texting or MMSing a photo or two of the grandchildren?

If they all use 1.5GB/month and you're still well below the 3GB/month that's the bottom level of data usage under AT&T's tiered plan, you're still going to be the neighborhood data hog and you're still going to get throttled.

And throttling turns a useful, even pleasant tool for work and play into a brick that's frustrating to use and almost useless to carry.

On Trang's iPhone, which he relies on for directions, news and information every day, the throttle kicks in two weeks into the month; maps won't appear, web pages won't load and video is out of the question.

"It basically makes my phone useless," he told the AP.

Carriers caught a lot of flak for ending unlimited data plans, but a lot of customers also defended tiered pricing because of the vast difference in use patterns between smartphones and smartish phones.

The standard response…is that carriers are just being greedy, won't improve their networks, blah blah blah.

OK, so put yourself in their shoes. Come up with a 5-year network hardware expansion plan that can compensate for unrestricted exponential growth. Let that sink in for a minute. – Slashdot user ultramk, June 21, 2011.

And they're right. No vendor can afford unlimited increases in usage without buildouts that increase costs and have to increase prices.

(Forget for a moment that Verizon had to know what the effect would be on its network and must have planned from the beginning to end the unlimited data plan even while it was working hard to sell iPhones and Verizon contracts to new customers based partly on a promise of unlimited use. That's a different level of hypocrisy to be dissected in a different blog, unless Verizon's consistently market-leading example of how to be a corporation and a weasel simultaneously gets boring by then.)

Telling customers you'll punish only really excessive data users and then putting ordinary users in your crosshairs without telling them the criteria have changed is flatly dishonest.

It ruins the performance of the device AT&T sold its customers and it violates the promises AT&T made that customers would be able to continue using the network the way they always had without penalty

Secret data-hog-fingerpointing also changes the fundamental portions of the agreement customers signed with it so as to blame customers for AT&T's mistakes and use sneaky, manipulative ways to get them to pay.

That's how you make good phones bad, ruin what's left of your reputation for even caring what customer think, let alone providing them good service, and corrode what little trust your customers still have in you.

In fact, the only good thing about the frozen-fishstick customer-manipulation-strategy is that it proves once and for all that, no matter how bad the service you provide, how rude or dismissive you are of your customers, how abusive of their expectations and values, if they're fond enough of the phone you sold them, there are some customers you'll never be able to drive away.

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