This week, AT&T announced that it will begin throttling data speeds for 3G mobile network subscribers, even for users with unlimited data plans. AT&T is not the first telecom to take such measures — Verizon and Virgin Mobile have already started reducing speeds for their heaviest data users. If you’ve ever used a mobile music app like Pandora, Rhapsody or Spotify, you know how quickly you can go over these arbitrary limits.
AT&T want you to believe that it’s all because of spectrum scarcity, which is also one of their primary justifications for why they need to acquire competitor T-Mobile. We’re not so sure this isn’t just smoke and mirrors.
AT&T says that the throttling will only affect the top five percent of users with unlimited data plans. The cap is meant to prevent service degradation for all users from data-heavy applications like streaming audio and video, remote webcams and online gaming platforms. Current mobile data consumption may mean that only select users are affected, but with the proliferation of tablet devices and smartphones, we’re pretty sure more musicians and fans will be affected.
Here at FMC, we’re excited about what the mobile space means for the development of a legitimate digital music marketplace. But data caps and speed throttling could make things more difficult. Let’s face it, today’s musicians need to be able to get content to fans and collaborators on all broadband platforms. In order to make sure we can keep rocking wirelessly, we need smart policies that encourage efficient use of spectrum and promote competition in the broadband marketplace. We’re not convinced that AT&T shares this conviction.
AT&T points to a “spectrum crunch” as justification for their actions. As we previously mentioned, this is a huge part of their push to take over T-Mobile. Here’s the problem: AT&T already has enough spectrum to follow up on their pledge to deliver 4G service to 97 percent of America. (Keep in mind that Verizon’s entire network will be on 4G by 2014 — between the two, that’s a lot of coverage). Meaning, the infrastructure is already in place to expand next generation mobile services to nearly all of the country without limiting the data usage of existing subscribers. In fact, AT&T has already promised to hit that magic 97 percent number even if the merger is blocked. Why are they changing their tune?
AT&T should not be encouraged to drag its feet on network upgrades it has already committed to completing. Read the rest of our thoughts on the merger here, here and here, as well as those of our musician friends.