AT&T dumps iPhone unlimited data plan, adds tethering

New capped data plans go into effect June 7; advocacy group sees 'price gouging'

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Apple has regularly defended AT&T, although it has acknowledged performance problems and said it has worked with its partner to address the issues. Yesterday, Jobs stuck up for AT&T, although his support sounded lukewarm. "[They're doing] pretty good actually," he said during an interview at the D: All Things Digital conference.

But when asked whether there would be advantages to having two carriers handle the iPhone in the U.S., Jobs' reply -- "There might be" -- added to the already-intense speculation that Verizon will get its hands on the iPhone.

"Actually, I'm surprised it took this long," Gold said about the new capped plans. "Bandwidth is limited and as more heavy-use devices, like the iPhone and the iPad, come on line, people are going to use more and more data. One of the major incentives [for customers] is 'What is this going to cost me?' If some decide not to watch YouTube on their iPhones because of the caps, maybe performance will get better in the major cities."

Both Gold and Redman expect other carriers to quickly follow AT&T's lead by capping their data plans. "This breaks the ice," said Gold. "Verizon will be next, maybe Sprint and T-Mobile will do it a little later because they have fewer subscribers, but everyone will do this. It has to happen."

AT&T also said it would introduce iPhone tethering June 7, a move the carrier has been saying would come "soon" for more than two years. As recently as mid-May, AT&T said it had "nothing new" to report on tethering.

When iPhone OS 4 launches -- that, too is expected to debut next week -- iPhone owners can tether their smartphones to a laptop or other device for $20 additional per month, turning the phone into a mobile hotspot that the laptop can use to connect to the Internet.

"A small but vocal minority wanted tethering," said Gold. "This will be a convenience for them. But it really doesn't cost AT&T anything, because the tethering is still capped."

Only customers who sign up for the $25 per month DataPlus are eligible for tethering, said AT&T today. And as Gold noted, any data received or transmitted by the iPhone during tethering counts against the plan's 2GB cap.

"What people forget is that it takes a lot more data to browse the Internet on a laptop than a smart phone because of the larger screen," said Gold.

Current AT&T subscribers with an iPhone can retain their $30 per month unlimited plan, the company said, but can switch to one of the new lower-priced plans if they want. iPhone owners will receive text messages as their data supply dwindles to warn them that they're approaching the cap limit, AT&T added.

More information about the plans can be found on AT&T's site.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer or subscribe to Gregg's RSS feed . His e-mail address is

Copyright © 2010 IDG Communications, Inc.

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