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FOR IMMEDIATE RELEASE
June 2, 2010
12:32 PM

CONTACT: Free Press

Jenn Ettinger,
Media Coordinator,
202-265-1490 x 35

AT&T Tiered Pricing Is Anti-Consumer

New Internet Overcharging Scheme is Further Evidence of Need for Meaningful Competition in Wireless Market

WASHINGTON - June 2 - AT&T today announced it will end its unlimited data plans in favor of a tiered pricing system. The announcement comes at a time when the company's investments as a percentage of its revenues are steadily declining, indicating that AT&T is choosing to manage scarcity and ration its network, rather than build to meet users' needs.

As of June 7, new iPhone customers will now have to select between a 200 megabyte (MB) data plan for $15, and $25 for a 2 gigabyte (GB) plan. These plans also come with overage fees that range from $10 to $75 per GB. Additionally, unlike users of other devices such as most Android phones, tethering to the iPhone will cost an additional $20 per month, plus usage fees.

Free Press Policy Counsel M. Chris Riley issued the following statement:

"While AT&T asserts that its high-end 2 GB cap will only impact the heaviest users, the fact is that today's heavy user is tomorrow's average user. Internet overcharging schemes like the one AT&T proposes will discourage innovative new uses and stifle healthy growth in the mobile broadband economy. It is price gouging for AT&T to charge the low-end users $15 per 200 MB, and to charge $20 for tethering capability even if no additional capacity is used. This pricing system is clearly divorced from the actual underlying cost of service.

"If there was true competition in the U.S. mobile market, providers would invest in their networks to keep pace with consumer demand, removing the need to implement usage-based pricing plans. The fact that AT&T can introduce an Internet overcharging scheme that bears no resemblance to the cost of operating the network, despite constant complaints about the network's quality, further demonstrates that our wireless markets are not competitive. Unfortunately, until the FCC takes seriously the need to promote meaningful competition in the wireless industry, Americans will continue to face a market of high prices and poor service.

"This pricing ploy further illustrates why we need the FCC to put an end to the anti-consumer practice of handset exclusivity. For the wireless market to be competitive, consumers must be free to choose both devices and services, and take their devices to any compatible network."

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