Tighter controls on wireless data usage coming, AT&T exec warns

AT&T: Tighter control of cell data usage ahead

NEW YORK — IPhone users who jam the airwaves by watching video on their devices will be put on tighter leashes, an AT&T Inc. executive said Wednesday.

The carrier has had trouble keeping up with wireless data usage, leading to dropped connections and long waits for users trying to run programs on their devices. AT&T is upgrading its network to cope, but its head of consumer services, Ralph de la Vega, told investors at a UBS conference in New York that it will also give high-bandwidth users incentives to “reduce or modify their usage.”

De la Vega didn’t say exactly how or when the carrier would change its policies, but he said some form of usage-based pricing for data is inevitable.

Right now, the carrier doesn’t limit data usage for smart phones. It also doesn’t make it easy for subscribers to know how much data they’re consuming.

“We need to educate the customer … We’ve got to get them to understand what represents a megabyte of data,” de la Vega said. “We’re improving all our systems to let consumers get real-time information on their data usage.”

Just 3 percent of “smart” phone users are consuming 40 percent of the network capacity, de la Vega said, adding that the most high-bandwidth activity is video and audio streaming. Several applications on the iPhone provide nonstop Internet radio.

This week AT&T introduced an application for the iPhone that lets users report network problems like dropped calls. However, de la Vega defended the network’s performance, saying that major problems are concentrated in New York and San Francisco, which are packed with smart phone users. AT&T is the exclusive U.S. carrier for Apple’s iPhone.

AT&T is locked in a TV ad war with Verizon, which is touting its wider 3G network coverage and the Motorola Droid as an alternative to the iPhone. AT&T and Verizon recently agreed to drop two lawsuits in which they each accused the other of making misleading claims.