The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.NEW YORK ( Trefis) -- After months of playing coy with critics of its throttling policy, AT&T ( T) has finally came clean on the stipulations of its unlimited plans. The company said last Thursday that its support site for unlimited data plans now clearly states that consumers who use more than 3GB of data on an unlimited 3G data plan and 5GB on an unlimited 4G LTE data plan will see slower speeds than usual in what it calls part of its "network management" policies. However, users on tiered-data plans will not be affected by this policy. AT&T, along with Verizon ( VZ) and Sprint ( S), has been struggling with a spectrum crunch as demand for data services continue to soar with an increasing adoption of 3G/4G smartphones and tablets. See our complete analysis for AT&T
It is now trying to gradually phase out the older 2G networks and re-farm the spectrum for use in the new LTE network. The U.S. wireless market is intensely competitive with the total number of wireless connections (327.6 million) exceeding the total population (315.5 million) in the United States, as of mid-2011. As an ever increasing number of smartphone users demand higher speeds and congestion-free networks, wireless carriers will be hard pressed for additional spectrum in order to meet these demands. The recent congressional approval for wireless spectrum auctions should help address the industry needs. Meanwhile, Sprint remains the only carrier to offer unlimited plans. It is possible that the highest data users may defect from AT&T to Sprint, but considering that most of them are on two-year contracts and face a heavy penalty fee should they choose to terminate their plans, the defections should be low. Also, many signed on to family plans, making the move to another service difficult. Click here to find out how a company's products impact its stock price at Trefis. Like our charts? Embed them in your own posts using the Trefis Wordpress Plugin.