Many Unlimited Tech Services Appear to Have Limits

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Unlimited services?
If you sign up for an unlimited Internet service, you expect it to be a service that comes, well, without limits, right?

That's what Jim P. expected when he subscribed to Clearwire's high-speed wireless Internet service. What he got, however, was Internet service that was so slow, it became unusable. The reason, Clearwire told him: He used his "unlimited" account too much. Company representatives said that because of his "excessive bandwidth" use, his Internet speeds were being throttled.

Jim P., who posted about his experience at, is far from alone. Browsing the gripe site reveals dozens of users with similar complaints. You'll also find them on the Clearwire Sucks Twitter feed, as well as at Clearwire is now facing a class-action lawsuit over this very issue.

But the wireless Internet service provider is hardly the only company to place limits on its so-called unlimited services. Online backup providers do it, and so do VoIP providers. Chances are, just about any unlimited tech service comes with plenty of limits. (See T-Mobile's new offering.) And it's making consumers angry.

Other companies, notably many cellular service providers, have had enough, and are pulling the plug on their unlimited plans. But many more companies remain committed to offering unlimited services, and are just as adamant about defending the limitations they impose on them. What's a consumer to do?

Court Case

Clearwire is feeling the heat over its claims of unlimited service. A class-action lawsuit (PDF) filed earlier this month in the U.S. District Court for the Western District of Washington argues that Clearwire's offer of unlimited service is "false, deceptive, and misleading because, in truth and in fact, Clearwire subscribers cannot 'upload, download, and surf' as much as they want." Instead, the lawsuit alleges, Clearwire imposes a hidden usage cap, and once users exceed that cap, Clearwire deliberately slows their Internet speeds.

If you read Clearwire's Terms of Service, you'll see that the company very well may be putting the brakes on some users. The document states: "Clearwire reserves the right to engage in reasonable network management to protect the overall integrity of its network...through techniques such as reducing the aggregate bandwidth available to excessive bandwidth users during periods of congestion."

You'd never know this by reading Clearwire's marketing materials, however. "With our unlimited 4G data plans, you get all the Internet, all the speed, and all the data you want, virtually whenever you want it," the company's site claims. Also on the Clearwire site, though, is the following sentence: "Unlimited plans subject to CLEAR's Acceptable Use Policy (CLEAR is a registered trademark of Clearwire)."

Thomas Enraght-Moony
Thomas Enraght-Moony
Thomas Enraght-Moony, Clearwire's senior vice president of marketing, says the policy is needed to keep the service up and running. "A wireless network is designed and built as a shared resource. That means a small group of users has the ability to detrimentally impact everyone else. During periods of heavy usage, they may lose a little bandwidth so as not to affect other users," Enraght-Moony says. "It's a shared resource, so some users may have to give up a little bandwidth to protect the network."

The problem is, of course, that too many users believe that they have given up more than just a little bandwidth--especially when this limitation wasn't explicitly stated at signup. Tim Lopez is one of the users left frustrated with what he calls Clear's less-than-clear policies. In fact, Lopez was so frustrated that he founded back in 2006, after he had been a Clearwire subscriber for about six months. "For the first few weeks, the service was great," Lopez says of his unlimited plan. "But then the speed dropped a lot, to the point where it was unusable."

Clearwire's speeds were so slow, Lopez resorted to tethering his cell phone to his computer to act as a modem, he says. Frustrated with being trapped in a contract and unable to resolve the issues with Clearwire's support staff, he launched the gripe site--a move that he says was unlike anything he'd done in the past. "I'm not the kind of person who just does this sort of thing. I have a hard time even writing a bad review on Yelp," he says. "But I felt really duped by Clearwire. I felt really bitter about my experience. And I started this site as a way to stick up for myself and for everyone else."

Lopez hasn't been a Clearwire subscriber since 2006, when he was able to terminate his service. But he maintains the site because people remain interested, he says, especially given the recent lawsuit filed against Clearwire.

Although Clearwire's Enraght-Moony wouldn't comment specifically on that lawsuit, the company did issue a statement saying, "Our network management practices comply with applicable law and are consistent with our acceptable-use policy."

Clearwire's dilemma is the same one facing all companies that provide an unlimited service: If every single customer were to use the service at its maximum capacity, the service would suffer--or perhaps be rendered inoperable. That's why nearly all service providers have a similar fair-use policy in place. Users, however, may not see such policies as genuinely fair; instead they may perceive them as limits imposed on a so-called unlimited service.

Sync or Storage?

The dilemma is quite familiar to IDrive, an online storage provider that recently started an unlimited service of its own. When the service launched in 2007, it did not offer an unlimited option, even though competitors such as Carbonite and Mozy had such plans. "The unlimited plans that our competitors were offering at that time were deleting data from your online account if you deleted [the data] from your desktop. That's not a true archive service; it's more of a sync service," says Raghu Kulkarni, CEO of IDrive's parent company Pro Softnet.

Fast-forward to earlier this month, when IDrive unveiled its unlimited service. This unlimited plan comes with some familiar-sounding restrictions: After 150GB of data, IDrive throttles your bandwidth, so uploads are slower. And if you delete the data from your desktop, the company deletes the corresponding data from its servers after 30 days. Don't those conditions make the offering more of a sync service, not a true backup service? "For some users, it doesn't matter. They don't want to think about the limits of storage, so they don't mind certain restrictions in exchange for an unlimited service," Kulkarni says.

Next: The morass of legal jargon, and how VoIP provider Ooma handles unlimited service

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