Two of the biggest cell phone providers (AT&T and Verizon) no longer offer unlimited data plans but you might still have one with your smartphone if you were grandfathered in before the changes. But heavy data users may see their speeds effected. Hit the jump for details.

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AT&T Inc. (T) is effectively ending unlimited data plans, saying it will no longer let customers use more than a set amount of data per month without penalty.

Under a new policy, AT&T will slow download speeds for unlimited smartphone customers who in a month exceed 3 gigabytes — roughly 5 high-definition movies — or 5 gigabytes if they are 4G LTE users. AT&T had previously been slowing speeds, or throttling, customers who were in the top 5% of data users in their respective markets.

AT&T has been trying to manage capacity on its network in the face of heavy data consumption by users of smartphones and tablets, like Apple Inc.’s (AAPL) iPhone and iPad, and because of a limited supply of wireless airwaves, or spectrum. The carrier is spending billions to build out a new fourth-generation mobile-broadband network that can handle more data traffic.

A spokesman, Mark Siegel, said the new guidelines were necessary to clear up confusion among unlimited customers over when their download speeds would be slowed, though he declined to say by how much the speeds would be decreased. When throttled, devices can take significantly longer to download video and other data.

In 2010, AT&T was the first carrier to introduce so-called tiered pricing plans which capped customers’ data use. It allowed existing customers to keep their unlimited data plans indefinitely. About 17 million AT&T customers are still using unlimited data plans, said Siegel.

The Dallas-based carrier in January boosted the prices of its tiered plans by as much as 33% while increasing the amount of data allowed per month. New customers now pay $30 for a 3 gigabyte plan, compared with $25 for 2 gigabytes previously, with extra gigabytes available for $10 each monthly. Unlimited users pay $30 per month.

Rival Verizon Wireless also slows data speeds, though a spokeswoman said it’s only for the top 5% of customers in areas where there is cell site congestion. She declined to say if the carrier had any plans to change its policy. Sprint Nextel Corp. (S) said it doesn’t impose any limitations on throughput for its unlimited customers.

Prepaid carrier MetroPCS Communications Inc. (PCS), known for its simple, all-inclusive data and voice plans, said it is considering a move to tiered pricing to boost revenue.

Matt Spaccarelli, 39, a dump truck driver from Simi Valley, Calif., sued AT&T in small claims court last month for slowing his speeds on his iPhone 4 and was awarded $850.

“This new plan to throttle is not going to solve their congestion problem,” said Spaccarelli, an AT&T customer since 2008. “Either it’s unlimited, or it isn’t, and a throttled plan is not unlimited no matter what you call it.”

Spaccarelli said AT&T slowed download speeds to 0.26 megabytes per second from 5 megabytes per second. “It was a gigantic difference,” said Spaccarelli, who likes to watch episodes of The Office on his device. “Downloading a video would take two or three times longer.”

AT&T and other carriers have been pushing Congress and the Federal Communications Commission to release more licenses for wireless airwaves, or spectrum, to help stave off a capacity crunch as more customers download video, music and photos to their smartphones.

Chief Executive Randall Stephenson — who oversaw the company’s failed $39 billion bid for T-Mobile USA last year — said the carrier’s top priority this year is finding new spectrum to add capacity. “It’s got my full focus,” said Stephenson. “We as an industry are looking at a three- or four-year time horizon where we’re going to have some serious issues in markets if we don’t get behind this.”

The data caps aren’t the only moves AT&T is taking to manage its network. In recent weeks, the carrier has begun sending out notices to some customers still using cellphones on its older 2G cellular network to swap out their devices for newer ones that can run on 3G networks.

“Your current, older-model 2G phone might not be able to make or receive calls and you may experience degradation of your wireless service in certain areas,” AT&T cautioned in the letter. Siegel said the carrier hoped to use some of the 2G spectrum for new technologies, though it would still offer 2G services to those who want them.

“We’re simply urging them to upgrade to a new device if they want to,” Siegel said.

Siegel said the carrier sent the notices to customers in the New York metropolitan area and may send them to other customers. He noted the program was voluntary, affected a small number of subscribers and that most 2G phones would continue to work.

AT&T is offering the users one of four free phones, such as the Samsung Electronics Co. (005930.SE, SSNHY) Evergreen or the LG Electronics Inc. (066570.SE) GU295.

AT&T shares added 4 cents to close at $30.63 Thursday.

WSJ