The Wall Street Journal reported Thursday the phone carrier is spending billions of dollars to upgrade its service capacity. In the meantime, the firm said it would slow download speeds for 3G and 4G customers who approach limits of 3 gigabytes and 5 gigabytes of data per month, respectively.
The company said for the first instance it would send a text message to customers warning them their download time would be throttled back for the duration of the billing cycle. After that, the download speed would be decreased without the warning.
AT&T is lobbying to Congress and the Federal Communications Commission to open up more of the wireless air wave spectrum to keep up with increasing demand sparked by the increased use of smart phones to download movies, music and other data.
AT&T also said it was encouraging consumers to move away from 2G phones.
"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," the company warned customers in a letter.
AT&T clarified the issue by saying it was voluntary.
"We're simply urging them to upgrade to a new device if they want to," said company spokesman Mark Siegel.