AT&T's long-standing policy of throttling LTE service for unlimited data customers has finally been changed so that customers are throttled only when they connect to congested cell towers.

Until now, AT&T customers who used 5GB of data in a single monthly billing period were throttled for the rest of the month at all times, receiving barely usable service, despite paying for "unlimited" data. AT&T is facing a lawsuit from the Federal Trade Commission over the practice and has denied wrongdoing, but it promised that it would change the policy to make it more lenient before the end of 2015.

AT&T did not make any official announcement of the change, but it is now apparent in the policy detailed on its website:

As a result of AT&T's network management process, customers on a 3G or 4G smartphone or on a 4G LTE smartphone with an unlimited data plan who have exceeded 3 gigabytes (3G/4G) or 5 gigabytes (4G LTE) of data in a billing period may experience reduced speeds when using data services at times and in areas that are experiencing network congestion. All such customers can still use unlimited data without incurring overage charges, and their speeds will be restored with the start of the next billing cycle.

Before the change, which apparently happened overnight, the text showed different policies for LTE and non-LTE customers. It said, "customers on a 3G or 4G [HSPA+] smartphone with an unlimited data plan who have exceeded 3 gigabytes of data in a billing period may experience reduced speeds when using data services at times and in areas that are experiencing network congestion. Customers on a 4G LTE smartphone will experience reduced speeds once their usage in a billing cycle exceeds 5 gigabytes of data."

LTE users with unlimited data plans have seen speeds drop below half a megabit per second when being throttled by AT&T. By imposing this draconian throttling policy, AT&T encouraged customers to switch to more expensive plans introduced in the years after AT&T stopped selling unlimited data to new subscribers. Despite AT&T claiming that it needs to throttle unlimited users in order to "manage" its network, it allows customers on limited plans to use far more than 5GB a month without being throttled as long as they pay for a bigger allotment.

Federal Communications Commission Chairman Tom Wheeler has tried to shame the carriers into stopping the practice of throttling customers based on their billing plans, and he succeeded in preventing Verizon Wireless from throttling LTE users. Sprint, T-Mobile, and Verizon all use throttling to some extent, but only in times and places of congestion (and Verizon only on 3G).

Despite the change, AT&T still faces potential punishment if it loses the case filed by the FTC. Last month, a federal judge rejected AT&T's claim that it can't be sued by the FTC. The FTC is seeking refunds for millions of customers who were promised unlimited data plans.

AT&T also could have faced action from the FCC, whose new net neutrality rules against throttling take effect next month. The rules say throttling can only be done for reasonable network management purposes, and Wheeler has said "reasonable network management" cannot be used as a loophole to enhance revenue streams. The FCC could still examine AT&T's throttling, but the company's new policy is more likely than its old one to meet the reasonable network management test.