FCC slaps AT&T with $100 million fine for throttling unlimited data plans

Posted:
in iPhone edited June 2015
The Federal Communications Commission on Wednesday announced its intent to levy a $100 million fine against AT&T after finding that the wireless carrier mislead customers about its throttling of data plans that were advertised as being unlimited.




"Consumers deserve to get what they pay for," FCC chairman Tom Wheeler said. "Broadband providers must be upfront and transparent about the services they provide. The FCC will not stand idly by while consumers are deceived by misleading marketing materials and insufficient disclosure."

The FCC found that AT&T did not adequately inform customers of the potential for throttling, violating the 2010 Open Internet Transparency Rule. The rule "mandates that broadband access providers disclose accurate information sufficient to enable consumers to make informed choices regarding their use of broadband Internet services and to ensure they are not misled or surprised by the quality or cost of the services they actually receive."

For its part, AT&T vehemently denied any wrongdoing.

"We will vigorously dispute the FCC's assertions," the company said in a statement. "The FCC has specifically identified this practice as a legitimate and reasonable way to manage network resources for the benefit of all customers, and has known for years that all of the major carriers use it. We have been fully transparent with our customers, providing notice in multiple ways and going well beyond the FCC's disclosure requirements."

AT&T has faced a double-barreled assault from the government over this issue, with both the FCC and Federal Trade Commission ramping up investigations. The FTC filed suit against AT&T last October, alleging that the carrier's practice of selling plans with ostensibly unlimited mobile data and then throttling download speeds amounted to unfair and deceptive practices. AT&T's throttling was categorized as "severe," with as many as 3.5 million customers facing speed reductions of up to 90 percent of the advertised speeds.

The disposition of the FTC's lawsuit is unclear following the FCC's action.
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Comments

  • Reply 1 of 48

    I abandoned my unlimited plan because of throttling. But also to get LTE, affordable hotspot capability, and superior coverage from Verizon.

     

    Since then AT&T has implemented LTE and now they are getting spanked for their crime.

     

    They lost a lot of customers. I wonder if it was worth it for them?

  • Reply 2 of 48
    I wonder if there is recourse for those that specifically left the unlimited plan because of throttling concerns.
  • Reply 3 of 48
    ceek74ceek74 Posts: 324member

    ...let the fine "throttling" begin.

  • Reply 4 of 48
    johnnashjohnnash Posts: 128member

    I honestly don't know how I feel about this.  I'm glad they are getting financially spanked, but at the same time that means my monthly bill is probably going to be impacted to cover the cost.

  • Reply 5 of 48
    mstonemstone Posts: 11,510member
    Quote:

    Originally Posted by Cyberzombie View Post



    I wonder if there is recourse for those that specifically left the unlimited plan because of throttling concerns.



    I gave up my unlimited plan for precisely that reason. Not that I was ever throttled but because the AT&T rep told me about that possibility, so I guess I have nothing to complain about as the throttling issue was disclosed to me and I made an informed decision.

  • Reply 6 of 48
    boltsfan17boltsfan17 Posts: 2,160member

    I gave up AT&T for throttling. I know I could have sued and more than likely won, but I didn't want to deal the hassle of taking AT&T to court. I switched to Verizon and have never looked back. 

  • Reply 7 of 48
    sdw2001sdw2001 Posts: 17,035member

    Bwahahahahaha.   LOVE it.  I get warnings all the time now.  I don't think I ever get throttled, but their network sucks and I'm probably bailing next time I get a new phone.  

  • Reply 8 of 48
    nobodyynobodyy Posts: 377member
    Well deserved, but I'm sure ATT got what they wanted from doing that, which was to shift more people for a more cost effective plan for them.
  • Reply 9 of 48
    sestewartsestewart Posts: 102member

    AT&T rakes in 32 billion dollars a quarter on average. 100 million is 0.3125% of one quarter's revenue. They're not getting slapped at all.  

  • Reply 10 of 48
    robin huberrobin huber Posts: 3,260member
    I've been with ATT since the first iPhone. The "unlimited" service I contracted for was summarily throttled a couple of years ago. They seem to feel that the fact that they "informed" me they were breaking our contract gets them off the hook. Sleaze balls.
  • Reply 11 of 48
    peteopeteo Posts: 360member
    I just got a text the other day from at&t saying my data has reach 75% of the 5GB network management threshold. I'm on an unlimited plan. If i exceed 5GB this month I may experience reduced data speeds at times and in areas that experiencing network congestion (basicly everywhere)

    I.E. We want you to switch from your grandfathered unlimited plan to one of our more expensive 4gb limited plans and when you go over we will not throttle you because we make even $$$$$$ for every MB you go over.

    As far as I can tell this is illegal under network neutrality, since the reduced data speeds must apply to all users on a network congested node and can not be biased based on how much over all data that a user has used.
  • Reply 12 of 48
    tbelltbell Posts: 3,146member
    boltsfan17 wrote: »
    I gave up AT&T for throttling. I know I could have sued and more than likely won, but I didn't want to deal the hassle of taking AT&T to court. I switched to Verizon and have never looked back. 

    No you couldn't have. It's part of your contract with AT&T. It forces you to agree to mediation. AT&T pays for the mediator. Who do you think is going to win?.
  • Reply 13 of 48
    vmarksvmarks Posts: 692editor
    Quote:
    Originally Posted by AppleZilla View Post

     

    I abandoned my unlimited plan because of throttling. But also to get LTE, affordable hotspot capability, and superior coverage from Verizon.

     

    Since then AT&T has implemented LTE and now they are getting spanked for their crime.

     

    They lost a lot of customers. I wonder if it was worth it for them?




    I also abandoned my two unlimited plan lines because of throttling (reduced data) and other knee-capping (hotspot capability, FaceTime, etc.) - If I could have waited out the two years, perhaps sticking with ATT would have been the right move. At the time, they were giving me huge overages on phone call usage and refusing to sim unlock handsets, so VZW was attractive.

  • Reply 14 of 48
    technotechno Posts: 699member



    This is an example of how regulations can be a good thing. 

  • Reply 15 of 48
    larryalarrya Posts: 547member
    johnnash wrote: »
    I honestly don't know how I feel about this.  I'm glad they are getting financially spanked, but at the same time that means my monthly bill is probably going to be impacted to cover the cost.

    Your monthly bill is under contract and should not change. This strikes me as getting what you've already paying for since the network magically has the needed capacity for people on different plans.
  • Reply 16 of 48
    MacProMacPro Posts: 18,216member
    ceek74 wrote: »
    ...let the fine "throttling" begin.

    I'd be fine with throttling the carriers. :)
  • Reply 17 of 48
    sockrolidsockrolid Posts: 2,788member

    Originally Posted by AppleInsider View Post



    ... throttling of data plans that were advertised as being unlimited.

     

    I've never noticed any throttling, but I certainly do notice 1-bar 4G data rates.

    And once in a while I see the dreaded "E".

    Apparently I live in a Verizon town.

     

    Now that iPhones have multi-band cell hardware, wouldn't it be possible for the phone to use the strongest carrier in its current vicinity?  I'd gladly pay Apple 10% more than I'm paying AT&T if my iPhone were able to switch to the strongest carrier wherever I am.  Or even use multiple carriers simultaneously for data.  Apple would then pay carriers a pro-rated fee for using their networks.  (But don't take away my "unlimited" data plan.)  Sort of an all-carrier MVNO.

  • Reply 18 of 48
    AT&T fuming over why the FCC isn't in the telecom industry's back pocket as a rubber stamp for legalizing whatever the cabal of telcos want.
  • Reply 19 of 48
    I guess you can say this is throttling in reverse.
  • Reply 20 of 48
    SpamSandwichSpamSandwich Posts: 31,094member
    Quote:

    Originally Posted by SDW2001 View Post

     

    Bwahahahahaha.   LOVE it.  I get warnings all the time now.  I don't think I ever get throttled, but their network sucks and I'm probably bailing next time I get a new phone.  




    You do realize the "fine" (whatever it amounts to after AT&T appeals this, of course) will be folded into price increases for customers eventually? Companies don't absorb these costs, they pass them on to their customers.

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