FCC slaps AT&T with $100 million fine for throttling unlimited data plans
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.
"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.
Comments
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?
...let the fine "throttling" begin.
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.
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.
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.
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.
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.
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.
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?.
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.
This is an example of how regulations can be a good thing.
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.
I'd be fine with throttling the carriers.
... 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.
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.