The Federal Communications Commission (FCC) announced Wednesday that it will impose a $100 million fine on AT&T for misleading their mobile customers with “unlimited” data plans.
The unlimited data plan customers experienced lower speeds after they reached a cap of 3GB of 3G data and 5GB of 4G data in a single billing cycle. AT&T did not inform its customers that their data speeds will be “throttled” after consuming a certain data amount, the FCC said.
In a statement, FCC Chairman Tom Wheeler said, “Consumers deserve to get what they pay for. 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.”
Although AT&T does not provide unlimited plans anymore, the customers using the same since they were still in the market can use as much data as they need.
Tier-pricing for different data packages – charging customers higher fees when they exceed the allotted data limitation – have been introduced in recent years. Other carriers lower the speeds after the data usage reaches a certain amount, a practice that has become more common recently, according to USA Today.
In 2011, AT&T had introduced a “maximum bitrate policy,” according to which speeds were slowed down after a certain amount of data usage was achieved in a month. The FCC said that this was a breach of the agency’s net neutrality rules, making it difficult for customers to browse the Internet or access applications.
According to data gathered from Ericsson, 45 percent of mobile data traffic comprises of video viewing. This number is expected to rise to 60 percent by 2020, as reported by NBC News.
AT&T had informed their unlimited data plan customers in a note posted on its website, dated July 29, 2011, saying that they “may experience reduced speeds once their usage in a billing cycle reaches the level that puts them among the top 5% of heaviest data users.”
However, an FCC official said the notification was unclear as to when the retardation would begin and by how much the speeds will be lowered.
Harold Feld, senior vice president of consumer advocacy group Public Knowledge, said, “It’s important to understand that this is not an exercise in being clever. The FCC imposes this because people increasingly depend on broadband. This is not a washer on a limited warranty. This is not a game.”
AT&T maintains that it will contest the fine.
AT&T Spokeswoman Emily Edmonds said, “We will vigorously dispute the FCC’s assertions. 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.”
Verizon had repealed a similar plan that lowered the speeds of 4G data for unlimited data plan customers in October 2014. T-Mobile was issued a notice for throttling data speeds, while Tracfone was sued for $40 million in January for misleading its customers with deceptive unlimited data plans.
The FCC, which received numerous complaints from AT&T customers using unlimited data plans, had accused the telecommunications company last October.
FCC Enforcement Bureau Chief Travis LeBlanc was quoted by CNN, saying, “Unlimited means unlimited. As today’s action demonstrates, the Commission is committed to holding accountable those broadband providers who fail to be fully transparent about data limits.”
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