FCC To Fine AT&T $100 Million for 'Unlimited' Data Plans
AT&T has long boasted about its unlimited wireless data plans. But now it's been hit with a fine that might limit future claims made by the company. The Federal Communications Commission said Wednesday it will fine AT&T Inc. $100 million for allegedly misleading consumers about unlimited data plans.
The FCC said that AT&T sold consumers data plans advertised as unlimited, but then capped data speeds for those customers after they had used up set amounts of data within each billing cycle. Those capped speeds were much slower than the normal network speeds advertised by AT&T, according to the agency. Also, that hurt the ability of consumers to access the Internet or use applications for the rest of their billing cycles, the FCC said.
Thousands of Complaints
Since 2011, the FCC has received thousands of complaints from AT&T’s unlimited data plan customers. According to the complaints, the customers were surprised and felt misled by AT&T’s policy of intentionally reducing their speeds. Consumers also complained about being locked into long-term AT&T contracts that were subject to early termination fees, all to get unlimited data plans that, as it turned out, weren't really unlimited.
The FCC said AT&T violated the transparency requirements of its 2010 Open Internet rules by labeling the plans as unlimited. Most of those rules were struck down by a federal court in January 2014, but the transparency requirement was upheld.
"Consumers deserve to get what they pay for," said FCC Chairman Tom Wheeler. "Broadband providers must be up front 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."
Plans To Defend
An AT&T spokesman told reporters that the company plans on vigorously disputing the FCC’s assertions. The spokesman said the FCC previously identified the practice as a legitimate and reasonable way to manage its network to benefit all customers.
According to the FCC, this represents the largest fine the agency has ever proposed. The agency maintains that over the years AT&T has made billions of dollars off the practice of capping supposedly unlimited access to data.
The investigation by the FCC’s Enforcement Bureau showed that millions of AT&T customers were affected. The customers who were subject to speed reductions were slowed for an average of 12 days per billing cycle, affecting their ability to use common data applications such as streaming video.
The FCC found that the notice provided to unlimited data plan customers about AT&T’s Maximum Bit Rate policy was not enough to enable customers to make informed decisions about their data plans.
"Unlimited means unlimited," said FCC Enforcement Bureau Chief Travis LeBlanc. "As today’s action demonstrates, the commission is committed to holding accountable those broadband providers who fail to be fully transparent about data limits."
Posted: 2015-06-18 @ 9:36pm PT
As much as I dislike the practice of throttling back data speeds, I would have to agree with AT&T on this one. Yes, I understand that "unlimited means unlimited", but there was never an issue of data usage being capped at X amount of Gb or Mb or any arbitrary quantity. Here, AT&T IS correct to manage their networks in the best way to optimize the spectrum for ALL of its users. I gotta say, I hope AT&T wins this appeal...
Posted: 2015-06-17 @ 2:19pm PT
AT&T is too expensive for its unlimited plans. When you "buy up" to keep from getting hit with its "one time" add-on fees it's never ending. My monthly bill is the cost of a Mercedes plan with Kia performance.