The Federal Communications Commission is slapping AT&T Mobility with a fine of $100 million for “misleading its customers about unlimited mobile data plans” which includes the practice of “severely” slowing down data speeds.
AT&T also failed to adequately notify its customers that they could receive speeds slower than the normal network speeds AT&T advertised, the FCC said.
The customers who were subject to speed reductions were slowed for an average of 12 days per billing cycle, significantly impeding their ability to use common data applications such as GPS mapping or streaming video, the FCC said.
AT&T began offering unlimited data plans in 2007, which allows customers to use unrestricted amounts of data. The carrier no longer offers unlimited plans to new customers, but it allows current unlimited customers to renew their plans. Moreover, it has sold millions of existing unlimited customers new term contracts for data plans that continue to be labeled as “unlimited”.
The FCC said it received thousands of complaints over AT&T’s slow mobile internet, and that the carrier failed to notify subscribers it was providing slower-than-advertised speeds.
‘Providers Must Be Upfront and Transparent’
“Consumers deserve to get what they pay for,” said FCC Chairman Tom Wheeler. “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.”
Last October, the Federal Trade Commission addressed these same issues in a lawsuit against AT&T Mobility, alleging that the wireless carrier misled millions of consumers by promising unlimited data plans, but often delivering “throttled” or much reduced data speeds.
In 2011, AT&T started its “Maximum Bit Rate” policy and capped the maximum data speeds for unlimited customers after they used a set amount of data within a billing cycle. The FCC said that the capped speeds “were much slower than the normal network speeds AT&T advertised and significantly impaired the ability of AT&T customers to access the Internet or use data applications for the remainder of the billing cycle.”
“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.”