Fcc To Fine At&t $100M

[4Vikram]

The Federal Communications Commission will fine AT&T $100 million for misleading customers about its unlimited mobile data plans.

 

The FCC alleges that AT&T slowed service for subscribers to its unlimited data service when they exceeded more than 5GB of data in a month. AT&T, the agency says, dropped speeds to as low as 512 kilobits per second, which is about 5 percent of what it advertised for its 4G LTE service, and also failed to adequately notify its customers that they could receive slower-than-advertised speeds.

By "falsely labeling" these plans as allowing unlimited data usage, AT&T is violating the 2010 Open Internet Transparency Rule, the FCC said. The agency also alleges the company failed to sufficiently inform customers of the maximum speed they would receive.

"Consumers deserve to get what they pay for," FCC Chairman Tom Wheeler said in a statement. "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."

AT&T claims it had notified customers about its policy in multiple ways. It also said that the FCC seemed to have found the practice within bounds.

 

"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."

AT&T began offering unlimited data plans in 2007, and it stopped offering these plans to new customers in 2010. Since that time, the company has allowed existing customers to keep their unlimited plans, but in 2011, the company began a policy through which it would limit the speed of the service when customers reached a certain threshold of usage.

The "Maximum Bit Rate" policy capped the maximum data speeds for unlimited customers after they used a set amount of data within a billing cycle. The FCC says 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, such as streaming video or accessing Web pages, for the remainder of the billing cycle.

The FCC says it has received thousands of complaints from customers of AT&T's unlimited data plan, who said they felt misled by the company's policy. Consumers also complained that they could not cancel service without having to pay early-termination fees.

The Federal Trade Commission sued AT&T in October 2014 for the same issue, also alleging that its policy was deceptive.

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[4Vikram]

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