AT&T might finally have to pay for the way it has treated its unlimited data customers, throttling users to extremely slow speeds after 5 GB of usage.
The Federal Communications Commission said on Wednesday that it plans to slap a $100 million dollar fine on AT&T for violating the FCC’s Open Internet Order. AT&T misled customers on its unlimited plans, who had been promised truly unlimited data, by drastically slowing their speeds after they hit a certain point.
AT&T’s throttling affects unlimited data customers once they have used more than 5 GB of data in a single month. The throttling slows speeds down so much that the internet is practically unusable, said an FCC official. While AT&T no longer sells these plans to new customers, customers who already were on these plans are “grandfathered” in, meaning that they can keep the plan as long as they make no changes to the service contract.
Carriers have been clamping down on unlimited data plans in recent years, due to the load they place on the networks, while not being profitable enough for the carriers. Tier-based pricing is the new trend, because it enables carriers to charge extra for data overages. Throttling of unlimited data plans is allowed under the FCC’s rules, but it requires that carriers disclose the practice to its customers, which AT&T has not done in a satisfactory way.
In October, the Federal Trade Commission filed a lawsuit against AT&T for similar reasons. That case is still ongoing.
AT&T, of course, is fighting the FCC’s fines. “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 said. “We have been fully transparent with our customers, providing notice in multiple ways and going well beyond the FCC’s disclosure requirements.”
The FCC argued that while AT&T did warn its customers, its warnings were not sufficient. It did not disclose the point at which data would be throttled, nor did it say what speeds the throttle would impose.
AT&T instituted the limits to its so called unlimited data plans in 2011, after which the FCC immediately began receiving complains from AT&T’s customers. A major concern among customers was the long-term contracts, which locked users in to the deceptive plans unless they paid an expensive early termination fee.
The FCC has stated that they are looking into the possibility of forcing AT&T to allow these customers out of their contracts without paying the early termination fee.