AT&T hit with $100 million fine after throttling its ‘unlimited’ data plans

The Federal Communications Commission slapped AT&T with a $100 million fine Wednesday, accusing the country's second-largest cellular carrier of improperly slowing down Internet speeds for customers who had signed up for "unlimited" data plans.

The FCC found that when customers used up a certain amount of data watching movies or browsing the Web, AT&T "throttled" their Internet speeds so that they were much slower than normal. Millions of AT&T customers were affected by the practice, according to the FCC.

The fine, which AT&T says it will fight, is the largest ever levied by the agency.

AT&T implemented the practice in 2011, prompting thousands of customers to complain to the FCC, according to an agency statement.

By not properly disclosing the policy to consumers who thought they were getting "unlimited" data, the company violated the FCC's rules on corporate transparency, FCC Chairman Tom Wheeler said in a statement.

"Consumers deserve to get what they pay for,” Wheeler said. “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.”

Many of AT&T’s unlimited customers have 4G LTE service, which typically provides mobile Internet speeds of more than 30 megabits per second. That's roughly 60 times faster than the speeds experienced when AT&T throttled subscribers, who were slowed to speeds equivalent to dial-up, according to a senior FCC official.

But consumers are unlikely to receive any money from the fine, which will go instead to the U.S. Treasury, said the agency official.

AT&T disputed the charges. “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," the company said in a statement.

"We have been fully transparent with our customers, providing notice in multiple ways and going well beyond the FCC’s disclosure requirements.”

This isn't the first time AT&T's unlimited data policy has landed the company in hot water. The Federal Trade Commission sued the telecom company in October, alleging that 3.5 million users had their Internet service slowed to dial-up speeds an average of 12 days every month.

This comes at a tricky time for AT&T, which is trying to convince regulators to approve its $49 billion acquisition of the nation’s largest satellite TV provider, DirecTV.

Source
 
As I mentioned in another thread, the penalty is levied for false advertising and lack of transparency and not specifically for the act of throttling. AT&T sold unlimited plans under contract without specifying throttling policy and later started throttling heavy users without prior notice about the policies to the customers and without giving any option to opt out of the plan without incurring penalties for breaking the contract.

When FCC last attempted to bring in net neutrality, it was contested in courts and a regulation related to transparency from operators was the only one that survived a 2010 court ruling. That is the regulation that FCC has based this action on. The penalty is a minuscule @ 100m, but they have also ruled that AT&T should allow any customer to opt out of the plan without any penalty.

Even according to the new Net neutrality regulations in US, my understanding is that throttling of specific services is prohibited, but throttling of users to prevent network congestion is still valid provided that the operator is transparent to the customer about the policies.

So, this is not related to FUP.
 
Here plenty of ISPs throttle and false advertise. Internet service in India is terrible for the price we pay for the crappy bandwidth we get out of it.
 
Back
Top