AT&T fined $100 million for misleading customers about ‘unlimited’ data plans

“The FCC said that it is fining AT&T $100 million for misleading mobile customers about its “unlimited” data plans,” David Goldman reports for CNNMoney.

“AT&T subjected its unlimited data plan customers to significantly slower speeds after they used more than 3 GB of 3G data or 5 GB of 4G data in a single billing cycle. AT&T then failed to adequately notify its customers that their speeds would be throttled after they crossed a certain data threshold, the FCC said,” Goldman reports. “AT&T stopped offering unlimited data plans to new customers in 2009, but some customers have been grandfathered into the old plans. In 2011, AT&T instituted a ‘maximum bit rate’ policy, capping speeds at about a half megabit per second for heavy data users (compared to around 15 Mbps to 20 Mbps for typical 4G download speeds, the same as a home broadband connection).”

“AT&T says it will fight the fine,” Goldman reports. “‘We will vigorously dispute the FCC’s assertions,’ said Emily Edmonds, spokeswoman for AT&T. ‘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. We have been fully transparent with our customers, providing notice in multiple ways and going well beyond the FCC’s disclosure requirements.'”

Read more in the full article here.

MacDailyNews Take: AT&T unlimited data customers, has your data been throttled?

SEE ALSO:

As Apple’s iPhone launches, Verizon throttles bandwidth of top 5% of data hogs – February 3, 2011

35 Comments

    1. No one let me know of any throttling as I recall, but then on the other hand, despite rather heavy usage for the past several weeks, I have yet to detect any throttling. When my home internet went out and severely degraded, I switched to my iPhone 6Plus using its data plan and was surprised to get faster streaming on my phone than on my home internet. Not even a hiccup…and it doesn’t matter if I am at home or driving. Hey, this is great…

    1. Who do you think is going to pay this fine? Not AT&T. They will pass the $100 Million on to their customers, along with a $10 million interest charge due to the appeals they will exhaust before they wind up having to pay it. Like taxes, which corporations do not pay (their customers pay them in the price structure — I’m speaking wearing my economist hat, now), this fine will be structured into AT&T’s future price increases for handsets, data, air time, etc. A fine of this type is merely another name for an ad hoc tax.

      1. Agreeing, I don’t know what would be a superior alternative. Ideally, this decision does punctuate AT&T’s dirty doings to their customers and potential customers.

        Actually, thinking about similar decisions, why not directly distribute that money directly the AT&T customers? I’ve been part of two class action lawsuits from which I received some meagre compensation. That distribution takes something on the order of forever! But eventually some token arrives at the victim’s end. It is entirely absurd to have the government chomp down on the money and blow it on paying down their accumulated debt, etc.

        Hmm. So how about AT&T victims sue the US federal government for the money? That could happen! 😉

        1. The problem I see is that AT&T currently has around 125 million wireless subscribers and of those, probably 100 million have data plans. That means that each customer would be entitled to a refund of $1. It would cost AT&T about $3.50 to send out a business letter (standard cost to customize and send business letters for any business, including 37¢ bulk rate first class postage) to send a $1 refund check. That could total almost half a billion dollars to effectuate the payment of the fine to subscribers! Perhaps AT&T could find a way to do it for less, maybe cut the costs to a third or quarter of a billion dollars, but usually legal things like this have to be done with a personalized letter or postcard through the US mail. . . and that’s just assuming ONE mailing. It usually takes three: one to offer a legally required opt out, a second to explain the settlement, and then the payment check. LOL!

  1. The FCC has screwed us former iPhone 1 owners who are grandfathered into unlimited data. AT&T will simply eliminate this plan now. They only kept it this long as a courtesy and incentive to stay with AT&T.

    1. They had so many restrictions anyway that I transitioned to Family Plan: throttling, no tethering, no hotspot, no text. Now my entire family have iPhones with enough data, unlimited talk and text (which isn’t too important). All devices can hotspot through all phones, and still a lot cheaper than separate plans. Now, if AT&T could just get customer service; oh well, they ARE one notch above Comcast.

    2. Nope. Read the fine print. They weren’t fined for throttling. They were fined for not adequately informing unlimited customers of how they throttled.

      AT&T has already changed this. This fine is for past behavior.

      Personally I gave up my unlimited plan as soon as I got throttled and ended up with a sweet 30GB plan with rollover for the price of 15GB (during their double data promo).

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