AT&T hit with $100M fine for throttling “unlimited” data
The Federal Communications Commission announced on Wednesday it will impose a whopping $100 million fine on AT&T (T) to punish the phone carrier for severely slowing down the data speeds of customers who have “unlimited data plans.”
According to the FCC, 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.
“The Enforcement Bureau’s investigation revealed that millions of AT&T customers were affected. 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,” said the FCC in a news release.
AT&T said in a statement that it will fight the fine and that it “vigorously disputes the FCC’s assertions.”
The FCC investigation relates to “unlimited” data plans that AT&T first began to offer in 2007, and has since discontinued. Customers who signed up for the plan, however, complained that AT&T began imposing a cap in 2011, and then severely slowing down speeds when they exceeded that cap. Many also expressed frustration about being locked into long-term “unlimited” contracts despite the caps, and being forced to pay termination fees if they wanted to change plans.
“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.”
The FCC’s announcement comes after another agency, the Federal Trade Commission, already filed a lawsuit against the phone giant over the same issue. That lawsuit seeks refunds for consumers, and is going forward after a judge in April ruled that the FTC had jurisdiction to sue phone phone carrier.
The other big phone carriers – Verizon, Sprint and T-Mobile – have also engaged in throttling, but have done so less systemically, and in order to ease network congestion.
This story was updated several times