AT&T Fined $100 Million by FCC for Slowing Down Unlimited Data Customers Service
AT&T will be fined $100 million by the Federal Communications Commission for its role in misleading customers who thought they had unrestricted unlimited data plans, according to CNet.
The FCC said AT&T significantly slowed down subscribers data speeds when they hit the 5 GB mark each month. The FCC says that AT&T would slow down these subscribers to as low as 512 kilobits per second when they hit that mark. That speed is only about 5 percent of the speed that AT&T advertises for its 4G LTE service.
The FCC also alleged that AT&T did not inform customers that their speeds would be slowed down.
AT&T said that these plans offered unlimited data and the FCC says that they were "falsely labeling" them that way. The FCC said this is a violation of the Open Internet Transparency Rule. They also said that AT&T failed to divulge the maximum speed that customers 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."
Responding to the allegations, AT&T said it did inform customers about their data speeds in multiple ways. AT&T also said that it thought the FCC accepted its business practice.
"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 started selling unlimited data plans in 2007, but stopped offering them in 2010 to new customers. Customers that still had the unlimited data plans were allowed to keep them. In 2011, AT&T made a policy to slow down data speeds when a customer reaches a certain amount of usage each month.
The FCC said these speeds were much slower than the speeds that AT&T advertises to its customers. They say that customers' decreased speeds were so slow that it impaired their ability to browse the web or stream videos for the rest of the month.
The FCC stated they received thousands of complaints from customers describing their speeds were slowed down and they felt misled by AT&T's unlimited data plan. These customers were not able to cancel their service without paying hefty early-termination fees.
According to the USAToday, AT&T has 30 days to respond to the FCC's complaint. After that time elapses, they will be required to pay the fine.
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