AT&T Got Hit With A $100 Million Fine By The FCC For Throttling Unlimited Data Speeds

Flickr / Mike Mozart
Flickr / Mike Mozart

When AT&T promised their customers “unlimited” data, it turns out that their fingers might have been crossed behind their back.

The Federal Communications Commission just delivered AT&T a giant roundhouse kick to the gut by levying them a $100 million fine, the largest in their history.

What did AT&T do exactly?

When customers who were enrolled in the “unlimited” data plan crossed a certain threshold of usage, AT&T would automatically “throttle” their data access, essentially giving them speeds comparable to dial-up.

The FCC received “thousands” of complaints from AT&T customers, and deemed their “throttle” strategy a dishonest business practice.

“Consumers deserve to get what they pay for. 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.” FCC Chairman Tom Wheeler said.

If the FCC was hoping that AT&T would quietly hand over the money and submissively go away, they are probably a little disappointed.

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

The FCC is also exploring the idea of letting AT&T customers leave their contracts without penalty.

AT&T’s maneuver is a symptom of exploding cellular data demand across the world. How to fill global demand, while also remaining profitable, is certainly a challenge for all data providers today.

AT&T learned, however, that misleading consumers is not a viable way of meeting that challenge. TC mark

Jacob Geers

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