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FCC issues AT&T a $100 million fine for quietly throttling unlimited data plans

The FCC has just issued AT&T a $100 million fine for misleading customers about its definition of the term "unlimited".
By
June 17, 2015

The FCC has just issued AT&T, the United States’ second largest wireless provider, a $100 million fine for misleading customers about its definition of the term “unlimited”. According to the filing, AT&T is getting accused of two major violations: using the term “unlimited” to label a data plan that was in fact subject to prolonged data speed reductions, and failing to disclose the data speed reduction to the customers after they reached the data threshold. According to the FCC, subscribers on average receive throttled service for 12 days per billing cycle. The filing explains:

Although AT&T asserts that it has provided ample disclosures about these policies, we find that these disclosures do not cure AT&T’s apparent violations of the Open Internet Transparency Rule. AT&T’s practices deprived consumers of sufficient information to make informed choices about their broadband service and thereby impeded competition in the marketplace for such services

The FCC says that the reduced speeds, sometimes dropping down to just 256kbps or 512kbps, significantly impaired customers’ ability to use AT&T’s data service and perform basic functions.

This is the largest proposed fine in the history of the wireless carrier

Although a customer will be able to potentially send an email by using these speeds, the FCC claims that he or she may find it completely impossible to use their smartphones in ways that most people use them today, such as navigating to a location using Google Maps or using a video chat application to connect with friends and family. The report also states that a minimum download speed of 700kbps is necessary to use a video chat app, and 3.5Mbps is the minimum to watch a standard-definition television show. The commission also says that “at 512kbps, a ten megabyte file would take nearly three minutes to download. At AT&T’s widely advertised speed of 12 Mbps, it would take less than 10 seconds.”

It should be noted that this proposal is not final – the FCC only charged the wireless carrier for violating these important requirements. Of course, AT&T declined to comment on the FCC’s fine. We’ll be sure to let you know when we hear more about the situation.