AT&T Fined $100 Million for Misleading Consumers

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Summary: AT&T must pay $100 million for misleading its customers about their data plans.

AT&T will face a hefty $100 million in fines for misleading its customers about their unlimited mobile data plans, according to FCC.gov. The Federal Communications Commission has accused AT&T of slowing down data speeds of its customers that paid for unlimited plans. The FCC also argues that AT&T did not adequately notify the customers that they may receive slower data speeds than the normal network speeds that were advertised.

  

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Read about the initial charges here.

In 2007, AT&T began offering unlimited data plans. The company no longer offers unlimited data, but allowed customers that already had such plans to renew their contracts. For these customers, their data plans were still labeled as “unlimited.”

However, in 2011, AT&T initiated a “Maximum Bit Rate” policy that capped the maximum data speeds for unlimited data customers after they exceeded a certain amount of data usage in a month. The capped speeds were slower than normal network speeds, and disrupted these customers’ ability to use data applications or access the Internet until the next billing cycle began. According to the Washington Post, data speeds were advertised at a rate of 5 to 12 Mbps, but unlimited data customers had their rates capped at 512 kbps. The article also notes that 700 kbps is the speed required to use FaceTime.

The FCC has charged AT&T with violating the 2010 Open Internet Transparency Rule by falsely labeling their data plans as unlimited, and by failing to properly inform customers of the maximum speed they would be able to use under the Maximum Bit Rate Policy.

The 2010 Open Internet Order requires fixed and mobile broadband providers to disclose sufficient and accurate information about the providers’ network management, performance, and terms of service. The purpose of the rule is to ensure that consumers are well informed when selecting a provider.

Last year, AT&T was ordered to pay $105 million for cramming.

Tom Wheeler, the chairman of the FCC, said, “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.”

Additionally, FCC Enforcement Bureau Chief Travis LeBlanc said, “Unlimited means unlimited. As today’s action demonstrates the Commission is committed to holding accountable those broadband providers who fail to be full transparent about data limits.”

Verizon got rid of unlimited data plans in 2012.

Since 2011, the FCC ha received thousands of complaints from AT&T customers about their unlimited data plans. They told officials that they were surprised and felt that AT&T had misrepresented the nature of their plans. Customers also complained that they were locked into a contract with AT&T for an unlimited data plan that was far from unlimited. CNN adds that the data was slowed after 3 GB of 3G data or 5 GB of 4G data was used in a single cycle.

Millions of AT&T customers were affected. Customers whose data was impacted often had their speeds slowed for an average of 12 days per billing. Using GPS mapping or streaming video was significantly impacted by the restraints.

Source: FCC.gov

Photo credit: fundelight.com