AT&T Faces Biggest FCC Fine Ever for ‘Throttling’ Customers

Photo (cc) by JeepersMedia

AT&T is facing a $100 million fine from the Federal Communications Commission for allegedly slowing data speeds for its “unlimited” plan holders.

It’s a practice known as throttling, and it affected millions of the wireless carrier’s unlimited data plan customers, the Washington Post reports.

Many of AT&T’s “unlimited” customers have 4G LTE service, which typically provides mobile Internet speeds of more than 30 megabits per second, according to an FCC official cited by the Post who says that’s roughly 60 times faster than the speeds experienced when AT&T throttled subscribers, who were slowed to speeds equivalent to dial-up.

AT&T said it will fight the $100 million fine, which is the largest ever proposed by the FCC.

“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.”

The FCC is accusing AT&T of failing to notify its unlimited data customers that they would experience slower speeds than advertised with their plans, which is a violation of the FCC’s open Internet order, known as net neutrality, Forbes said.

Although AT&T no longer sells new unlimited data plans, a large number of customers opted to continue their existing unlimited data plans. “Due to the heavy consumption of data by video streaming services, several wireless carriers have set up tier data plans rather than offering unlimited data,” Forbes added.

Wireless carriers that still sell unlimited data plans typically throttle speeds after a certain amount of data is used, but they notify affected customers, Forbes said.

Take prepaid wireless carrier Virgin Mobile, for example. Virgin Mobile advertises unlimited data, but it reduces data speeds after between 1GB and 3GB has been consumed during the monthly cycle depending on the customer’s plan. Once Virgin Mobile customers approach high-speed data limits, they receive warnings in the form of text messages and emails.

AT&T is disputing the charges. “We have been fully transparent with our customers, providing notice in multiple ways and going well beyond the FCC’s disclosure requirements,” the company said in a statement.

If you’re an AT&T unlimited data plan customer who has been affected by the wireless carrier’s throttling, you probably won’t see a dime. If AT&T ends up paying the hefty fine, the money will likely go to the U.S. Treasury, the Post said.

AT&T has found itself in hot water for throttling its unlimited data customers before. The FCC filed suit against AT&T in October for allegedly throttling 3.5 million customers with dial-up speeds several days a month.

What’s your take? Does a $100 million fine fit the offense? Share your thoughts below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

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