The Federal Trade Commission has just announced a suit against AT&T over the carrier’s practice of throttling unlimited data customers.
In the complaint, the FCC says AT&T has charged customers for unlimited plans, but when they hit a certain amount of usage, their data speeds are reduced – in some cases nearly 90 percent.
“AT&T promised its customers ‘unlimited’ data, and in many instances, it has failed to deliver on that promise,” said FTC Chairwoman Edith Ramirez. “The issue here is simple: ‘unlimited’ means unlimited.”
The FTC says AT&T has throttled at least 3.5 million customers a total of more than 25 million times. Throttling began, for some unlimited data plan customers, after they used as little as 2GB of data during a monthly billing period:
According to the FTC’s complaint, AT&T’s marketing materials emphasized the “unlimited” amount of data that would be available to consumers who signed up for its unlimited plans. The complaint alleges that, even as unlimited plan consumers renewed their contracts, the company still failed to inform them of the throttling program. When customers canceled their contracts after being throttled, AT&T charged those customers early termination fees, which typically amount to hundreds of dollars.
AT&T, at least according to the FTC, violated the FTC by changing the terms of customers’ unlimited data plans under contract and failing to disclose the program to users who renewed their plans.
We’ve known about AT&T’s throttling practices for quite some time. Take a look at our special report of AppAdvice Daily from 2012 that covers the issue. Click here if you can’t see the video.
It’s great to see the FTC finally take action regarding this important issue.
AT&T has now issued a statement to AppAdvice saying the suit is “baseless.” Here’s the complete statement from Wayne Watts, senior executive vice president and general counsel at AT&T:
“The FTC’s allegations are baseless and have nothing to do with the substance of our network management program. It’s baffling as to why the FTC would choose to take this action against a company that, like all major wireless providers, manages its network resources to provide the best possible service to all customers, and does it in a way that is fully transparent and consistent with the law and our contracts.
“We have been completely transparent with customers since the very beginning. We informed all unlimited data-plan customers via bill notices and anational press release that resulted in nearly 2,000 news stories, well before the program was implemented. In addition, this program has affected only about 3% of our customers, and before any customer is affected, they are also notified by text message.”
For other news today, see: It’s amazing just how little Apple pays for memory on the new iPad Air 2, Microsoft introduces new Office 365 APIs, SDKs and more for app developers, and Apple confirms decline in iTunes music sales in new SEC filing.