The Federal Communications Commission is expected to fine AT&T; $100 million for misleading customers with unlimited data plans.
An FCC investigation found that AT&T; violated the transparency requirement under the 2010 net neutrality rules by offering “unlimited” data plans and surreptitiously throttling, or slowing, customers’ mobile internet access without telling them. The case does not involve the FCC’s newly published net neutrality rules passed earlier this year.
“Consumers deserve to get what they pay for,” FCC Chairman Tom Wheeler said in a Wednesday news release. “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.”
AT&T;’s “Maximum Bit Rate” policy capped unlimited plan consumers’ access speeds after using a certain amount of data in billing cycle, and “significantly impaired the ability of AT&T; customers to access the Internet or use data applications for the remainder of the billing cycle,” the FCC said.
To rectify the company’s wrongs — slowing 4G speeds to the crawl’s pace of dial-up internet — the FCC plans to impose the largest fine in the agency’s history and first net neutrality case.
AT&T; contested the decision saying, “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,” the company told the National Journal. “We have been fully transparent with our customers, providing notice in multiple ways and going well beyond the FCC’s disclosure requirements.”
The FCC’s two conservative commissioners, who fundamentally disagree with net neutrality regulations, defended AT&T; and criticized agency’s decision as arbitrary and heavy-handed.
“The Commission simply ignores many of the disclosures AT&T; made…it disregards specific language in that [net neutrality] order and related precedents that condone AT&T;’s conduct,” FCC commissioner Ajit Pai said in his dissenting statement. “The penalty assessed is drawn out of thin air.”
Republican commissioner Michael O’Reilly argued the FCC’s only point was that AT&T; didn’t specifically disclose how slow speeds would get under its policy, but the net neutrality rules don’t specify the need for explanation beyond general terms.
AT&T;’s policy stated that customers may experience slower data speeds toward the end of a billing cycle but should still be able to access the Web, with video streaming having the most noticeable affect.
Wednesday’s decision and impending fine could also hurt AT&T; in its legal battle with another federal regulator for its unlimited plan throttling. The Federal Trade Commission filed a lawsuit against the wireless provider in October for duping at least 3.5 million customers who bought and expected to get unlimited data plans. If the FTC proves its case, customers affected by the throttling could be refunded millions of dollars paid in unlimited plans.