The Federal Communications Commission penalized telecommunications giant AT&T Mobility $100 Million for 'severely' slowing down the internet speeds of customers subscribed to the company's 'unlimited' plans. The figure is the highest ever fine the agency has imposed.
The FCC says that the company failed to properly notify its subscribers about the stipulations that come with their 'unlimited' data plans.
Agency chairman Tom Wheeler said:
"By not properly disclosing the policy to consumers who thought they were getting "unlimited" data, the company violated the FCC's rules on corporate transparency. Consumers deserve to get what they pay for 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 introduced the throttling practice in 2011, and quickly drew the ire of customers. Customers subscribed to such plans do have unlimited access to the internet, however once they consume more than 5 gigabytes of data in a month, their network speeds were throttled to levels that made the usage of mobile apps difficult or impossible, said one source speaking with USA Today.
For Example, AT&T's 4G LTE service promises speeds of more than 30 megabits per second. However once the data cap has been exceeded, speeds are limited to near dial up levels.
The carrier has vowed to fight the ruling saying it will "vigorously dispute the FCC's assertions."
"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," AT&T said. "We have been fully transparent with our customers, providing notice in multiple ways and going well beyond the FCC's disclosure requirements."
