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FCC Fines AT&T $100 Million For Throttling Mobile Data Speed

June 17, 2015 - Written By Kishalaya Kundu

The Federal Communications Commission (FCC) has on Wednesday, suggested that AT&T be made to pay a massive $100 million fine for throttling data speeds of customers who are still on the company’s grandfathered unlimited data plans. The FCC cited “insufficient disclosure” and “misleading marketing” to come to its decision, according to a statement released on its website. According to the FCC, such slowdowns have been covert and non-transparent, as they have been enacted without explicitly informing customers that their connections will be slowed down to the point they would become unusable for the most part, thereby violating a Federal rule requiring unambiguousness in customer services like mobile data.

The FCC Chairman, Mr. Tom Wheeler released a statement saying, “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”. An FCC spokesperson also said the fine is the single largest the agency has ever proposed against any single entity till date. It’s worth mentioning here, that AT&T has been at loggerheads with the regulator over the past several months, ever since the company had to fork out $105 million to settle cramming allegations last year. Then came the FCC’s stand on reserved spectrum for the 600 MHz incentive auctions, which caused further friction between the two. The reclassification of broadband as a Tier-II utility only made things worse for the carrier.

As for the current controversy, the FCC says its acting on the basis of numerous complaints it’s received ever since AT&T decided to do away with the legacy unlimited plans in 2011. The regulator says, the company’s unlawful throttling practices have affected ‘millions of people’, and states the connections were slowed down for an average of 12 days per billing cycle (typically a month each). AT&T meanwhile, issued a statement, claiming it’s been “fully transparent” with its customers and said it will “vigorously dispute the FCC’s assertions”. It bears mentioning that the carrier is already under investigation from the Federal Trade Commission over the exact same issue. The commission’s investigations, conducted last October, seemed to suggest that AT&T slowed down data speeds for its customers on unlimited data plans by as much as 90%, affecting as many as 3.5 million customers.