AT&T is being fined $100 million for misleading customers about its unlimited data plans and slowing down customer data speeds without telling them after they used more than 5 GB of data.
The Federal Communications Commission said it plans to levy the biggest fine in history against AT&T Mobility for violating the Open Internet Order, which governs communication service providers.
The commission says the practice of slowing customer data speeds is called throttling and is misleading and deceiving and AT&T has violated rules on transparency.
FCC Chairman Tom Wheeler told the USA Today his commission was fining AT&T because he believed customers should 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.”
When AT&T first introduced their unlimited data plans in 2007, they neglected to tell customers the data speed on their phones would be significantly slowed, or capped, if they used more than 5 gigs of data.
Those speeds were 20 times slower than normal network speeds and made most mobile apps virtually unusable.
AT&T no longer sells the unlimited data plan, but users who already bought it can continue to use as much data as they want.
The communications giant AT&T disputes the FCC claim that it deceived consumers and plans to fight the $100 million fine. It says it has complied with the letter of law.
The FCC says it’s received hundreds of complaints from AT&T customers and is considering releasing them from their contracts without a penalty.
AT&T isn’t the only cell phone company to use the practice called throttling, in which customers who use a lot of data see their mobile apps slowed. They’re simply the only ones to continue using it after being warned by the FCC to stop.
Verizon was warned to stop the practice and complied with FCC demands last fall, according to the Wall Street Journal.
A different government agency, the Federal Trade Commission is already suing AT&T over the practice of capping customer’s data speeds.
The FTC lawsuit claims the throttling practice affected customers an average of 12 days during their billing cycle.
In that lawsuit AT&T claims the FTC has no authority over it because the company is classified as a common carrier, similar to a telephone company, according to the Inquisitr.
You might be the victim of throttling if you’ve seen your mobile apps become unusable during certain times of month.
[Photo by Kiyoshi Ota/Getty Images]