AT&T Faces $100 Million FCC Fine

June 26, 2015 AT&T, Industry News

AT&T Mobility is facing a $100 million fine from the Federal Communications Commission related to the carrier’s alleged mishandling of its unlimited data plan offerings. On June 17, the FCC announced its plans to fine AT&T on the charges that the wireless company “severely slowed down the data speeds for customers with unlimited data plans and that the company failed to adequately notify its customers that they could receive speeds slower than the normal network speeds AT&T advertised.”

ATT Faces 100 Million FineThe $100 million fine is the largest proposed fine in FCC history.

FCC Chairman Tom Wheeler said the agency’s goal with the fine was to protect consumers from deceptive practices. The AT&T Mobility plan began offering unlimited data plans in 2007. The carrier has since discontinued the plan, and customers who opted for that plan are no longer able to renew the services. The FCC notes that while AT&T did announce it was doing away with the unlimited plan, it did not adequately work to inform subscribers of this.

The FCC further alleges AT&T in 2011 began capping maximum data speeds for its unlimited plan customers once a data threshold was reached for the monthly billing cycle. Representatives from the FCC said the agency received thousands of complaints related to AT&T Mobility plans. As part of its investigation, the FCC found that millions of customers were affected by the throttling, with the average subscriber receiving throttled service for 12 days per billing cycle.

“Consumers deserve to get what they pay for,” Wheeler said. “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.”

The FCC noted that while AT&T did note its policy change, it was inadequate in light of the transparency requirements laid out by the Open Internet Order, which requires carriers to provide sufficient information to subscribers so that subscribers can make an informed choice related to their wireless service.

The proposed $100 million fine is not an order, and it is likely the FCC and AT&T will settle out of court, industry analysts note.

An AT&T spokesperson said to the Wall Street Journal that the company plans on “vigorously disputing the FCC’s assertions.”

AT&T is not the only carrier to face scrutiny related to data limitations. In late 2014, T-Mobile US announced it was providing greater transparency to consumers whose mobile data speeds were subject to throttling. The agreement between the carrier and the FCC came in the wake of FCC reports that T-Mobile customers were only able to access speed-testing applications that showed un-throttled network speeds, thereby disallowing customers to access the true speeds at which they were being throttled.

As FCC Enforcement Bureau Chief Travis LeBlanc noted in a statement, the agency is working to ensure carriers are held accountable for their claimed wireless offerings to consumers.

“Unlimited means unlimited,” said LeBlanc. “As today’s action demonstrates, the commission is committed to holding accountable those broadband providers who fail to be fully transparent about data limits.”