FTC Files Lawsuit Over AT&T’s Throttling Of Unlimited Data Customers

Chuck Bednar for redOrbit.com – Your Universe Online
The US Federal Trade Commission (FTC) announced on Tuesday that it was filing a federal court complaint against AT&T Mobility accusing the company of throttling unlimited data plan customers by up to 90 percent.
The FTC’s complaint accuses the second-ranked wireless carrier in the US of misleading consumers by failing to adequately disclose that their data speeds on unlimited plans are reduced once customers reach a certain amount of data use in a single billing cycle, making many common mobile applications extremely difficult to use.
“AT&T promised its customers ‘unlimited’ data, and in many instances, it has failed to deliver on that promise,” FTC Chairwoman Edith Ramirez said in a statement. “The issue here is simple: ‘unlimited’ means unlimited.”
According to USA Today’s Mike Snider, the FTC said that AT&T first began throttling data speeds for unlimited customers in 2011 after those individuals used as little as 2 GB worth of data during a billing period. Overall, the agency said that at least 3.5 million unique customers have been throttled more than 25 million times, he added.
The FTC’s complaint said that such practices contradicted AT&T’s own marketing materials, which emphasized the “unlimited” amount of data available to customers that signed up for these plans. The agency also said that the company continued to fail to inform those customers of the throttling practices even when they renewed their contracts, and those who canceled their contracts over throttling were hit with early termination fees.
Furthermore, the FTC said that customers participating in AT&T focus groups “strongly objected” to the idea of a throttling program, and that company documents indicated that the wireless service provider had received “thousands of complaints” about slow data speeds on unlimited plans, with some calling the program a “bait and switch.”
AT&T has called the allegations “baseless,” telling Diane Bartz of Reuters that it was necessary to reduce data transfer speeds in order to manage network resources. Wayne Watts, AT&T’s general counsel, said that the company had been “completely transparent” about the practice “since the very beginning,” that only about three percent of customers are affected, and that those individuals are notified by text messages in advance.
“It’s baffling as to why the FTC would choose to take this action against a company that, like all major wireless providers, manages its network resources to provide the best possible service to all customers, and does it in a way that is fully transparent and consistent with the law and our contracts,” Watts added, according to Snider.
“AT&T says on its support website that people who have certain plans can experience data slowdowns once they exceed certain limits,” Bartz said. The website said that 3G smartphone customers will experience slowdowns after using 3 GB of data in a month, and 4G customers can use up to 5 GB before experiencing potential issues. Those unhappy with the slower Internet “are told that they can use Wi-Fi or switch to a different AT&T plan,” she added.
The FTC said that it had been working with the US Federal Communications Commission (FCC), which issued warnings to wireless carriers about throttling practices, on the matter. As CNET’s Roger Cheng noted, the FCC recently got into a dispute with Verizon over the carrier’s plans to slow down the connection speeds of some high-use LTE customers. Verizon relented and abandoned plans to do so earlier this month.
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