AT&T hit with $100 million fine from FCC over throttled data complaints on unlimited plans

AT&T has received a $100 million fine from the FCC in regards to complaints that it was throttling data on unlimited plans. The FCC says it has received thousands of complaints from customers who noticed lower data speeds on their grandfathered data plan, and as a result AT&T will have to pay a hefty sum. In the ruling, the FCC points out that "AT&T inhibited consumers' ability to make informed choices about mobile broadband data services," and as a result AT&T has been issued a $100 million fine. AT&T was found to have violated the Commission's Open Internet Transparency Rule, and the fine will bring the company back into compliance. The two specific violations were:

  • (1) using the misleading and inaccurate term "unlimited" to label a data plan that was in fact subject to prolonged speed reductions after a customer used a set amount of data; and
  • (2) failing to disclose the express speed reductions that it applied to "unlimited" data plan customers once they hit a specified data threshold.

While AT&T provided some warning to customers, the FCC found that it was not sufficient enough to fulfill the requirements of the transparency rule. As an additional part of the ruling, AT&T must notify each customer with an unlimited plan of the violation, and include a revised disclosure statement. In the revised disclosure the company must include the maximum speeds to which it limits data plans, and AT&T must allow any customers with the unlimited data plan who wish to cancel their plan to do so without charge.

Source: FCC

Jared DiPane

Jared started off writing about mobile phones back when BlackBerry ruled the market, and Windows Mobile was kinda cool. Now, with a family, mortgage and other responsibilities he has no choice but to look for the best deals, and he's here to share them with you.

  • The government works! It actually works!!!
  • Works for who? Them? Getting $100 Million? Of course its gonna work... Posted via the Windows Central App for Android
  • Seriously?  AT&T will have to delvier what they said they would now, or get fined again.  Compaines just can't go changing sterms because they figure out ways to squeeze more cash from us.
  • This will get appealed. It's no telling when anything will change. Woop woop Posted via the Windows Central App for Android
  • Yes it may get appealed. Things may not change, but it doesn't mean they will win either so this is great news becaue it will put them on the spotlight. So you can bet next time they are tempted to try this, they will at least consider that the old days where they could do anything and never get caught are gone. Sure they can fight it forever, but most companies simply figure out the damage and risk isn't worth it when you're slammed with consumer deception. So yeah, the system works. It is not perfect. But it is working by the fact you even read about this today :)
  • You didn't read the article carefully. They won't have to deliver what they said they would. They just have to provide better disclosures about the throttling and give customers the options to cancel the plan without any penalties. It sounds like the throttling can still continue.
  • Cancel without penalty?  So if I get a new subsidized phone and then rev up my data use and when given my warning about said data use I can cancel and they can't give me a early term fee?  Hmmmmm...could this be my government sanctioned payback?? 
  • Agreed, the fine should have gone to the customers it deceived.
  • You get it. Posted via the Windows Central App for Android
  • And who says that will not happen anyway? This still leaves them open to a class action lawsuit which even though it will not go after the 100M, it can still go after ATT for decieving a class of customers.
  • Consumers can't file class action lawsuit if they have signed contracts. Its not a complete loss though as there can still be the potential of lawsuits coming down the pipe. Posted via the Windows Central App for Android
  • It wasn't a class action suit, which, if I remember correctly, AT&T is immune to because of their Terms that we all agree to by using them.  
  • No, the govt works for itself. Isn't it more logical to fine AT&T in a way that it should pay back to all consumers for those months when data was throttled. This $100m will go into govt's account. Those who were effected will not get anything.
  • They get the ability to get out of their contract! That could be worth a couple hundred on it's own.
  • No. I have an unlimited account with them and I am not under contract because I haven't bought a new phone from them in over two years. So I get nothing but the option to lose my unlimited account. This benefits ATT, not me.
  • Yep this will most definitely kill any chances of keeping your unlimited data for future upgrades on 2 year contracts. Yaaaaay... /sarcasm Posted via the Windows Central App for Android
  • to be honest, they can just drop you anytime they want for any reason they want. so yeah.
  • You get it too. Posted via the Windows Central App for Android
  • nope. Those affected can still sue. I'm sure a law firm or several are already preparing to file a class action.
  • It was probably ~$300 but was decreased to $200 so long as $100 goes to an "unknown" party or provide back doors to the OS in case those are needed quickly during dire situations.
  • It's ok, they'll recoup that fine with some weird $1 service charge on every customer's bill.
  • Basically Posted via the Windows Central App for Android
  • Or maybe something new like charging the same monthly rates for non-subsidized phones....oh wait..
  • Watch out for your next bill... "FCC Transparency Tax: $1.27"
  • That's fine. They don't have to service charge you anything. They can just charge you. And if you don't like that, go somewhere else. They have no power over your choice.
  • Yay
  • Well, I'd be more excited when this hold up in Appeal, and if I was getting something back in return for then taking my money and not delivering on the service. Make them pay me back for a years worth of unlimited plan fees, then watch them explain themselves to their Shareholders.
    No pain, no change in corporate behavior.
  • Should the affected customers get a cut of that sweet sweet cheddar cheese? I mean, that's basically a free $100mil payday for the Govt right?
  • it is a punitive measure. Given they cannot jail a corporation that is the only thing they can do. And no, you don't spread the result of the punishment. I mean you could do that but that would require this thing called a law and enforced by this entity called...goverment :) And before that it needs to pass by elected members of the people so if you want the money, call your senator/representative.
  • Yea make it 500 million maybe they learn
  • That is like pennies to AT&T
  • Good! Give me one more reason to leave this carrier if I don't have the 830 Denim update in time for my July 4 summer vacation!!
  • Breaking my contract for free is tempting since I'm only 8mths into a two year contract.
  • I have the same dilemma.
  • You have an unlimited data plan? This effects mostly people who are grandfathered into the old unlimited data plans which haven't been available for several years.
  • Our faith in FCC has been restored.thanks!
  • Sorry, not a firm believer that the govt is competent enough to really make a difference easy course is to fine. But I'm also not a believer in the govt legislating on technology they have no expertise and telling corporations how to run business.bandwidth hogs kill the traffic for the rest of us. ​ ​
  • and what exactly would you suggest? arrest their CEO?
  • AT&T knew this was coming. Probably why they have abandoned 2 year cell phone plans.  Anyway, still my favorite carrier.
  • Dang, I switched my unlimited plan in October for the mobile share 20GB plan because of how bad I was being throttled basically every month, to a point I couldn't even stream music when I travled. Guessing I may not be able to cancel my service with them for free now.
  • Here in India the term "unlimited" is misused by every telecom operator. They are blatantly terming 20 GB or 40 GB limited plans as unlimited just by providing ridiculous post FUP speeds of 25 kbps. Unfortunately our telecom regulator is hands in gloves with these operators so that they can continue with such malpractices. Salute FCC for such a move against a giant company.
  • Att is the evil sneaky company. U should all go to tmobile. They're shaking up the industry.
  • They shake up the headlines, but still lose money. I also have friends with the TMob here in LA and they experience too many cold spots. 
  • Ive never really understood this. If a customer signed up dor an unlimited plan isnt AT&T within their rights to refuse to renew that at contracts end?
  • They could and they might after this.  Grandfathering in the old unlimited plans was a way to keep old customers "loyal".  Verizon did it too.
  • These large corps just keep doing what they want no matter how many fines they get hit with. The irony is that the government is fining them but customers arent getting comped from Att...
  • I think its funny how no one has commented in AT&Ts defense. There is almost always someone playing devils advocate but not in this situation. It just goes to show how badly almost everyone hates telecom companies. Also, just so no one is confused, I'm glad they got hit with a fine. I can't stand AT&T. I've been getting ~2Mbps down on my "LTE" phone at home for over half a year. Multiple complaints to AT&T just results in them telling me to use the mark the spot app.
  • Well crap. This means the price of my Cricket plan just went up since AT&T owns them. Surely nobody thinks AT&T will pay for this fine from their own coffers.
  • To everyone complaining that the fine goes to the government: Police keep all the cash they impound from drug busts and other illegal activity. They don't just "give it back to the people". They use the money to enhance the department. Same thing with traffic fines. So stop being entitled. Someone broke the law, got caught, got fined. Get over it and be glad that someone with some power has the balls to stop illicit activity
  • Stupid AT&T employees were ACTUALLY threatening me with throttled data if I didn't give up my unlimited data plan. Freakin idiots
  • I wonder how many people bought a new LTE phone, because the old (not LTE) one is "too slow" - only to find the new one is worse because they burn thru "unlimited" a lot quicker at LTE speeds and spend most of the month throttled.
  • Wasn't it that once you went over 5GB AND were in the top 5% of highest data users is when you got throttled? I believe ATT spelled this out clearly somewhere.. And I'm pretty sure they send you a text when you get close to 5GB.
  • So not surprised at all. I'm so glad I quit my job with them.
  • I've been a Cingular/ATT customer for many years and even though I never had an unlimited data plan, I'm sure I remember warnings about throttling coming out as they pulled availability for the unlimited plan and offered ample data plans + pay automatically for extra (also with warning) without throttling. We were also using far less data in 2011--it's time to move on. I suppose they could've discontinued that plan altogeter, but where to put those customers who still don't make another choice? This is like expecting to live forever in a nice, maintained, apartment with unlimited utilities and no increase in rent, ever.
  • Wow! All hail the government. Telecom in my country sucks, unlimited plans has 1GB threshold and 10GB monthly threshold for DSL subscribers. Damn!