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Federal Trade Commission Suing AT&T Over Unfair Speed Throttles for Unlimited Data Customers

throttleThe Federal Trade Commission today filed a lawsuit against AT&T for its practice of subjecting grandfathered unlimited data customers to speed throttles that dramatically cut speeds up to 90 percent after customers use more than 3GB of data on AT&T’s 3G network or 5GB on its 4G network. Thus far, according to the FTC, AT&T has throttled at least 3.5 million unique customers a total of more than 25 million times.

The FTC’s complaint alleges that the company failed to adequately disclose to its customers on unlimited data plans that, if they reach a certain amount of data use in a given billing cycle, AT&T reduces – or “throttles” – their data speeds to the point that many common mobile phone applications – like web browsing, GPS navigation and watching streaming video –  become difficult or nearly impossible to use.

“AT&T promised its customers ‘unlimited’ data, and in many instances, it has failed to deliver on that promise,” said FTC Chairwoman Edith Ramirez. “The issue here is simple: ‘unlimited’ means unlimited.”

FCC chairman Thomas Wheeler publicly complained about Verizon’s plans to start a similar throttling program on its wireless network, questioning the fairness of cutting speeds for certain customers while exempting others. Both Verizon and AT&T have claimed speed throttles are part of a fair usage policy that allows all customers to share its wireless resources. Broadband providers have often painted a picture of a “bandwidth hog” taking a disproportionate share of network resources away from other customers, but there is no evidence heavier users are creating conflicts for other users, especially as wireless carriers encourage customers to use more data.

throttle att

From AT&Ts website

The logic of rationing Internet use for unlimited customers while providing unlimited access to those willing to pay usage-based charges escaped the FTC, which is what brought the suit.

According to the FTC’s complaint, AT&T’s marketing materials emphasized the “unlimited” amount of data that would be available to consumers who signed up for its unlimited plans. The complaint alleges that, even as unlimited plan consumers renewed their contracts, the company still failed to inform them of the throttling program. When customers canceled their contracts after being throttled, AT&T charged those customers early termination fees, which typically amount to hundreds of dollars.

The FTC alleges that AT&T, despite its unequivocal promises of unlimited data, began throttling data speeds in 2011 for its unlimited data plan customers after they used as little as 2 gigabytes of data in a billing period. According to the complaint, the throttling program has been severe, often resulting in speed reductions of 80 to 90 percent for affected users.

According to the FTC’s complaint, consumers in AT&T focus groups strongly objected to the idea of a throttling program and felt “unlimited should mean unlimited.” AT&T documents also showed that the company received thousands of complaints about the slow data speeds under the throttling program. Some consumers quoted the definition of the word “unlimited,” while others called AT&T’s throttling program a “bait and switch.” Many consumers also complained about the effect the throttling program had on their ability to use GPS navigation, watch streaming videos, listen to streaming music and browse the web.

The complaint charges that AT&T violated the FTC Act by changing the terms of customers’ unlimited data plans while those customers were still under contract, and by failing to adequately disclose the nature of the throttling program to consumers who renewed their unlimited data plans.

FTC staff worked closely on this matter with the staff of the Federal Communications Commission.

The Commission vote authorizing the staff to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the Northern District of California, San Francisco Division.

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C
C
9 years ago

It’s about time they do something about this problem. I’ve been an AT&T customer for 10yrs and this month was the first time I went over the 5gb and they throttle me down, went from 20mb down load speeds to .34mb

Mike
Mike
9 years ago
Reply to  C

Me too… Been with them for 10 yrs. Never over 5gb… This month my phone was not doing anything (as far as videos goes) so I called ATT and spoke ot 3 people over a 2 hr period and finally the last lady told me it was because I have exceeded the 5gb this month so I was throttled down… I told her i understood if I was slowed down a litle, but I went from 40 mbps to .55 mbps… Making the phone virtually useless. Hopefully this class action lawsuit helps. Its a scam. Told her i was going… Read more »

AC
AC
9 years ago

I have this distinct feeling that nothing will change since they pretty much never lift a finger and the revolving door bureaucracy will keep milking their sacred cow with laziness and fraud ruling the roost. I’d love to see an audit on where the billions that supposedly went to the promised FTTH went to. In some aspects FTTB would actually be nicer to the customers than the FTTPR that selected groups have received lately. I find it interesting that countries such as Russia are putting more effort into running FTTB and most likely have surpassed the US in this aspect.

d0764
d0764
9 years ago

If they go after ATT for this then I sure as hell expect them to go after straight talk which does the same thing. Hell straight talk is very corrupt with false advertising of unlimted plans. They throttle right after 3gbs. That’s not unlimted its a capped plan if there are any restrictions on it. Unlimited means without limit and any company that advertises unlimited plans needs to get this point. Thee can be no restrictions what so ever. I’m really sick and tired of corporations and corrupt politicians In the US thinking they can twist the system to increase… Read more »

Wendy
Wendy
9 years ago

Im thinking to sue att I had unlimited data and they made a mistake and removed it from my plan I was told I can’t get it back that was a lie they do have the power to do that their policy is custumers with unlimited data get to keep it, I ended up crying becouse the custumer service treat me so badly and also told me if I’m not happy I can cancel my contract, time when by and I was paying over 50 more on data per month for about a year and I call to complain cuz… Read more »

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