The Low-Down: When Unlimited Isn't: Why ATT Cheated Customers With Unlimited Phone Data Plans

AT&T, the mammoth US telecom, is really unhappy.

First, the government announced that net neutrality was the prevailing law of the land, meaning that internet service providers could not just raise rates whenever they felt like it. But if that weren't enough, it ruled that the internet is a public utility (just like phones used to be!) and subject to various laws and regulations that prevent unbridled increases in costs to consumers. Oh, and which also means that its executives can not be treated - or paid like - all those fancy tech execs to whose status they aspire.

So, still pouting about this gravest of insults to their reputation and pocket books, AT&T decided they would impose their own reversion of net neutrality by secretly slowing data speeds for customers who thought they had purchased unlimited data plans. Perhaps you, yourself, noticed that downloads were moving a tad glacially. Enough customers complained so that the government was compelled to investigate, AT&T was caught and fined $100 million. This on top of the $25 million fine AT&T incurred a couple of months ago for violating customers' privacy.

Now, AT&T shows no signs of behaving any more obediently than they ever have (even before they were broken up the first time) and $125 million is a rounding error to the company (its CEO alone made $24 million in 2014). But as they are fond of saying in Washington, 'a million here and million there, and pretty soon you're talking about real money.' JL

Jacob Kastrenakes reports in The Verge:

"Unlimited means unlimited."
The FCC is fining AT&T $100 million for misleading customers about its unlimited data plan, which was previously throttled to extremely slow speeds after a certain amount of data usage. The commission is charging AT&T with falsely labeling its plans as "unlimited" and not properly informing customers that their speeds would be slowed after it implemented throttling in 2011. "Unlimited means unlimited," Travis LeBlanc, chief of the FCC Enforcement Bureau, says in a statement. "As today’s action demonstrates, the commission is committed to holding accountable those broadband providers who fail to be fully transparent about data limits."

The FCC says affected customers were throttled around 12 days per cycle
The commission says that it's received thousands of complaints from consumers since AT&T's policy went into effect in 2011. As part of an investigation into AT&T's throttling, the FCC says that it found millions of people were affected, with affected subscribers on average receiving throttled service for 12 days per billing cycle. Though AT&T did make note of its changing policy at the time, the commission says that it was not adequate to fulfill the transparency requirements laid out in the old Open Internet Order, which mandates that carriers provide sufficient information so that subscribers can make informed decisions about their service.
The fine is not final, as the FCC has only charged AT&T with violating the requirements so far. It's possible that the company will eventually settle, which seems to be how FCC fines take their course. However, AT&T says that it "will vigorously dispute the FCC’s assertions." It argues that the commission has "identified this practice as a legitimate and reasonable way to manage network resources," although that's sort of ignoring what the FCC is actually saying. The commission isn't taking issue with AT&T's throttling for the purpose of "reasonable network management," it's taking issue with AT&T throttling customers indiscriminately because they've used a lot of data.
Notably, while this fine isn't particularly huge for AT&T, it is the largest proposed fine in FCC history and the commission is attempting to put it forward as an initial threat. A senior FCC official says that any future fine over this issue would be large enough to not be viewed as a "mere cost of doing business" for AT&T, which has apparently made billions on its unlimited plans. As part of this initial fine, the FCC also wants AT&T to inform customers that it did not properly detail its policy and explain to them the current situation. Simultaneously, AT&T is also facing a lawsuit from the Federal Trade Commission over this same issue, which it still has to deal with.