ATT Forced To Pay Fine For Lying About Unlimited Data Plans That Had Unadvertised Limits

The larger problem for is that this confirms growing popular  suspicions that they are being ripped off  by the tech industry across the board, which will add to demand for regulation. JL


Rachel Sandler reports in Forbes:

AT&T agreed to pay $60 million to settle litigation from the Federal Trade Commission alleging  the company lied about the terms of its unlimited data plan by slowing down speeds after customers surpassed an arbitrary data cap. AT&T started to slow down speeds for unlimited plan customers after they used a certain amount of data in a given billing cycle, making Web browsing or video streaming apps unstable. “AT&T promised unlimited data—without qualification—and failed to deliver on that promise. Internet providers must tell people about any restrictions on the speed or amount of data promised.”

Topline: AT&T agreed to pay $60 million to settle litigation from the Federal Trade Commission alleging that the company lied about the terms of its unlimited data plan by slowing down speeds after customers surpassed an arbitrary data cap. 

• The FTC alleged that AT&T started to throttle, or slow down, speeds for unlimited plan customers after they used a certain amount of data in a given billing cycle, making Web browsing or video streaming apps unstable. 
• Sometimes AT&T would start slowing down speeds after customers used as little as 2 gigabytes of data, which typically allows users to browse the internet for about 24 hours.
• From 2011 to October 2014—when the original FTC complaint was filed—the practice affected more than 3.5 million customers, according to the FTC. 
• The $60 million settlement will be used to provide partial refunds to current and former customers who signed up for unlimited plans prior to 2011 but were throttled by AT&T. 
• AT&T is also restricted from making any claims about its unlimited plan without prominently disclosing that it may slow down speeds.
• An AT&T spokesperson said, “Even though it has been years since we applied this network management tool in the way described by the FTC, we believe this is in the best interests of consumers.”

Crucial quote: “AT&T promised unlimited data—without qualification—and failed to deliver on that promise,” said Andrew Smith, director of the FTC’s Bureau of Consumer Protection. “While it seems obvious, it bears repeating that Internet providers must tell people about any restrictions on the speed or amount of data promised.”

Key background: While the FTC’s rollback of net neutrality rules has prompted concerns that companies like AT&T could throttle speeds, what the FTC accused AT&T of didn’t technically violate the principles of net neutrality. If AT&T had throttled data for particular apps or websites, that would have run afoul of net neutrality.
Tangent: AT&T’s management has been inundated with criticism over the past month from activist hedge fund Elliot Management. The fund, which has a $3.2 billion stake in AT&T, accused the company of having a jumbled management structure and for making a mistake in acquiring of DirecTV. In response to the fund’s demands around cost cutting and restructuring, AT&T said last week it would add new board members and divest up to $10 billion of assets in 2020 in order to reduce its large debt pile.