The Federal Communications Commission plans to fine AT&T $100 million for misleading customers by throttling speeds on the lines of millions of customers who had "unlimited" data plans.
The FCC alleges that AT&T did not adequately disclose to its customers on "unlimited" data plans that their speed would slow drastically after they had reached a monthly data allowance of 5GBs. The policy began in 2011.
Data speeds were significantly slowed to 512kbps from the advertised 5Mbps to 12Mbps under something AT&T called its maximum bit rate policy. That very name is clearly at odds with an unlimited plan, a senior FCC official told reporters on a conference call.
By not clearly informing consumers of this policy, AT&T was in violation of the Open Internet Transparency Rule of 2010, which requires Internet providers offer clear and accurate information to consumers so they can make informed choices on Internet service, the FCC said.
The fine is the largest proposed by the FCC in its history, but it's not a done deal yet. AT&T has 30 days to respond in writing to the FCC's charges after, which the commission will adjudicate the complaint and determine a final fine.
The FCC said it's aware that the fine, while large, is a fraction of the revenue AT&T made from offering its unlimited plan to consumers. It is also considering other redress, including requiring AT&T to individually inform customers that its disclosures were in violation of rules and to allow them out of applicable contracts with no penalty.
Martyn Williams covers mobile telecoms, Silicon Valley and general technology breaking news for The IDG News Service. Follow Martyn on Twitter at @martyn_williams. Martyn's e-mail address is firstname.lastname@example.org