AT&T Mobility LLC has been hit with a $100 million fine for offering
consumers "unlimited" data, but then slowing their Internet speeds after
they hit a certain amount.
The Federal Communications Commission (FCC) said Wednesday that the
company misled consumers into buying plans they believed would give them
unlimited ability to send and receive data, including Web browsing, GPS
navigation and streaming videos. But the FCC said that once the consumer
reached a certain level, that data would be slowed down significantly, at
speeds lower than advertised.
AT&T said it would "vigorously dispute" the fine, which is the largest
proposed in FCC history.
"The FCC has specifically identified this practice as a legitimate and
reasonable way to manage network resources for the benefit of all
customers, and has known for years that all of the major carriers use it,"
the company said in a statement released to reporters. "We have been fully
transparent with our customers, providing notice in multiple ways and
going well beyond the FCC's disclosure requirements."
If AT&T can provide evidence that the FCC allegations are wrong, the fine
could be reduced. But FCC officials said they were sure that AT&T was
profiting off the deceptive advertising.
“Consumers deserve to get what they pay for,” said FCC Chairman Tom
Wheeler. “Broadband providers must be upfront and transparent about the
services they provide. The FCC will not stand idly by while consumers are
deceived by misleading marketing materials and insufficient disclosure.”
The hefty fine by the FCC comes on the heels of a federal lawsuit filed
against the company last fall. The FCC, which enforces rules against
deceptive advertising, said it wants to refund customers who were offered
the unlimited data packages, only to be given slower data speeds than
advertised. That lawsuit is still working its way through a federal court
Earlier this year, the Federal Trade Commission accused TracFone Wireless
of similar tactics. TracFone agreed to settle the case for $40 million.
Al Jazeera and The Associated Press
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