The Federal Trade Commission is suing AT&T because the second-largest US carrier throttles speeds of its unlimited data customers, a policy that the FTC describes as "deceptive" and "unfair." In a press release, the FTC said AT&T has "misled millions of its smartphone customers" by slowing down their data speeds after they've used up a certain amount of data in a single month. AT&T has failed to make its throttling policies clear enough, according to the complaint. "The issue here is simple: ‘unlimited’ means unlimited," said FTC Chairwoman Edith Ramirez. The Commission's filing blasts AT&T for slowing customers down to the point where common tasks — watching video, streaming music, etc. — become "difficult or nearly impossible."
AT&T no longer offers unlimited data plans; the carrier began slowing down speeds for heavy data users in 2011 — and it's throttled a whole lot of people since then. 3.5 million unique customers have had speeds slowed more than 25 million times, per the FTC's numbers. AT&T has drawn thousands of complaints over the policy from consumers who feel unlimited data should continue to be free of restrictions. Those complaints have been sent to the FTC, FCC, Better Business Bureau, and AT&T itself. AT&T is by no means alone in slowing down those on unlimited plans, but clearly the FTC isn't happy with how the carrier has handled things in recent years. Today's press release says the FTC worked closely with the FCC in piecing together the complaint. In response, AT&T offered the following, strongly-worded statement:
The FTC’s allegations are baseless and have nothing to do with the substance of our network management program. It’s baffling as to why the FTC would choose to take this action against a company that, like all major wireless providers, manages its network resources to provide the best possible service to all customers, and does it in a way that is fully transparent and consistent with the law and our contracts.
We have been completely transparent with customers since the very beginning. We informed all unlimited data-plan customers via bill notices and a national press release that resulted in nearly 2,000 news stories, well before the program was implemented. In addition, this program has affected only about 3% of our customers, and before any customer is affected, they are also notified by text message.
This lawsuit could prove to be a major headache for AT&T; the FTC tends to be aggressive in seeing these battles through to some sort of settlement. The Commission is often successful in its challenges, but it's too early to know what an end result here would look like. Customers would obviously like to see AT&T reverse its decision to throttle unlimited data customers. That would put those people on equal footing with grandfathered unlimited customers at Verizon Wireless, who enjoy no restrictions on LTE data speeds. But other possibilities include AT&T paying a fine or refunding affected customers. This face-off is just getting started.
(Published by The Verge - October 28, 2014)