AT&T hit with US$100 mil­lion fine over data, vows to fight


AT&T Mo­bil­ity LLC has been slapped with a record US$100 mil­lion fine for of­fer­ing con­sumers “un­lim­ited” data, but then slow­ing their In­ter­net speeds af­ter they reached a cer­tain amount. The com­pany says it will fight the charges.

The Fed­eral Com­mu­ni­ca­tions Com­mis­sion 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 once the con­sumer hit a cer­tain level, the data on un­lim­ited plans would be slowed down sig­nif­i­cantly, at speeds lower than ad­ver­tised, the FCC said.

AT&T said it would “vig­or­ously dis­pute” the fine, which was the largest pro­posed in FCC history. If AT&T can pro­vide ev­i­dence that the FCC al­le­ga­tions are wrong, the fine could be re­duced. Oth­er­wise, if AT&T re­fuses to pay, it’s pos­si­ble the two sides will wind up in court.

It’s not un­usual for phone com­pa­nies to slow, or “throt­tle,” speeds on a net­work as a way to man­age con­ges­tion. Ver­i­zon slows down speeds for its heav­i­est users, but only on cer­tain smart­phones when there is con­ges­tion. Once the bot­tle­neck eases, speeds re­turn to nor­mal.

Un­til this spring, AT&T was slow­ing speeds un­til the cus­tomer’s next billing cy­cle, even when there was no con­ges­tion.

Both Ver­i­zon and AT&T had phased out their un­lim­ited plans af­ter data us­age grew fol­low­ing the iPhone’s launch in 2007. Ex­ist­ing cus­tomers, how­ever, were able to keep their un­lim­ited plans.

The FCC says AT&T’s ap­proach to un­lim­ited plans vi­o­lated the agency’s trans­parency rule.

The hefty fine by the FCC comes on the heels of a fed­eral law­suit filed against the com­pany last fall. The Fed­eral Trade Com­mis­sion, 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 in Cal­i­for­nia.

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