AT&T fac­ing $100-mil­lion fine from FCC

Los Angeles Times - - BUSINESS - By Daina Beth Solomon daina.solomon@latimes.com Twit­ter: @dain­a­bethcita

Wire­less car­rier AT&T Inc. could be forced to pay $100 mil­lion af­ter the Fed­eral Com­mu­ni­ca­tions Com­mis­sion found that the com­pany had slowed data net­works for “un­lim­ited” plan hold­ers with­out in­form­ing them, the agency said Wed­nes­day.

Since 2011, thou­sands of cus­tomers had com­plained to the FCC that AT&T had dras­ti­cally re­duced their net­work speeds, pre­vent­ing them from us­ing ba­sic func­tions such as GPS map­ping and video stream­ing af­ter they had used a cer­tain amount of data.

“Con­sumers de­serve to get what they pay for,” FCC Chair­man Tom Wheeler said in a state­ment. “The FCC will not stand idly by while con­sumers are de­ceived by mis­lead­ing mar­ket­ing ma­te­ri­als and in­suf­fi­cient dis­clo­sure.”

The pro­posed fine would be the largest in FCC history, FCC spokesman Neil Grace said. The agency based it on es­ti­mates that AT&T had earned bil­lions from lock­ing con­sumers into plans falsely ad­ver­tised as “un­lim­ited.”

AT&T de­fended its prac­tices, say­ing the FCC had ap­proved them as “le­git­i­mate” and said it would “vig­or­ously dis­pute” the find­ings.

“We have been fully trans­par­ent with our cus­tomers, pro­vid­ing no­tice in mul­ti­ple ways and go­ing well be­yond the FCC’s dis­clo­sure re­quire­ments,” the com­pany said in a state­ment.

“We have been fully trans­par­ent with our cus­tomers, pro­vid­ing no­tice in mul­ti­ple ways and go­ing well be­yond the FCC’s dis­clo­sure re­quire­ments,” the com­pany said in a state­ment.

The FCC said mil­lions of AT&T un­lim­ited cus­tomers felt lags on their mo­bile sys­tems for an av­er­age of 12 days dur­ing each billing cy­cle.

By advertising those plans as “un­lim­ited” with­out in­form­ing users of pos­si­ble net­work de­lays, AT&T vi­o­lated the 2010 Open In­ter­net Trans­parency Rule, which was up­held by a fed­eral court in Jan­uary, the FCC said. The agency has not cited AT&T for vi­o­lat­ing net neutrality rules that went into ef­fect last week that pro­hibit In­ter­net providers from block­ing traf­fic or slow­ing down net­works, called “throt­tling.”

The FCC’s de­ci­sion was not unan­i­mous among the five com­mis­sion­ers.

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