FCC Fines AT&T For A Disappointing Reason

After investigating complaints by thousands of customers over a period of several years, on Wednesday the FCC fined AT&T $100 million for allegedly throttling Internet speeds on "unlimited" data plans, The Washington Post reported, and it's the largest fine the FCC has ever imposed. The agency claims AT&T slowed down Internet speeds for millions of customers who thought they were getting unlimited data to as slow as 5 percent of average speed, for an average of 12 days per month. The FCC investigation found that the slowdowns occurred after customers had used a certain amount of data, and that AT&T throttled the speeds without disclosing to customers what it was doing. A spokesman for AT&T told The New York Times that the company will "vigorously dispute" the FCC charges.

The AT&T spokesman said the agency has approved of the practice of regulating data use in the past. "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," Michael Balmoris told the Times.

But the FCC maintained that AT&T's practice went against the 2010 Internet Transparency Rule, which requires providers to keep customers adequately informed about their plans and practices. "Consumers deserve to get what they pay for. Broadband providers must be upfront and transparent about the services they provide," FCC Chairman Tom Wheeler said in a statement.

AT&T used to offer unlimited data plans to all its customers. While it no longer offers those plans to new customers, the company allowed existing customers to renew their unlimited plans. Wednesday's action by the FCC is not the first time that AT&T has been called out by a government agency for allegedly not being transparent with customers about what exactly "unlimited" means. The Federal Trade Commission filed a lawsuit against the company last year, which says AT&T slowed unlimited plans by as much as 95 percent, and had misled customers about the practice, The Times reported in October. AT&T countered that customers had been well-informed about the data limit thresholds, and that the FTC's claims were "baseless." That case is still pending.

Regardless of the outcome of the FCC accusations, one thing appears clear: The Post reports that even if the $100 million fine is lowered, it's unlikely any of the affected customers will receive any monetary reimbursement. Instead, an FCC official told the Post, any fine collected would go to the U.S. Treasury.

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