"Unlimited" Data Throttling Policy to Change Following $100 Million Fine to AT&T

"Unlimited" Data Throttling Policy to Change Following $100 Million Fine to AT&T

Posted By Golomb & Honik, P.C. || 20-Oct-2015

Just a few months back, the FCC fined AT & T $100 million for misleading customers regarding “unlimited” data plans. As a result, AT&T has now quietly made changes to its “throttling” policies. Throttling entails intentionally slowing down data-hungry users. The issue is how that slowing process is accomplished and whether consumers are misled about the process. Throttling takes place when data is slowed for the heaviest 3G or 4G users when they hit overburdened cell sites. Not all users are targeted—only those with unlimited plans. In 2010, AT&T was the first cellular company to phase out unlimited data plans for new users. Those plans were replaced with tiered plans which capped use—and charged substantially for overages. Verizon followed suit in 2011.

Existing subscribers, however, were grudgingly allowed to keep their unlimited plans. This doesn’t mean the carriers made it easy. AT&T cut off the heaviest 3G and 4G unlimited plan users whenever they exceeded 3GB or 5GB per month. In short, those with “unlimited” plans, who actually dared use them, were punished. It’s akin to advertising an all-you-can eat buffet, then asking a customer to leave the restaurant after he eats one too many shrimp.

Customers Misled by Insufficient Disclosure Policies

During the summer, when AT&T was forced to pay the $100 million fine, FCC chairman Tom Wheeler stated too many consumers were being duped by misleading marketing and insufficient disclosure. The recent changes to throttling policies by AT&T for those with unlimited plans may take away at least a little of the sting felt by many cell phone users. AT&T is now allowing the throttling threshold to reach 22GB rather than the former 3GB and 5GB for those with unlimited plans. This applies only to those who are grandfathered in with an unlimited plan, as AT&T currently offers no unlimited wireless plans for new users.

T-Mobile Claims to Put Customers First

In July 2015, T-Mobile announced its own throttling policies are permitted under the FCC’s net neutrality rules. T-Mobile throttles customers on unlimited plans once those customers hit 21GB of data usage, claiming the company loves “anything that puts consumers first.” T-Mobile also updated its disclosures regarding throttling practices, informing unlimited 4G LTE customers up front that should they exceed 21GB of data in any billing cycle, they will have their data usage de-prioritized, resulting in slower speeds. T-Mobile notes while this is not a change in policy, the disclosures have been updated so customers are better informed.

FCC Net Neutrality Rules

The FCC rules state a network management practice will be deemed reasonable if it is aimed at “achieving a legitimate network management purpose,” rather than for “business practices.” The FCC claims, however, they do not allow carriers to engage in practices which permit different levels of network access for “similarly situated users,” based only on the subscriber’s plan. It is this rule which led to the fine levied on AT&T just months ago.

AT&T now says it will not only raise its throttling threshold to 22GB, it will notify customers when their usage reaches 75 percent of the new limit, or 16.5 gigabytes. This will help customers adjust and avoid throttling, although those on unlimited data plans will continue to pay a monthly flat rate no matter how much data is used. AT&T continues to refute the allegations which led to the fine—that the company failed to adequately notify customers their speeds would be throttled at a specific limit. According to an AT&T spokesperson, the company has “been transparent all along.”

Categories: Consumer Protection
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