The Federal Trade Commission is calling out AT&T for slowing the data speeds of their ‘unlimited data plan’ customers, in some cases by nearly 90 percent. So it wasn’t your imagination or Mercury being in retrograde.
On Tuesday, the commission filed a complaint in federal court alleging that AT&T did not adequately notify its customers that they would “throttle” or slow down their data speeds if they use too much data in a given cycle. This practice made common functions like web surfing, GPS, and video streaming nearly impossible for customers to use.
“AT&T promised its customers ‘unlimited’ data, and in many instances, it has failed to deliver on that promise,” said FTC Chairwoman Edith Ramirez. “The issue here is simple: ‘Unlimited’ means unlimited.”
The nation’s second largest wireless carrier stopped offering its unlimited data plan in June 2010, but allowed users who already had the service to keep it.
“Throttling” is not an uncommon practice. Wireless companies use it as a form of checks and balances to ensure that all customers get optimal service. Unlimited data users can clog networks, causing the quality of service to decline for other customers, according to Roger Entner, a telecom analyst from Recon Analytics. He says that companies like AT&T need to throttle these superusers as “basically, a network-management tool, because wireless capacity is not unlimited.”
However, the FTC insists that the rate at which AT&T used throttling was excessive. According to their findings, AT&T began throttling data speeds in 2011 for unlimited data customers after they used as little as 2 gigabytes of data in a billing period. Overall, AT&T has throttled at least 3.5 million unique customers a total of more than 25 million times, the agency says. “We believe AT&T made the determination that the continuation of unlimited data plans would be too costly for them to sustain,” said Ramirez.
AT&T disagrees with these claims, of course, and counters that they were transparent about their practices. “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,” said Wayne Watts, AT&T general counsel and senior executive vice president.
The Federal Communications Commission has been warning companies about throttling recently. This summer, FCC Chairman Tom Wheeler sent letters to all major carriers about this issue.
In a separate FCC-FTC matter, AT&T agreed to pay $105 million to federal and state authorities over charges that they had unauthorized charges for third-party services on customers’ phone bills.
[Source: USA Today]