FCC Hits AT&T with $100 Million Fine over Confusing Net Neutrality Violations

by Matt Klassen on June 18, 2015

It looks like AT&T is getting the first taste of life under Net Neutrality, as the Federal Communications Commission is reportedly slapping Ma Bell with a hefty $100 million fine over data throttling and misleading customers, the largest fine in the relatively short history of the open Internet.

The FCC is charging that AT&T is knowingly misleading customers who still exist under the company’s grand-fathered unlimited data plans— those who were lucky enough to sign onto the program before the company scuttled it in favour of more profitable tiered plans. According to the FCC, AT&T has routinely throttled the connection speeds of those unlimited data customers, without their knowledge and without justification, and subsequently “those capped speeds were much slower than the normal network speeds advertised by AT&T.”

While AT&T is undoubtedly rethinking its recent proposal to embrace Net Neutrality in exchange for regulatory approval of its pending acquisition of DirecTV—and wondering what it takes to make friends on the FCC—this is exactly the sort of unchecked violations that the FCC hopes to prevent going forward, bringing some semblance of law to an extremely lawless industry. The only problem here is, however, that we’ve known about these violations for years, meaning somewhere along the way they’ve likely been given the FCC’s stamp of approval and they’re certainly not a secret.

The charges against AT&T are simple: Customers who originally signed onto AT&T’s unlimited data plans were promised as much data as they could use, they were also allowed to keep the data plan so far as they didn’t change anything about their account. Those lucky few customers, however, are not getting access to all the data they want, at least not like Ma Bell has promised. While the charges do deal with unwarranted throttling, the most serious charge is that AT&T knowingly misled—and continues to mislead—its customers.

As a report from USA Today explains, “If customers used more than 5 gigabytes of data for the month, the carrier slowed their data transmission speeds to levels that made using mobile apps difficult or impossible, the agency said. AT&T no longer sells unlimited plans to new customers, but those who subscribed to the plans when they were still in market can continue to claim their right to use as much data as they want.”

“Consumers deserve to get what they pay for,” FCC Chairman Tom Wheeler said in a statement. “Broadband providers must be upfront and transparent about the services they provide. The FCC will not stand idly by while consumers are deceived by misleading marketing materials and insufficient disclosure.”

As expected, AT&T vehemently denies any wrongdoing, with a spokesperson explaining that the company has plans on “vigorously disputing the FCC’s assertions.” According to AT&T, the FCC had previously legitimized the practice of capping unlimited data usage at a reasonable number as warranted network management, a practice that benefits all customers.

What isn’t all that easy to ascertain here is why the FCC would pursue AT&T for misleading its customers over throttling connection speeds after we’ve known about it for the entire life of Net Neutrality. It seems from what we’re hearing in this case that the FCC has approved this sort of throttling as justified network management, meaning the only real transgression here is AT&T keeping it a secret or lying about it–telling unlimited customers they’re receiving a certain kind of service, while providing something quite different–but neither of those things are true since we’ve been reporting on this practice since at least 2011.

The only thing that I can conclude is that the FCC imposed changes on AT&T’s network management practices recently that haven’t been implemented, that or despite the fact that even we here in Canada know that AT&T’s remaining unlimited data customers are getting throttled from time to time, that those customers were somehow kept in the dark.

Did you like this post ? TheTelecomBlog.com publishes daily news, editorial, thoughts, and controversial opinion – you can subscribe by: RSS (click here), or email (click here).

Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

Previous post:

Next post: