AT&T Braces for $100 Million Fine Over 'Unlimited' Data Plans

AT&T Braces for $100 Million Fine Over 'Unlimited' Data Plans
Image credit: zombieite | Flickr

AT&T will be slapped with a $100 million courtesy of the Federal Communications Commission over allegations that it failed to inform customers that their “unlimited” data plans would be slowed if they exceeded a certain amount of data within a billing cycle.

"Unlimited means unlimited," Travis LeBlanc, chief of the FCC Enforcement Bureau, said in a news release. "As today’s action demonstrates, the commission is committed to holding accountable those broadband providers who fail to be fully transparent about data limits."

While AT&T no longer offers unlimited data policies, it allows existing customers with unlimited plans to renew them. However, in 2011 the telecommunications corporation implemented a throttling policy that slowed data speeds on “unlimited” plans after customers exceeded a data cap.

Related: T-Mobile Accused of Billing Customers for 'Bogus Charges'

While AT&T noted the policy change in 2011, the FCC alleges that its impact – i.e. capped speeds were significantly slower than normal network speeds – was not sufficiently conveyed to customers and thus violated the 2010 Open Internet Transparency Rule. “Consumers deserve to get what they pay for,” said FCC chairman Tom Wheeler. “Broadband providers must be upfront and transparent about the services they provide.”

In response, AT&T said it had given sufficient notice to customers when it capped data speeds in 2011 and that it will “vigorously dispute” the fine. “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.

Since 2011, the FCC said millions of AT&T customers have been affected, and that it has received “thousands of complaints from AT&T’s unlimited data plan customers stating that they were surprised and felt misled by AT&T’s policy of intentionally reducing their speeds.”

Related: FTC Sues AT&T for 'Deceptive' Data Throttling