AT&T Pays Huge Penalty For Mobile Data Slowdown


Federal officials have ruled that AT&T intentionally slowed down data speeds for customers on unlimited usage plans. They say the move was against regulations and have hit the company with a whopping $100 million fine.

The ruling comes from the Federal Communications Commission. It’s not based on the actual slowdown itself, but rather the way AT&T failed to inform customers of its policy. According to the FCC, that meant that describing its plans as “unlimited” without explaining the catches counted as misleading marketing.

Like many phone service providers, AT&T soon realized that in the 3G and 4G era, it was either unwilling or unable (or both) to offer genuinely unlimited data use for a fixed monthly fee. While it no longer offers unlimited data plans, it wanted to take action while some customers still had such contracts in place.

In 2011 it introduced a Maximum Bit Rate policy that capped speeds for unlimited data customers in some circumstances. The FCC believes that the speed slowdowns took effect in some cases when customers had used just two gigabytes during the billing month and the average customers had their speed cut for nine days each month.

It also says that affected customers had their speeds slowed by up to 90 percent and that this had a noticeable effect on some common smartphone uses such as GPS and video.

AT&T says the policy was completely legitimate and that it was purely for network management purposes. The FCC disputes that, pointing to later AT&T plans that offer as much as 100GB a month to customers who pay for premium packages.

AT&T previously tried to get the case thrown out by arguing that it was a common carrier (similar to fixed line voice call providers) and thus exempt from FCC oversight. A judge ruled that though AT&T is a common carrier when it comes to cellphone voice services, that didn’t apply to its mobile data offerings.

Although it has rejected the claims made in the FCC’s ruling, AT&T hasn’t yet announced whether it will launch a legal challenge to the $100 million fine.

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