Federal Trade Commission Suing AT&T

Posted by Steph Kaye on Wednesday, October 29th, 2014 at 5:18pm.

Restitution for Data Throttling

The Federal Trade Commission filed a federal court complaint against AT&T Mobility, LLC, charging the company for misleading millions of its smartphone customers by charging them for “unlimited” data plans and then reducing their data speeds, in some cases by nearly 90%. The Federal Trade Commission is is seeking millions of dollars in reimbursements for customers who were promised unlimited data plans by AT&T, then have their mobile network speeds slowed in a practice known as data throttling.

The federal complaint filed in San Francisco, in October of 2011, AT&T began reducing speeds for customers who went above amount of monthly data usage, determined by AT&T. Customers could see their network speeds decrease for the rest of the billing cycle, even though there was actually not any congestion on the network at the time.

 “The company has misled millions of its mobile customers … with so-called unlimited data plans that were in reality not unlimited at all,” FTC Chairwoman Edith Ramirez told reporters. Ramirez said data throttling cut speeds for unlimited data customers by 90% or more, often making Web browsing or GPS navigation “significantly slower or practically inoperable.” “We think that millions of customers have been affected, and we hope to put money back in their pockets,” Ramirez said.

In its complaint, the FTC alleges that AT&T began slowing speeds for its unlimited data plan in 2011, and that the company received a excessive amount of customer complaints accusing AT&T of “failing to live up to its end of their bargain because its throttling program imposes a limitation on their unlimited data plan."

 The complaint goes on to declare that customers’ download speeds are "capped" even when they’re using their smartphones at a time when the network has “ample” capacity to carry the data traffic. According to Evan Rose, a lead FTC attorney on the case, AT&T had approximately 14 million unlimited data customers when it began the practice in 2011. Since then, Rose said, about 3.5 million users, have had their data connections throttled by AT&T at some point, which has allegedly used the practice at least 25 million times, according to the FTC.

AT&T is still using the practice today.

“The FTC’s allegations are baseless and have nothing to do with the substance of our network management program. 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," the company said.

Public Knowledge, a consumer group, sent letters to four major providers, including AT&T, in August saying that the companies aren't clear about when throttling will kick in. Verizon Wireless, Sprint and AT&T should also publish information about congestion on their networks because that's why carriers say they throttle customers with unlimited data, according to Public Knowledge.

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