FTC accuses AT&T of throttling ‘unlimited data’ customers

By Jim O'Neill on Oct 29 2014 at 6:15 AM
AT&T Mobility has been accused of throttling data for heavy users

The Federal Trade Commission has filed a federal court complaint against AT&T Mobility alleging the company misled millions of its smartphone customers, charging them for “unlimited” data plans but cutting data speeds by up to 90% when they crossed usage thresholds.

The data throttling made common mobile phone applications – like web browsing, GPS navigation and watching streaming video – difficult or nearly impossible 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 FTC says that when customers canceled their contracts after being throttled, AT&T charged those customers early termination fees.

According to the complaint, AT&T began throttling data speeds in 2011 for its unlimited data plan customers after they used as little as 2 gigabytes of data in a billing period. The commission said AT&T has throttled at least 3.5 million unique customers a total of more than 25 million times.

AT&T documents also showed that the company received thousands of complaints about the slow data speeds under the throttling program, with some consumers called AT&T’s throttling program a “bait and switch.” Many consumers also complained about the effect the throttling program had on their ability to use GPS navigation, watch streaming videos, listen to streaming music and browse the web.

The complaint charges that AT&T violated the FTC Act by changing the terms of customers’ unlimited data plans while those customers were still under contract, and by failing to adequately disclose the nature of the throttling program to consumers who renewed their unlimited data plans.

FTC staff worked closely on this matter with the staff of the Federal Communications Commission.

The complaint was filed in the U.S. District Court for the Northern District of California, San Francisco Division.

Earlier this month, the FTC also warned Verizon over similar practices.

You can read the lawsuit here.

Follow me on Twitter @JimONeillMedia

Posted in: 

READ THESE NEXT

LatAM, SVOD, Mobile
Latin America seeing golden age of TV in form of SVOD
Aug 22 2017 7:30 AM

Globally, subscription video on-demand (SVOD) is on a rocket trajectory and Latin America is deeply in the mix. While Netflix, Amazon and Hulu have been the leaders of subscription video on-demand growth, an increasing array of subscription services – there are more than 100 in the U.S. and Canada alone – are seeing fast subscriber growth and adoption across demographic groups.

SVOD, Mobile
Binging is big, small screens’ share rising, original content scores
Mar 23 2017 6:45 AM

Binging is big in the United States; it has been since Netflix first made it possible to watch a season of House of Cards over a long weekend, and that has made it critical for competing – or complimentary – services to assure that their own content is easily discoverable and easily accessible.

AT&T pushing 5G mobile tech to support rapid DirecTV Now expansion
Mobile, Cloud TV, Virtual MVPD
AT&T pushing 5G mobile tech to support rapid DirecTV Now expansion
Jan 05 2017 5:30 AM

Think AT&T is looking at its DirecTV Now as a complementary service to its satellite-delivered DirecTV service or wired service U-verse TV? Think again.

AT&T at CES this week previewed its 5G wireless technology, and said it would begin testing the tech this year with its DirecTV Now service as a major piece of the delivery matrix.

Report: Mobile video mainstreaming with Millennials
Research, Mobile, Millennials
Report: Mobile video mainstreaming with Millennials
Dec 15 2016 11:00 AM

More than 20% of U.S. Millennials watch at least three hours of video each week on the smartphones, with nearly 12% saying they watch more than five hours. And, according to a new report, 53% say they watch at least an hour a week.