The Federal Trade Commission (FTC) filed a federal court complaint against US operator AT&T for charging millions of customers for unlimited data plans and then restricting speeds, sometimes by almost 90 per cent, after they had used up as little as 2GB of data in a billing period.
The FTC said that at least 3.5 million unique customers have seen “throttling”, with more than 25 million cases in total since 2011. The watchdog will seek financial damages that may mean money being repaid to customers affected by the policy.
It also said that when customers cancelled their contracts due to slow speed, AT&T charged those customers early termination fees, which could amount to hundreds of dollars.
The FTC also maintained that AT&T failed to inform customers of what it was doing, even when they renewed their contracts.
“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.”
However, AT&T has said that it has “been completely transparent with customers since the very beginning” and “informed all unlimited data-plan customers via bill notices and a national press release,” which said that it was taking steps to manage exploding demand for mobile data.
AT&T described the FTC’s allegations as “baseless”, stating that it is managing 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.
Earlier this month, Verizon Wireless dropped a similar plan to cap network speeds for 4G users at busy times, after it ran into strong resistance from communications regulator FCC.