AT&T has agreed to pay $60 million in a settlement involving secretly throttled unlimited plans in 2011, the Federal Trade Commission announced Tuesday. You might assume the fine has something to do with the broadband industry’s liberal use of the word “unlimited,” given that AT&T slowed connections to a crawl once customers had used a certain amount of data. Unfortunately, you’d be wrong.
Back in 2010, AT&T stopped offering “unlimited” data plans to new customers and offered a choice of 200MB for $15 per month or 2GB for $25 per month. Those who had previously signed up for unlimited data could keep their old plans. But in 2011 the company started throttling the connections of those customers with grandfathered unlimited plans if they exceeded as little as 2GB—and never actually told those people what was happening, according to the FTC.
The agency filed a suit against AT&T in 2014, leading to a messy court battle in which the company claimed that its status as a “common carrier” meant that only the Federal Communications Commission could regulate it. Five years later, AT&T has agreed to pay the fine and move on. But the settlement itself won’t change much, if anything, about how AT&T and other telecom firms handle “unlimited” data today.
AT&T currently advertises three “unlimited” plans on its website: “Unlimited Starter,” “Unlimited Extra,” and “Unlimited & More Premium.” The catch is that the cheaper plans will slow down your video streams to limit video quality to roughly the DVD equivalent. If you want to stream in high definition, you’ll need to shell out for the “Unlimited & More Premium” option. But even this plan cautions that if you use more than 22GB of data, AT&T might slow your entire connection when the network is busy. Verizon, T-Mobile, and Sprint all offer a similar mix of “unlimited” plans that all come with strings attached—as California firefighters learned the hard way last year.
Unless you’re an emergency worker on a special first-responder plan, there’s no such thing as truly unlimited mobile data. Heck, even home internet services from Comcast and AT&T will ding you for going over your allotment.
But as distasteful as the practice of throttling customers with unlimited plans might sound, AT&T got in trouble for failing to disclose it, rather than for doing it in the first place.
“As part of the settlement, AT&T is prohibited from making any representation about the speed or amount of its mobile data, including that it is ‘unlimited,’ without disclosing any material restrictions on the speed or amount of data,” the FTC said. “The disclosures need to be prominent, not buried in fine print or hidden behind hyperlinks.”
That’s more or less what AT&T has been doing since it started offering “unlimited” data plans again in 2017. A cached version of the company’s website from July 2017 mentions three times that the company “may slow speeds” on its unlimited plans. Today, the disclosures can be seen just below the prices of each of its unlimited plans. Other carriers are more subtle about their disclosures. Verizon, for example, discloses the limits in footnotes on a page that explains its plans. You can argue about what might count as “buried,” but the disclosures are there if you look hard enough.
AT&T did not respond to WIRED’s questions about whether the settlement will change the way it advertises its plans in the future. But the company reported that it’s happy with the settlement. “Even though it has been years since we applied this network management tool in the way described by the FTC, we believe this is in the best interests of consumers,” AT&T said in a statement.
The FCC’s Obama-era net neutrality rules didn’t ban carriers from imposing data limits, but they did give the agency the option to decide on a case-by-case basis whether companies were using data limits for unfair purposes. Regardless, the now Republican-controlled FCC voted to jettison those rules in 2017, ceding most broadband carrier oversight to the FTC. It’s possible that throttling video streams violates the net neutrality laws passed by California and Washington last year, depending on how courts interpret exceptions for “reasonable network management” practices. But neither state has yet pursued a case against the carriers.
As for that $60 million, the money will go into a fund that will go toward partial refunds for customers. If you were one of the 3.5 million people the FTC says was affected by AT&T’s undisclosed throttling, you can expect either a credit on your next bill if you’re still an AT&T customer, or a check in the mail if you’re not. And unlike other recent settlements of note, you don’t have to fill out a single form to get paid.
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