FTC sues AT&T, saying customers misled over unlimited data plans

29 Oct 2014 | Author: | No comments yet »

‘Unlimited means unlimited’: FTC sues AT&T for slowing customers’ connections.

WASHINGTON — AT&T is being sued by the government over allegations that it misled millions of smartphone customers who were promised unlimited data but had their Internet speeds cut by the company — slowing their ability to open web pages or watch streaming video. WASHINGTON — Three years ago, AT&T warned smartphone customers with “unlimited” data plans that their connections might be slowed if they used a lot of data. The Federal Trade Commission filed its complaint Tuesday against AT&T Mobility Inc., charging that the telecom company failed to adequately disclose to customers that it would reduce data speeds if they went over a certain amount of data use in a billing cycle.

AT&T stopped offering unlimited plans in 2010, but according to the FTC complaint, the company started throttling customers who held onto unlimited plans in 2011, reducing the overall data speeds by as much as 90 percent when those customers’ data usage exceeded a cap set by AT&T. The commission filed a federal lawsuit against AT&T on Tuesday, saying the company had misled customers by slowing the connections of people with unlimited plans after they used more than two gigabytes of data in a month. Federal Communications Commission Chairman Tom Wheeler in July said he was “deeply troubled” by Verizon’s plan to slow speeds from some heavy Internet users. In fact, AT&T issued a statement calling the FTC’s claims “baseless,” adding, “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.” AT&T also argues that it notified all customers of the practice in 2011, noting that it issued a press release at the time. (Read our March 2012 article on AT&T and throttling.) Find the best cell phone plan for your family and check our buying guide and reviews of wireless providers. Some customers, the agency said, had data speeds slowed by nearly 90 percent. “If you make a promise about unlimited service, we expect you to fulfill those promises,” FTC Chairwoman Edith Ramirez said as she announced the lawsuit. “We have been completely transparent with customers since the very beginning,” Wayne Watts, senior executive vice president and general counsel for Dallas-based AT&T, said in a statement. “We informed all unlimited data-plan customers via bill notices and a national press release that resulted in nearly 2,000 news stories, well before the program was implemented.” In a July 2011 news release, AT&T said demand for mobile data has exploded.

Since 2011, when AT&T put the controls into place, data speeds have been reduced for more than 3.5 million of its customers on more than 25 million occasions, the F.T.C. said. AT&T agreed earlier this month to pay $105 million to settle claims by the FTC, the FCC and state officials over allegations of mobile “cramming” — that is, unlawfully billing customers for charges originated by other companies for services such as horoscopes and ring tones.

AT&T responded that it slows some customers’ connection speeds — a practice known in the industry as “throttling” — in order to make sure that its network is usable for as many customers as possible. Network bandwidth is finite, after all, and sometimes there are so many people trying to get online at once in a certain area that AT&T’s network becomes congested. Consumers Union has long opposed throttling of all data plans by both cellular providers and residential Internet service providers. “Consumers have been complaining about throttling for years. Maurice Turner of Anaheim, Calif., complained about a half-dozen times when he started noticing sharply slower speeds loading Google searches or GPS maps. The FTC alleged in its complaint that AT&T “throttled” at least 3.5 million customers a total 25 million times, even when its network had capacity to carry their data.

The commission added that AT&T didn’t mention its throttling practices even when customers renewed their plans, and complained that those users who choose to cancel their plans as a result of slow data speeds are hit with early termination fees to the tune of hundreds of dollars. But in its lawsuit, filed in Federal District Court in San Francisco, the F.T.C. contends that AT&T set specific thresholds, initially 2 gigabytes in dense cities like San Francisco and New York, and, beginning in 2012, 3 gigabytes for customers using its 3G network and 5 gigabytes for 4G customers.

Here you can write a commentary on the recording "FTC sues AT&T, saying customers misled over unlimited data plans".

* Required fields
All the reviews are moderated.
Our partners
Follow us
Contact us
Our contacts


ICQ: 423360519

About this site