FCC fines AT&T $100M for throttling "unlimited" customers

The company advertised an "unlimited data" plan on its 5-12Mbps LTE network, but customers who hit a cap were throttled to 1/60th of that.

This is common practice in the UK, where every "unlimited" plan I've investigated is subject to undefined "fair usage" limits.

The fines — which AT&T will fight — will go to the FCC, not the affected customers. They're the largest-ever fines for a violation of this sort, and are the second punishment that the Commission has meted out to AT&T over misleading "unlimited data" offers in the past year.

The FCC's action comes at a sensitive time for AT&T, which is presently in a bid to win regulatory approval to take over Directv.

AT&T implemented the practice in 2011, prompting thousands of customers to complain to the FCC, according to an agency statement.

By not properly disclosing the policy to consumers who thought they were getting "unlimited" data, the company violated the FCC's rules on corporate transparency, FCC Chairman Tom Wheeler said in a statement.

"Consumers deserve to get what they pay for," Wheeler said. "Broadband providers must be upfront and transparent about the services they provide. The FCC will not stand idly by while consumers are deceived by misleading marketing materials and insufficient disclosure."

Many of AT&T's unlimited customers have 4G LTE service, which typically provides mobile Internet speeds of more than 30 megabits per second. That's roughly 60 times faster than the speeds experienced when AT&T throttled subscribers, who were slowed to speeds equivalent to dial-up, according to a senior FCC official.

AT&T just got hit with a $100 million fine after slowing down its 'unlimited' data [Brian Fung/Washington Post]