The Federal Trade Commission has looked at the evidence and, apparently, the dictionary and decided to hold AT&T Mobility to the standard that it should mean what it says when it promises "unlimited data." Imagine that.
In a lawsuit announced this afternoon, the FTC says the second-largest wireless carrier has throttled at least 3.5 million people since it quit offering new "unlimited data" plans - sometimes after they used as little as 2 gigabytes per month, 50 percent less than the carrier claimed in 2012 when it acknowledged cutting some customers' data speeds by an order of magnitude or more. When AT&T quit offering the plans, it allowed renewing customers to keep them - ostensibly under the original terms.
"The issue here is simple: 'unlimited' means unlimited," FTC Chairwoman Edith Ramirez said in announcing the lawsuit. According to the agency's announcement:
The FTC alleges that AT&T, despite its unequivocal promises of unlimited data, 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. According to the complaint, the throttling program has been severe, often resulting in speed reductions of 80 to 90 percent for affected users. Thus far, according to the FTC, AT&T has throttled at least 3.5 million unique customers a total of more than 25 million times.
As evidence of throttling by AT&T and other carriers was accumulating in 2012, AT&T sent me a statement saying that customers with 3G or 4G phones "will see speeds reduced if they use 3GB (gigabytes) of data or more in a billing cycle. Speeds will return to normal at the start of the next billing cycle. For context, less than 5 percent of smartphone customers use more than 3GB per month. For customers with a 4G LTE smartphone – who also still have our unlimited data plan – data speeds will be reduced if usage is 5GB (gigabytes) or more in a billing cycle."
The FTC now says that AT&T ignored even that assurance - which still begged the issue about what "unlimited" means - and suggests it may have been motivated to disguise its practice:
According to the FTC's complaint, consumers in AT&T focus groups strongly objected to the idea of a throttling program and felt "unlimited should mean unlimited." AT&T documents also showed that the company received thousands of complaints about the slow data speeds under the throttling program. Some consumers quoted the definition of the word "unlimited," while others 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. ...
AT&T's marketing materials emphasized the "unlimited" amount of data that would be available to consumers who signed up for its unlimited plans. The complaint alleges that, even as unlimited plan consumers renewed their contracts, the company still failed to inform them of the throttling program. When customers canceled their contracts after being throttled, AT&T charged those customers early termination fees, which typically amount to hundreds of dollars.