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FCC Fines AT&T $100 Million on Data Throttling Charges

FCC Fines AT&T $100 Million on Data Throttling Charges

AT&T Now Under Fire from FCC and FTC for Data Throttling and Mobile Cramming

June 17, 2015

The FCC has proposed a $100 million data throttling fine for AT&T* based on charges that the No. 2 U.S. wireless carrier used deceptive carrier practices against consumers.

More specifically, AT&T is being accused of data throttling, the practice of slowing down data flowing from a mobile network, resulting in slow connection speeds for users.

In 2014, regulators discovered that major U.S. carriers deceived customers through practices like cramming (see Mobile Cramming: What Is It and Who is Affected?) and throttling.

Typically, throttling is used when a network is experiencing heavy traffic; thus the carrier must scale back data speeds to accommodate more connections (see Data Throttling and How It Affects You). However, it appears that certain carriers have been taking advantage of this practice.

In late 2014, the FCC and FTC began coming down hard on carriers in a concerted effort to focus on carrier billing practices going forward, slapping no less than 4 lawsuits on some the largest U.S. carriers (see: Defining Unlimited: US Government Cracks Down on Deceptive Carrier Practices).


About the Fine and Possible Lawsuit

Following this announcement, AT&T has 30 days to respond to the charges, which will then be reviewed by the FCC.

However, AT&T has stated its intentions to “vigorously dispute the FCC’s assertions,” arguing that they’ve been “fully transparent with customers,” and “going well beyond the FCC’s disclosure requirements” by notifying affected customers via bill statements, text messages and other communications.*

In response, the FCC maintains that these efforts aren’t enough – that users weren’t told when speed reductions would take place, what maximum Internet speeds they would receive, and the impact of those slowdowns on video-chat applications such as FaceTime.*

As a result, according to the FCC, AT&T violated transparency requirements of the 2010 Open Internet order, aka the FCC’s net neutrality regulations.

Coincidentally, AT&T (along with several cable and wireless industry groups) is also involved in a lawsuit challenging those net neutrality regulations approved in early 2015 by the FCC (see The FCC Approves Net Neutrality Rules.

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* Selyukh, Alina. AT&T faces potential $100 million U.S. fine over 'throttling' disclosures, Reuters.com. Thomson Reuters.