The Federal Communications Commission said Wednesday it plans to fine AT&T, the nation’s second-largest wireless carrier, $100 million for misleading customers about “unlimited” data plans. The commission said an investigation revealed that AT&T severely slowed down, or “throttled,” the data speeds for customers with such plans without telling them.
“Consumers deserve to get what they pay for,” FCC Chairman Tom Wheeler said in a statement. “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.”
AT&T said it will “vigorously dispute” the decision. “The FCC has specifically identified this practice as a legitimate and reasonable way to manage network resources for the benefit of all customers and has known for years that all of the major carriers use it,” the company said in a statement. “We have been fully transparent with our customers, providing notice in multiple ways and going well beyond the FCC’s disclosure requirements.”
AT&T introduced a so-called “maximum bitrate policy” in 2011, effectively slowing down the connections of customers with unlimited data plans after they had surpassed a certain amount of data for any given month. This violated the FCC’s existing Net neutrality rules, according to the agency, and made it hard for affected customers to use apps or browse the Web on their phone.
A lot of that usage these days driven by video viewing: 45 percent of all mobile data traffic is now video-related, according to data from Ericsson, which estimated in a recent report that video will make up 60 percent of all mobile data by 2020.
—Reuters contributed to this post, which originally appeared on NBCNews.com.