FTC Goes After AT&T for Unlimited Data ‘Bait and Switch’

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Data throttling is a fairly common practice in the mobile Internet market. Despite the claims of ‘unlimited’ data, most companies provide data at the highest speeds, and then speed is reduced once a certain amount of data is used. A case brought against AT&T by the FTC could change all that.

A press release from the FTC notes that AT&T has been throttling customers since 2011, and this program is very widespread. “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.”

The throttling itself is egregious considering that these plans were supposed to be ‘unlimited,’ which was a big selling point of the plans in the first place. According to the release, members of the public contacted AT&T and referred to the plans as a “bait and switch,” while others sent messages to AT&T containing the definition of ‘unlimited.’

AT&T has responded to press coverage about this suit:

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. This program has affected only about 3% of our customers, and before any customer is affected, they are also notified by text message.

Customers allege that they were never told about this program, which is also part of the FTC’s suit. However, the crux of the issue is the idea of unlimited data.

“AT&T promised its customers ‘unlimited’ data, and in many instances, it has failed to deliver on that promise,” FTC chairwoman Edith Ramirez said via Twitter. “The issue here is simple: ‘unlimited’ means unlimited.”

If AT&T loses in court, it could have wide ranging impacts for the mobile communications industry. Data throttling is a standard part of the business and a roundly despised practice. Data consumption is ever increasing, and punishing high-use customers is cheaper than upgrading infrastructure to meet demand.

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