In June, the FCC proposed a potentially $100 million fine against AT&T for allegedly failing to disclose to its “unlimited” data plan subscribers the extent to which their data access could be throttled if they used too much of it in any given month. The company recently responded to the allegations, and let’s just say that AT&T isn’t exactly thrilled.
The Commission accused AT&T of violating the so-called Transparency Rule, which requires broadband providers to publicly disclose sufficient and accurate information about their network management practices, performance, and commercial terms of their services.
The FCC’s problem wasn’t necessarily that AT&T was throttling data speeds of certain unlimited users who gobbled up the most data each month. Instead, the Commission contends that AT&T failed to advise these users on the extent to which their data speeds would be slowed if they were in that throttled group. An investigation found that some were having their speeds cut by 80-90%, effectively rendering their plans useless until the throttling ended.
It’s worth noting that while there haven’t yet been any similar enforcement actions, FCC Chair Tom Wheeler has indeed questioned throttling practices at other providers, and that he’s not terribly impressed with the “but other people are doing it” argument.
AT&T says the FCC lacks any authority to issue a cease-and-desist on its use of “unlimited” and contends that forcing to the company to wear a “scarlet letter” and inform its customers that it violated the Transparency Rule would violate the First Amendment.
While the $100 million was bandied around as a definitive figure when the FCC notice was made public, it’s only a vague estimate. AT&T’s response is part of the process of determining the specific financial penalty and any other sanctions, which the company believes it could successfully challenge in a court of law.
Which is a fancy way of saying that this situation is far from being resolved.