FCC Wants to Fine AT&T for its Misleading Unlimited Data Plan

Dallas-based AT&T’s limited “unlimited” data plans could cost the company $100 million.

By Luke Quinton and Sebastian VegaJune 18, 2015 3:57 pm| ,

Ever tried to surf the web on your AT&T smartphone, only to see your browser barely loading the pages? Was it the end of the month? If so, you might have been…throttled.

Well, you’re not alone. Turns out, millions of folks across the country were misled by AT&T’s so called “unlimited data plan.” Wednesday, the Federal Communications Commission announced it’s planning to fine Dallas-based AT&T $100 million. Michael Lindenberger writes about business for the Dallas Morning News, and he’s been following this story. Here he answers questions from Texas Standard host David Brown.

What was AT&T thinking, offering up an unlimited data plan?

“The Internet changed, and the way we use our phones changed. So they came up with the unlimited data in 2007…. Think back eight years ago on how you used the Internet, Lindenberger says. “You weren’t streaming video, you weren’t having apps that were on all the time, you weren’t facetiming. And so as that started to change, usage consumption for [AT&T’s] heaviest users went through the roof. Beginning in 2010, three years in, AT&T said, ‘OK that’s enough, we’re not going to offer unlimited anymore to our new customers. But they had all these millions of people that were already signed up, counting on the unlimited data, so they allowed them to be grandfathered in. And so…they stuck with that for about another year, and sometime in 2011, they said, ‘OK…there’s a certain percentage of our users that are streaming so much, we’re going to slow them down.’ You know, I think the rationale for it was pretty clear.”

How did the FCC discover that this was going on?

“They got complaints. According to the FCC, they’ve been getting complaints all the way through the end of last year,” Lindenberger says.

Where is the $100 million fine going, to the FCC or to the consumers who complained?

“It’s not clear to me how they’ll use that money,” Lindenberger says. “One of the things they talked about yesterday at the FCC was if this fine and this action is upheld later, after AT&T has its 30 days to argue with them, they want to require that AT&T lets all of its customers who have these plans opt out without any penalty, and so there’ll be a string of sort of…equitable remedies. What exactly they’ll be we’re not sure.”

Is AT&T going to continue on with this type of data plan?

“I guess the clear distinction here is the FCC has not alleged that throttling is illegal or that it’s behavior that AT&T and its rivals can’t do…they’re basically charging them with simply misleading customers,” Lindenberger says. “Calling it unlimited data, but then imposing these rules, which, in reality for people who use a lot of data, mean that it’s not unlimited data. So they want to change what they call deception. They don’t have the authority.”