AT&T Mobility, LLC has been fined $100 million for allegations that they intentionally slowed down internet speeds for consumers who purchased "unlimited" data plans.
The Federal Communications Commission (FCC) levied the largest fine in its history following an investigation that revealed AT&T customers with unlimited data would experience their internet speed "throttled," or slowed down below advertised speeds, upon reaching an upper-limit of monthly data usage.
Millions of AT&T customers were affected by throttling, according to the FCC.
"The Commission charges AT&T with violating the 2010 Open Internet Transparency Rule by
falsely labeling these plans as "unlimited" and by failing to sufficiently inform customers of the
maximum speed they would receive under the Maximum Bit Rate policy," the FCC said in a statement released Wednesday.
FCC Chairman Tom Wheeler said consumers are entitled to the services they pay for, along with transparency from the provider about their services and procedures.
"The FCC will not stand idly by while consumers are deceived by misleading marketing materials and insufficient disclosure," Wheeler said in the statement.
While AT&T no longer offers unlimited plans for their new customers, many longtime customers have been "grandfathered in" to keep their unlimited plans through AT&T’s process of renewal. AT&T instituted a "Maximum Bit Rate" policy in 2011 to cap data speeds for the unlimited plan members, a process that the company claimed was necessary to reduce the strain on its global network.
AT&T plans to "vigorously dispute" the fine, and said in a statement to reporters that they "have been fully transparent with [their] customers, providing notice in multiple ways and going well beyond the FCC's disclosure requirements."
"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," said AT&T in the statement.
This marks the second time AT&T has been targeted by federal regulators, the Federal Trade Commission sued the mobile company in October of last year for allegedly slowing dial-up speeds for 3.5 million customers.