AT&T ordered to pay massive fine for slowing down Internet speeds of millions of its customers

AT&T’s decision to slow down the Internet speeds of millions of customers led to it being accused, and ultimately found guilty of misleading its customers. 

The penalty for this sort of offense? $100 million, the largest such fine ever levied by the Federal Communications Commission. 

Now, it should be noted that AT&T did not throttle Internet speeds across the board; rather, performance was affected once customers on unlimited data packages used a certain amount of data each month. 

According to case documents, once this benchmark had been surpassed, the affected customer would no longer be able to do things like stream video or use GPS mapping services.

“Consumers deserve to get what they pay for,” said FCC chairman Tom Wheeler. “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 began offering unlimited data plans in 2007, and while the company has since done away with this option for its new customers, existing subscribers are allowed to renew their contracts for data plans labeled “unlimited”.

This particular case cites AT&T as being in breach of earlier rules adopted in the 2010 Open Internet Order (before the present day “net neutrality” rules). Specifically, a transparency rule that requires broadband companies to publicly disclose sufficient and accurate information about their network management practices. 

AT&T did take a moment to respond to the accusations, stating all major carriers had been slowing data speeds for years, as a means for managing network resources. 

“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,” AT&T said in a statement.  “We have been fully transparent with our customers, providing notice in multiple ways,” the company added, pointing to a notice posted on its website.

Broadband companies are reacting to the implementation of the new net neutrality rules, and Wheeler’s strong desire to see those in violation have to pay for their transgressions. Sprint, the US’s third biggest wireless carrier, states it has ended its practice of slowing data speeds for heavy net users at times when its network is overloaded. 

The company explained that it did not believe it was breaking the new rules, but ended the practice just to be safe. 

“Sprint doesn't expect users to notice any significant difference in their services now that we no longer engage in the process,” a Sprint spokesman said.

Via BBC