The FTC Sues AT&T Over ‘Unlimited’ Data Claims

The Federal Trade Commission (FTC) is suing AT&T for having “misled” millions of customers who purchase “unlimited” data plans for their phones, only to have the carrier later drastically reduce the amount of information they could access.

According to the FTC’s complaint, AT&T throttled millions of customers tens of millions of times, sometimes after the consumer had used a mere 2 gigabytes of data in a payment period. The throttling could reach as high as 80 or 90 percent, in terms of speed reduction. In short, AT&T sold unlimited plans, and then whacked the living crap out of them.

AT&T no longer sells unlimited data plans. Users were grandfathered in from the time when the mobile carrier did in fact sell such plans. Even though the plans are no longer generally available, the company is responsible for its contractual promises. The FTC’s Chairwoman Edith Ramirez was blunt:

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

The FTC noted in its release that it worked with the FCC on the matter. The FCC released a statement on the FTC’s action, stating that it has been “actively investigating throttling practices since this summer,” noting that its Chairman, Tom Wheeler, has reached out to carriers concerning throttling. Chairman Wheeler contacted Verizon this summer, for example.

Unlimited plans and how they are managed matter, given that in time, as the cost of mobile data falls, they could come back into vogue. If that happens, precedent will matter: What is actually unlimited and what merely earns the moniker?

This is not a new issue. In 2012, TechCrunch made the following statement, in the wake of new rules from AT&T:

Welcome to the brave new world, everyone. AT&T announced today new guidelines in regards to older so-called unlimited data plans. Subscribers will still be able to keep these plans but they’re essentially limited to AT&T’s new 3GB/5GB data plans.

Let’s be clear: AT&T’s unlimited plans are now officially limited.

Today’s FTC action is welcome, if a bit tardy.

AT&T calls the suit “baffling.”