FTC Sues AT&T for Data Throttling Practices
by Rushil Patel '18
The Federal Trade Commission has filed a lawsuit against AT&T Mobility, LLC, claiming the second-largest cellular provider in the country has deceived millions of its customers by slowing data speeds on “unlimited” plans. According to FTC reports, AT&T has been reducing speeds by as much as 80 to 90 percent on each device after only two gigabytes of data usage. Since the beginning of this “throttling” program in 2011, about 3.5 unique million customers have been affected a total of beyond 25 million times. The FTC is seeking millions of dollars in damages for affected customers.
The announcement of the complaint has sent a ripple through both the general public and Washington D.C. Current customers have lashed out, calling the actions of AT&T “a clear case of bait and switch.” According to John Bergmayer, a senior staff attorney at Public Knowledge, a Washington-based advocacy group, “unlimited is not unlimited when you put limits on it.”However, since bottlenecking data speeds is not an illegal practice, the lawsuit charges that AT&T altered the contractual terms of its unlimited data plans without properly notifying customers that were still under contract. By then continuing to highlight the “unlimited” aspect of the unlimited plans in marketing materials, the FTC claims AT&T misled customers as they renewed their contracts.In reaction to the lawsuit, AT&T has completely defended its policies. Calling the FTC’s case “baseless,” Wayne Watts, general counsel for Dallas-based AT&T, has emphasized that the company has been completely honest about its changes to the unlimited plans. Watts maintains that all customers were notified of the start of the program in 2011 through bill notices and nationwide press releases, while customers today are constantly informed of the speed reductions via text message.Beyond the millions of dollars at stake, the implications of this lawsuit are far-reaching. Although AT&T is being targeted, it is not the only cellular service giant that institutes speed cuts on its data plans. Verizon and T-Mobile have made it clear over the past three years that they throttle speeds in an attempt to control costs and provide service to more customers as wireless airwaves have become saturated across the country. This raises a red flag for the future of the mobile phone industry. As the major cellular providers reach wireless capacity, either prices will rise significantly for unlimited plans or data speed reductions will become ubiquitous. With domestic cellular traffic growing upwards of 300% annually, this future is nearer than it seems. Sources:http://www.ftc.gov/news-events/press-releases/2014/10/ftc-says-att-has-misled-millions-consumers-unlimited-datahttp://www.washingtonpost.com/blogs/the-switch/wp/2014/10/28/the-ftc-is-suing-att-for-throttling-its-unlimited-data-customers/https://bgr.com/2014/10/28/att-ftc-unlimited-data-lawsuit/http://money.cnn.com/2012/02/21/technology/spectrum_crunch/http://www.bloomberg.com/news/2014-10-28/at-t-sued-by-ftc-for-allegedly-lying-about-mobile-speeds.htmlPhoto:
