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AT&T Responds To FTC Throttling Allegations

On Tuesday, the Federal Trade Commission (FTC) filed a complaint in federal court against AT&T (pdf) claiming that the wireless carrier has mislead millions of customers with its unlimited data plans. How? By supposedly reducing their data speeds, aka throttling, to nearly 90 percent in many cases.

According to the complaint, AT&T has failed to inform paying subscribers that when they reach a specific point of data usage in a billing cycle, their data speed will allegedly slow down to the point that users can't even surf on the Web. Even more, if customers jump ship and sign on with a competitor's service because of the throttling, they will be slapped with an early termination fee costing "hundreds" of dollars.

The FTC alleges that AT&T began this throttling program back in 2011 and started reducing the data speed once customers used up 2 GB of data. The FTC also alleges that at least 3.5 million unique customers have been affected by the throttling, and that the throttling has affected customers more than 25 million times.

The FTC said that it obtained documents that showed "thousands" of customers complaining about the unannounced throttling. Some of the customers called it a "bait and switch" while others emphasized and defined the word "unlimited." Many customers also described how the throttling affected simple tasks like checking for email or surfing the Internet.

Overall, AT&T is accused of violating the FTC Act by changing the terms of the unlimited plans while the customers are still under contract. AT&T also allegedly violated the FTC Act by not "adequately disclosing" the reason behind the throttling to customers renewing their contract.

"The Commission files a complaint when it has 'reason to believe' that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court," the FTC said on Tuesday.

Naturally, AT&T had something to say about the allegations:

"The FTC's allegations are baseless and have nothing to do with the substance of our network management program. It's baffling as to why the FTC would choose to take this action against a company that, like all major wireless providers, manages its network resources to provide the best possible service to all customers, and does it in a way that is fully transparent and consistent with the law and our contracts.

“We have been completely transparent with customers since the very beginning. We informed all unlimited data-plan customers via bill notices and a national press release that resulted in nearly 2,000 news stories, well before the program was implemented. In addition, this program has affected only about 3 percent of our customers, and before any customer is affected, they are also notified by text message," the statement continued.

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  • XaveT
    As one of the affected users:

    No, AT&T, you are not transparent. You lie about your transparency as well. What does that say to everyone else? (I know, everyone does it, yadda yadda yadda...)

    They also do not seem to know what the word unlimited means. I would love for the courts to bring this out and say, "No, you cannot redefine common words to mean something else in your contracts. If you mean something else, say it. Otherwise, we will hold you to it."

    I have had some terrible experience with AT&T, so I am certainly biased however.
    Reply
  • punahou1
    They also do not seem to know what the word unlimited means. I would love for the courts to bring this out and say, "No, you cannot redefine common words to mean something else in your contracts. If you mean something else, say it. Otherwise, we will hold you to it.".

    Is not your issue with how they define "speed" as opposed to "unlimited"?
    Reply
  • vertigo_2000
    I'm not up on this whole issue, were they offering "Unlimited Data" or "Unlimited Data at however quickly you can consume it"?

    I like salad, if I go to a buffet offering "Unlimited Salad", I expect to enjoy it at the rate I can consume it. But if I can have all the salad I can eat as they bring it out to me at a rate of 1 serving every hour, then I may not be too happy, but technically, the restaurant hasn't lied to me or misadvertised... I can stay there and eat all the salad I want.
    Reply
  • TeamColeINC
    AT&T is for sure NOT transparent with their customers. Just a couple months ago I had to yell at one of their representatives because they had my grandmother paying $36 a month for 2 Mbps internet through U-verse, after that she got 12 Mbps for $25.
    Reply
  • mr grim
    That's why I love my current provider, they advertised their plan as unmetered and that's exactly what it is, I have true unlimited unlike what my previous provided that cost more and throttled your connection to dial up speeds.
    Reply
  • r0llinlacs
    I've had Boost (which I've heard uses AT&T's network) for almost two years now, and I received a text about 5 or 6 months ago (Not in 2011, as they say) that stated any data usage over 2Gb would result in throttling of my data service (Mind you, on my "unlimited" everything plan). It kind of ticked me off because well, obviously, that's not unlimited anymore, that's a 2Gb data plan. I'm not too mad about it, and I'm not tied to a contract, so I can't complain much about the service terms changing. I never even come close to using 2Gb in a month anyways.

    But... I feel even more sorry for the contracted AT&T users, and this is just one more reason to avoid contracts like the plague.
    Reply
  • maddad
    First of all, they require you to buy a data plan for a smartphone whether you want/need one or not. Then they advertise that their network has 4G LTE speed to get you to buy a device that also has that speed capability. Unlimited data should mean unlimited data at the speed of the device you sold me. If I am on a 30 gig plan it wouldn't be 15 gig at full speed and then we drop you down to dialup speed for the other 15. These companies want to advertise falsely to get people to sign contracts and then complain when people expect to get what they signed up for. I have StraightTalk which uses AT&T's network. They also advertise 4G LTE speed, it works pretty well during the day, but at night sometimes it's less than dialup speed. I only use about 200mb a month of my 3g limit (high speed), my point is they don't deliver what I pay for. Next month I will no longer be a StraightTalk customer!
    Reply
  • Neog2
    Snake I have the big three and I have one of the AT&T old unlimited plans as well as Verizon's old unlimited plan, and Sprints $99 unlimited everything old plan. The terminology in the terms and conditions for each of those plans says nothing about throttling. But in order to keep these plans I have had to not renew my contracts and just buy my phones out right full retail price which isn't big a deal when you consider I get to keep my true unlimited data. At a price point where others are paying considerably more for a limited amount of data.
    (Now all current newer terms in conditions on those carriers include a throttling clause.)


    I own my own businesses and I'm on my phones alot on my Sprint account which has the newest phone Note 3 for the past year I have averaged about 40GB a month. I do have Wi-Fi at home and at my office and I auto connect to those when I'm there but more than not I'm out and about. If I counted wifi data I'm sure together I average 80-90GB a month but my phone only tracks cellular data.

    I have a screen shot if you wish to see.

    I point this out to say that you say you're on your phone on average 18 hours a day which basically means you have your phone in your hand every awake moment. I average my 40GB/month on my note 3 with about 4-5 hrs a day. People use their devices and service differently than the next person.

    Picture:
    https://www.dropbox.com/s/8prza77pp8yl33l/2014-09-19%2014.21.28.png?dl=0
    Reply
  • Neog2
    Snake I have the big three and I have one of the AT&T old unlimited plans as well as Verizon's old unlimited plan, and Sprints $99 unlimited everything old plan. The terminology in the terms and conditions for each of those plans says nothing about throttling. But in order to keep these plans I have had to not renew my contracts and just buy my phones out right full retail price which isn't big a deal when you consider I get to keep my true unlimited data. At a price point where others are paying considerably more for a limited amount of data.
    (Now all current newer terms in conditions on those carriers include a throttling clause.)


    I own my own businesses and I'm on my phones alot on my Sprint account which has the newest phone Note 3 for the past year I have averaged about 40GB a month. I do have Wi-Fi at home and at my office and I auto connect to those when I'm there but more than not I'm out and about. If I counted wifi data I'm sure together I average 80-90GB a month but my phone only tracks cellular data.

    I have a screen shot if you wish to see.

    I point this out to say that you say you're on your phone on average 18 hours a day which basically means you have your phone in your hand every awake moment. I average my 40GB/month on my note 3 with about 4-5 hrs a day. People use their devices and service differently than the next person.

    Picture:
    https://www.dropbox.com/s/8prza77pp8yl33l/2014-09-19%2014.21.28.png?dl=0
    Reply
  • hoofhearted
    We have to treat bandwidth like it is some precious resource the we need to minimize, all to make these monopolistic cellular CEO profits high. So much for innovation in the USA. This country used to be great.
    Reply