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Internet Wars, Chapter IV: FCC A New Hope For Consumers

The FCC's rules of the open Internet have been in effect for less than a week, but the FCC wants ISPs to know it isn't playing around. On Friday, the FCC kicked things off by fining Verizon and Sprint a combined total of $158 million for illegal billing practices, and today the FCC launched a fine against AT&T for $100 million over misleading consumers.

The reason for this fine is focused on the inaccurate use of the term "unlimited" when advertising data plans, and for failing to disclose the actual Internet speeds that customers on "unlimited" data plans receive after hitting a specified data threshold.

Under AT&T's unlimited data plans, AT&T applies a policy, known as the Maximum Bit Rate (MBR) policy, to 4G LTE customers after they reach 5 GB of data usage in a billing cycle. This policy is applied to 3G and other 4G customers also, but after hitting 3 GB of data within a billing cycle instead of 5 GB. The FCC stated that the typical bandwidth for 4G LTE service ranges from 5 Mbps to 12 Mbps in most markets, but after hitting the data threshold, AT&T limited customers to a maximum of 512 kbps regardless of network congestion.

Currently, AT&T does not list at what point data is capped, nor does it list what the Internet speed is reduced to after it reaches that point. Thus, customers are tricked into buying what they believe to be an unlimited 4G LTE data plan, but they do not receive unlimited service at 4G LTE speeds. Because this deceives customers and prevents them from making a truly informed decision, the FCC levied the $100 million fine.

The previously mentioned fines the FCC handed to Verizon and Sprint were accepted by the two companies and will be paid, but currently, AT&T has not taken any action and may choose to fight the FCC instead. Regardless of the outcome, everyone who uses the Internet should take joy in the FCC working so hard to enforce the recent Internet legislation and rules of the Open Internet.

ISPs have taken advantage of users in numerous incidents. Whether it's secret charges placed on your bill (as with Verizon and Sprint), or receiving service below what the company advertised (as with AT&T), or having your personal information sold off by your ISP, the FCC's work to protect Internet users means that we are no longer at the mercy of ISPs with unlimited and unquestioned power.

"Today we act on behalf of consumers misled by promise of unlimited data. Consumers should get what they pay for," said FCC Chairman Tom Wheeler on Twitter. "ISPs must be upfront about services they provide. We intend to enforce FCC's Transparency Rule for consumers."

Unless the FCC's latest legislation is repelled in the courts, we should expect to see more fines and more changes that benefit and protect Internet users in the near future. For now, let us sit back and say thanks to the FCC for making the Internet a safer place for us all.

Follow Michael Justin Allen Sexton @LordLao74. Follow us @tomshardware, on Facebook and on Google+.

  • clonazepam
    Wouldn't be surprised if they somehow manipulate the bit rates for video, so no matter what cap you buy, you always come close or exceed it without any real change to viewing habits. Taking off the tin foil hat now.
    Reply
  • alidan
    fine them till it makes more sense to upgrade infrastructure, better yet, build a municipal internet.
    Reply
  • rluker5
    Instead of calling it "fining ISPs" they should call it "taxing consumers" because that is the end result.
    Instead of fines they should pursue criminal prosecution for crimes as that would better deter them, and save the consumer the money of paying these fines in their bills.
    It sounds like the FCC thought some fine print would be a good excuse to take some private money.
    The internet is so much freer now that the gov can arbitrarily harvest money from service providers :P
    Reply
  • alextheblue
    Instead of calling it "fining ISPs" they should call it "taxing consumers" because that is the end result.
    Instead of fines they should pursue criminal prosecution for crimes as that would better deter them, and save the consumer the money of paying these fines in their bills.
    It sounds like the FCC thought some fine print would be a good excuse to take some private money.
    The internet is so much freer now that the gov can arbitrarily harvest money from service providers :P

    Exactly. This is just like the EU fining MS and Google. The government is raking in cash from private companies and pretending to be the good guy. I don't see them sending checks out to the consumers! So where does the money go? Same place all your taxes go... into the bottomless pit of waste and fraud.

    Anyway as you point out, in the end the costs will just get passed along to the consumer one way or another.
    Reply
  • rluker5
    I think they ended unlimited data enrollment in 2012, and let the customers know then.
    http://www.androidcentral.com/3-new-unlimited-says-att-they-officially-change-unlimited-data-plans
    I hope they challenge this for their customer's sake.
    Reply
  • SirTrollsALot
    US Gov on fines "Why make a trillion when we could make... billions?" (Dr. Evil)
    Reply
  • jonathan1683
    I love it they throttled my unlimited plan to .30 KB/s rofl I couldn't load ANYTHING. I called and complained to every manager they would escalate me to. I even use a microcell that using my own wifi because ATT doesn't have service and I live in LA and they still throttled me through my own internet connection. I was so irritated and they told me it was impossible to remove the cap because it was part of the network protocol and no one has access to change it. Very funny guys enjoy your 100 million dollar fine, now it's possible to remove the cap.
    Reply
  • kiniku
    Are you guys as excited as I am looking forward to seeing my ISP bill go down now that the government has taken control! That is so cool!
    Reply
  • anathema_forever
    I hope the FCC throws enough weight around to get this internet frontier of shady corporate behavior gotten rid of. I thinks its incredibly unacceptable that all this shady corporate business practice is considered normal. I honestly would prefer harsher fines get the monopoly buster out and break these corporations up that will bring make them take notice.
    Reply
  • kenjitamura
    I don't see them sending checks out to the consumers! So where does the money go? Same place all your taxes go... into the bottomless pit of waste and fraud.
    Because nobody uses public roads, public libraries, municipal water/garbage/electricity services, or public schools. And nobody uses the internet (formerly ARPAnet) or eats food e.g. milk, meat, grains, fruits, vegetables that has all been greatly subsidized with federal funding.

    The government can do no good, ever, and everything listed above is just superfluous "waste" spending that either doesn't really exist or is not used by anyone ever.

    I find it difficult to believe anyone can trust the government given that it's an ambiguous existence made up of collective robots manufactured who the hell knows where with 0 transparency to the public. It'd make so much more sense if our government was made up of human beings either voted into office or selected by individuals voted into office. It'd also be nice if these "public servants" took part in publishing financial expenditures of the government like with a bill called:
    The Federal Funding Accountability and Transparency Act of 2006 (S. 2590) is an Act of Congress that requires the full disclosure to the public of all entities or organizations receiving federal funds
    that could be tracked on a website called USAspending.gov

    But sadly we don't live in that world. Government is a faceless evil entity that can do no good and does it all with 0 transparency /sigh.
    Reply